Margin Improvement Through Strategic Bold Decision- A Bold Decision

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Margin Improvement Through Strategic Bold Decision- A Bold Decision

The oil and gas industry demands significant financial investments, involving risks, from conceptualization to operations. The success and profitability of companies in this sector depend on key strategic decisions. This case study focuses on a significant margin improvement achieved through a bold decision by the promoter of BiC, an industrial consulting company.
 
Background:
When the BiC promoter Mr. Kishor joined the grassroots company as head power plant and then Become CEO , phase 1 was already decided, and phase 2 awaited his involvement. The company's promoters were known for their openness to accepting challenges and calculated risks. Drawing on his experience in the field of coal-fired boilers, the promoter proposed a groundbreaking idea to supply alternate energy to a large refinery.

Investigation

Recognizing the refinery's substantial steam and power requirements, Mr. Kishor suggested a combination that included a coal-based operation. Coal-based operations offered a cost advantage of approximately 50% compared to other alternatives. Although the idea was initially met with rejection by the refinery's experts, Kishor persisted and approached the Power group with the proposal.

Approach

To convince the Power group, and emphasized the financial benefits, showcasing potential cost savings. His confidence in the idea led to the suggestion of a backup solution through the implementation of a gas turbine. The Power Group, enticed by the potential financial gains and backed by Kishor's recommendation, accepted the idea By Chairman and company promoters.  Kishor was entrusted with the accountability of the entire concept-to-commissioning process, along with the responsibility of overseeing the plant's operations as the head of O & M. kishor took charge as head of the project as well as CEO of the company.

Actions

A meticulous approach was adopted to ensure the success of the project. The following key actions were taken:
  • Selection of a best-in-class configuration and specification in collaboration with experts and consultants.
  • Detailed consideration of coal availability and type, with a focus on selecting a wide range of coal usages.
  • Designing the scope of work (SOW) to prioritize process safety, fire safety, control room layout, and plant layout, adhering to the highest industry standards.
  • Implementation of isolated units, automatic fire detection, and protection systems.

Results

The plant was successfully commissioned, and other costlier plants were discontinued. The notable outcomes were as follows:
  • Immediate daily savings of $0.7 million/ day were realized.
  • Over a span of 10 years, the cumulative net gain amounted to approximately $2 billion.
  • The reliability of the plant achieved best-in-class performance, enhancing operational efficiency.

Conclusion

This case study highlights the significance of breakthrough changes that can be brought about by visionary leaders. conviction, based on his past experience and persistence, played a vital role in gaining management support for the project. Furthermore, the case study underscores the importance of building a strong team to execute and deliver innovative ideas successfully. It encourages leaders not to fear criticism and to consider both sides before making impactful decisions.

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1978 - 1988 Tata Chemicals, Mithapur.
Challenge Instrumentation frequent failure, trappings due to air line failure. Business Impact Profitability. Solutions implemented after RCA and study I took responsibility to set right Entire airline and associated like air filters etc converted to SS316 and atlas copco with MD 6 Dryer to avoid moisture in air line.Outcome No instrument failure thuse, loss preventes.
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21978 - 1988 Tata Chemicals, Mithapur.
Challenge Instrumentation frequent failure, trappings due to air line failure. Business Impact Profitability. Solutions implemented after RCA and study I took responsibility to set right Entire airline and associated like air filters etc converted to SS316 and atlas copco with MD 6 Dryer to avoid moisture in air line.Outcome No instrument failure thuse, loss preventes.
Next
31978 - 1988 Tata Chemicals, Mithapur.
Challenge Instrumentation frequent failure, trappings due to air line failure. Business Impact Profitability. Solutions implemented after RCA and study I took responsibility to set right Entire airline and associated like air filters etc converted to SS316 and atlas copco with MD 6 Dryer to avoid moisture in air line.Outcome No instrument failure thuse, loss preventes.
Next
41978 - 1988 Tata Chemicals, Mithapur.
Challenge Instrumentation frequent failure, trappings due to air line failure. Business Impact Profitability. Solutions implemented after RCA and study I took responsibility to set right Entire airline and associated like air filters etc converted to SS316 and atlas copco with MD 6 Dryer to avoid moisture in air line.Outcome No instrument failure thuse, loss preventes.
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