Realizing CAPEX Project Benefits

Challenge: A global specialty chemicals company had made a capital investment of over $50 million dollars to double the capacity of an industrial mining subsidiary in Argentina. The project did not meet deadlines, was over budget and had failed to deliver any increase in throughput.

OUR ANALYSIS FOUND

After a quick scoping, it was determined that a SWAT approach would be best suited to deal with the emergency. A team was put together to quickly address the lack of output from the bottleneck plant. The deliverables included:

Finding and solving technical/chemical process issues limiting the ability of the bottleneck plant to increase throughput

Flagging critical equipment and establishing care/reliability routines and a work management process to improve equipment availability

Finding Root Cause and removing plant feedstock and raw material constraints

Evaluating and making proposal to increase effectiveness and efficiency organizational structure and launch leadership skills development program

Establish an Execution Control System (ECSSM) to drive sustainability and improvement of performance

Implementation

The secret to increasing throughput was to figure out how capacity changes over time. We found that the reactor columns weren’t being fully “emptied” with each cycle, and so subsequent cycles would overfill, spilling product into the waste or recycle streams. Removing more and adding less (more frequently) led to a 25% increase in output worth some $40,000/day.

Failures of critical equipment that limited the input of feedstock to process were minimized

Reliability Centered Maintenance

Stock-outs of key raw materials and fuels were eliminated

Supply Chain Management & Warehouse

Proposed organizational efficiencies that would improve cost by close to 5%

Operations Excellence

CLIENT SUCCESS

Results of our engagement include:

Project was cash flow neutral within the fiscal year of implementation.

A year after completion project was still delivering annualized results of US$9.2 million dollars

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