A large refinery shutdown is always a complex undertaking. One global Canadian energy company postponed its planned 2020 shutdown due to COVID-19, causing the scope of its 2021 shutdown to grow substantially. As a result, the project needed to be as efficient and cost-effective as possible.
There was no room for waste. This meant workers couldn’t spend precious minutes searching for tools or dealing with broken tools. It meant resolving a longstanding problem of significant tool loss. It meant avoiding allocating funds for unnecessary tools and dodging the capital expense of purchasing large numbers of tools.
To meet these challenges, this Fortune 500 company took its long-term relationship with United Rentals to the next level. It contracted United Rentals to provide an on-site managed tool trailer complete with a tool trailer coordinator who would be accountable for providing tools, consumables, and consumption management reporting over the course of the four-month shutdown.
A lean model for a complex project
Planning for the necessary tools was unusually complex because the project involved shutting down eight sections of the plant at different times, with some overlap. In addition, several phases required specialty tools such as custom welding remotes.
“We provided our client a lean model with several proposed drop dates based on their craft curve and peak,” said Candice de Melo, United Rentals regional product development manager. The goal was to furnish not only the right tools but the right number of tools at the right time.
We came in at 87% of that $600,000 budget and found
a win-win for the client,
“It’s typically a very tedious task for clients to deal with the tooling aspects of large projects,” said de Melo. “Yet not having the right working tool at the right time can bring key aspects of your project to a standstill. All those starts and stops add up to big dollar costs that go straight to your bottom line.”
When the tool trailer was dropped, it was fully stocked with the client’s tools, consumables, and a tool specialist to manage it all for the first stage of the project. The assets arrived on site already logged into the United Rental’s tracking system.
United Rentals drew on its previous experience with similar customers, as well as historical data across two decades of continuous improvement, to ensure the client received a rightsized inventory from the start.
Once the tooling was on the jobsite, barcode technology provided visibility into which tools were used, when they were used, and by whom. This allowed United Rentals to add or subtract inventory as needed over the course of the shutdown.
Utilization metrics save money
At the end of each 28-day period, United Rentals provided utilization metrics. If rented items weren’t in use, they were flagged for removal from the trailer to shrink the tool spend.
“Customers may think they need certain tools, but once we give them full visibility and accountability, they often realize they didn’t need as much as they thought they did,” said de Melo.
At the close of large project, companies like this one typically end up with tools that had not been used, and some are shocked at the cost incurred for overfleeting or for tool losses. The tool trailer solved this problem. “They were literally only paying for what they needed,” said de Melo.
The company expected to spend more than $1 million on tools and consumables for the project. United Rentals bid the tool trailer at $600,000, a savings of at least 40% right off the bat. Thanks to the lean model, the final savings were even more substantial.
“We came in at 87% of that $600,000 budget and found a winwin for the client,” said de Melo.
Having the right tool at the right time and in functioning condition generates increased productivity with built-in cost savings. United Rentals guarantees the rental tools will be in working order at all times and stocks the necessary volume at no additional cost to the client in order to deliver on that promise. The barcode tracking system reduces hoarding and helps ensure that every worker has what he or she needs.
The increase in productivity that results from workers having functional tools at their fingertips averages at least 10%, savings from accountability is 25%, and an overall cost savings is 32% when you choose renting instead of owning. The savings from increased productivity equates to $0.25 per man hour and $0.19 per man hour from consumable accountability, which adds up fast.
Freed from the onerous task of procuring and managing tools and consumables, this Canadian energy company was able to focus on the job at hand: performing a successful shutdown.