Thinking Outside the Box: Unconventional Supply Chain Planning

Opportune LLP
Contact

Optimizing your energy supply chain requires thinking outside the box to maximize efficiencies and profitability.

When you think of your supply chain, what do you consider? For a traditional downstream refiner, you may include pipeline, truck, rail and vessel logistics. You may think about where inventory is stored. Do you have a picture of how your assets relate to each other? Do you know your daily inventory? Perhaps…does this information provide insight into planning, forecasting and understanding bottlenecks? Is there more you’re missing? If you answered “no” to some or all the questions above, getting a deeper understanding and comprehensive 360-degree view of your entire supply chain is essential and requires thinking outside the box in order to drive operational efficiencies and profitability.

First, take trucks as an example. A traditional supply chain view may just count trucks and racks. For some that’s enough to get the “big picture”. However, do you know the reasons why the throughput is what it is? Dive deeper and determine the speed of the process for metered vs. weighing of the trucks. Examine configurations of the rack, egress points and exits. Determine if there is congestion as a result of traffic patterns. Understand the seasonality of liftings and the different congestion patterns that exist throughout the day.

Second, let’s examine railcars. Here, like trucks, it’s easy to count railcars and then calculate the number of turns in a journey between origin and destination and arrive at an average per month. Go beyond the basics and truly understand the operations. Rail bottlenecks manifest as a result of track configuration. Loop track differs considerably from space-constrained sidings. Depending on products transported and sizes of railcars, they may require different hoses at the racks. Track and measure the speed at which crews turn the railcar from hoses-on to hoses-off, load complete. Gauge traffic within the railyard so that time is not unnecessarily eaten by inefficiencies in coupling cars together. Look beyond just basic constructive placement at the boundary of the yard. Track the macro picture of the journey of the railcar to determine the hand-offs and exchanges between long-haul and short-haul carriers. Learn what optionality your contract has to control the transit time. Sometimes a longer route might actually yield a shorter travel time, especially if you avoid choke points.

For vessels, timing is everything. By nature, more events are tracked in the life cycle of a vessel. However, oftentimes, very few examine the events systematically in order to optimize their supply chain. From the Notice of Readiness (NOR) to the Completion of Discharge (COD), there are events in between to illustrate and highlight bottlenecks.

While a NOR is given and a vessel is ready to dock, the bottleneck might be the availability of specialized tugs for assisting vessels. Do personnel shifts allow and overlap with the busiest traffic times? Once docked, the supply chain extends to the hoses to connect the vessels to onshore tanks. Track and measure the configuration and schedule efficiently. Ensure the shortest path is being taken while balancing the quality of the product in the lines. In other words, balance speed to discharge into tanks or load-out of tanks with accuracy in maintaining purity of product and avoiding accidental contamination of batches in moving products between line segments. Measure and track seasonality and weather patterns and their effect on loading / unloading of vessels. It may surprise you that a weather condition like fog might not be a limiting factor. Instead, the slowness and inefficiency might lurk elsewhere once the vessel is docked and either loading or unloading. Avoid unnecessary demurrage by thinking through the entirety of the discharge / load business process. Don’t get caught unaware in a time delay that runs the demurrage fees skyward.

"While there isn’t a one-stop-shop solution for all companies, a refiner must examine its strengths and weaknesses and determine its competency levels in monitoring its supply chain."

Lastly, the supply chain extends to the tank farm and the tracking of inventory. Determine if tanks utilize gauges or meters. The former is cheaper and more pervasive than the later. However, the level of accuracy of gauges differs from meters. Understand the limitations. Be vigilant for calibration issues, strapping table issues or other technology errors that could prevent a consistency of readings. Set up operations such that you can measure the end-of-day inventory, as well as the flows for up and down gauges. Combine the data to gain a clearer understanding of the true book-to-physical reconciliation.

These questions around specific logistics are important to consider for the full effect of the physical supply chain. While it’s easy to count vehicles, vessels and railcars, it’s often lost to track the ancillary processes for these modes of transportation. Management teams tend to take a simplistic view of per-unit volumes and per-unit costs. They ignore some of the more important aspects of the full business process that contribute to slowdowns and/or bottlenecks. For example, with vessels, while there may be plenty of docks and berths, the hose configuration to reach receiving tanks may be a limiting factor. Additionally, harbor configuration and proximity to busy ports and other shipping lanes may take a toll on throughput. Likewise, railcars can experience bottlenecks in transit when switching between carriers. Are you able to track and monitor the transit?

Levers of Control: Getting Back in the Driver’s Seat

Downstream refiners don’t have to be victims to logistics companies and completely dependent on small morsels of information about their cargos. Solutions to these issues vary from manually tracking transit at critical waypoints and gauging timing based on when those waypoints are passed to full integration with specialized systems. While there isn’t a one-stop-shop solution for all companies, a refiner must examine its strengths and weaknesses and determine its competency levels in monitoring its supply chain. If there are specialized skills, then the company may get away with less integration and specialized systems vs. someone managing in a less technical way.

Another lever of control is the use of price and negotiation of contracts. Contracts can be negotiated in such a way that all parties are incented to optimize the supply chain and not waste valuable time. Understand if you have operational control over the route. Increasing the total distance for a route might be the best option—if it avoids peak rush hours and heavy congestion. Price can also be powerful to adjust behavior. Discount pricing programs throughout the day can drive liftings to off-peak hours. Encouraging jobbers to lift refined products during less busy times will help with ratable draws on the inventory and spur more consistent tracking.

Mechanisms for Course Correction

You can only monitor what you can measure. Therefore, it is paramount to track inventory in enough detail to allow for course-corrections and to allow for understanding the business. It’s not enough to take a simple end-of-day reading on all tanks and delivery points. This doesn’t provide a level of detail as to the activity transpiring throughout the day. Sure, you can determine that from one day to the next—the volume either increased or decreased. However, the critical answer is finding out “why?” How is the inventory movement linked to commercial strategies and modeling? How does commercial activity and pricing drive demand? Is there control? Are some products more elastic than others in demand? Do you have a captive market that is relatively insensitive to pricing changes? Does the demand fluctuate seasonally or throughout the day within specific hours? Are certain modes of transportation used more than others? Does the tracking of inventory allow you to optimize? Is there more than one way to get product to market (assuming you don’t buy delivered and sell FOB)?

The moral of the story is to track the inventory in a meaningful way that colorfully describes the activities at each inventory point, mode of transportation and asset and comparing it against daily physical readings. Oftentimes, these discrepancies will be telling and revealing. Consistent imbalances are systematic of issues with technology and require work orders. Remember, if you cannot measure it, you cannot track and manage the issue.

Don’t Forgot the Human Component

Companies typically stop with assets when it comes to planning and forecasting. However, speed of business can be limited based on the ability of an organization to process the flow of a deal or cargo. Are there enough schedulers to handle the complexity of the movements? Is anyone looking at optimization? Does staffing only allow for the basics of scheduling? What manual/automated solution exists to bring bill of ladings (BOLs) or prices into the organization actuals? Is there a delay in management reporting as a result of inputting data on a consistent basis? Is the back-office overwhelmed with matching and processing AR/AP?

It’s easy to forget the human component and continue to pile on work without consideration for the burden and time delays invoked on groups. Crafting a viable solution that is fit-for-purpose for the organization is paramount. Digital transformation can help, so long as the technology is embedded in with the processes and culture. Don’t introduce technology for the sake of technology without considering if it’s truly helping the situation.

Written by:

Opportune LLP
Contact
more
less

Opportune LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at www.jdsupra.com) (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at privacy@jdsupra.com.

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.