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Products and solutions, 2006-11-07, 05:11 PM

Cost-lowering optimization strategy

Since this year, ThyssenKrupp Xervon is in charge of store management at all parts depots of the Bayernoil refinery. Altogether five suppliers had submitted to the Bavarian refinery their materials management and store operating proposals. Xervon won the contract.

Along the Danube, Bayernoil operates three refineries in Ingolstadt, Vohburg and Neustadt which together process almost 12 million tonnes of crude oil annually. Each location has its own store accommodating consumables and spare parts amounting to around 42,000 items, a total volume that Xervon intends to first standardize and then shrink in the medium term.

The optimization strategy worked out by Xervon impressed Bayernoil as it promises to boost the efficiency of parts inventory and materials management. These measures with short- and medium-term implications will cut handling costs, current assets, and inventory. At the same time the company aims at accelerating inventory turnover and optimizing workflows. An important factor: for around four decades now, ThyssenKrupp Xervon has been working as an industrial services provider in the areas of maintenance and project processing for the Bayernoil locations and is thus highly familiar with local mechanisms and processes.

Reducing inventory is one of the main targets in optimizing store operations. Bayernoil was formed in the early seventies from three independent refineries which merged into one company not until the eighties and nineties. For historical reasons, all three refineries had differing specifications, regulations and standards. A process of simplification and standardization offers plenty of savings potential.

20 percent less inventory

Since the start of June this year, a team of technicians and logistics experts has been looking into parts standardization. The team carries out inspections and submits proposals as to what is to be standardized, scraped or shifted. The standardization process is scheduled to last altogether two years. Thereafter, the inventory (value-wise) will be reduced by around 20 percent.
Another cost-saving approach is the use of intelligent supply and delivery procedures such as just-in-time deliveries, e-procurement and demand pooling. Additional measures will follow the standardization process and help in further reducing inventory.

Long term, the concept worked out for the Bayernoil locations aims at storing the fast-moving parts locally. Slow-moving parts will be warehoused centrally - this also involving the formation of a central warehouse. An important benchmark is the improvement measures already successfully carried out in the parts store at Münchsmünster. Geographically, the Münchsmünster industrial park lies in the center of Bayernoil´s refineries where ThyssenKrupp Xervon has been operating a materials depot for the industrial park since the takeover of the Münchsmünster location and where it carries out all maintenance services.

For almost 40 years now, ThyssenKrupp Xervon has been operating as an industrial services provider at the three Bayernoil locations. The spectrum of services is wide: maintenance and project work in the areas of plant, machinery, welding, and instrumentation. Among the company´s capabilities are also various auxiliary services and corrosion protection. Moreover, Xervon provides tank farm, shutdown, piping, and instrumentation maintenance and project planning services.

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