The key is to understand the processes that lead to superior performance,
not to arbitrarily cut budgets with the hope that everything will turn out all right.
Ron Moore, Author
Author: Mahen Das
Location: 2.4.1 Medium Sized Semi-Complex Petroleum Refinery
In Chapter 5, we discussed the reasons for the deteriorating business performance of the refinery. In a knee-jerk reaction, the company board simply passed a directive to "cut costs or else" down the line. When the crunch came, a maintenance philosophy was not in place. Cutting costs resulted in slashing the budget willy-nilly. As is often the case, the first victim of such cost cutting is the infrastructure. These assets tend to deteriorate slowly. As a result, neglect is less noticeable and, therefore, less disturbing in infrastructure than elsewhere.
In this chapter, we include the following assets in the term infrastructure:
- • Roads and culverts
- • Ground level and overhead pipe-tracks
- • Structures carrying overhead pipe-tracks
- • Storage tank farms
- • Outside plot pipelines
- • Drainage channels
- • Jetty supporting structures
- • Boundary fences
- • Outside-plot pump houses
The neglect due to cost cutting went on for three years. It would have gone on longer but for an incident which served as a wake-up call. A gasoline line from storage tanks to the loading jetty leaked and many gallons spread over the pipe track before the section could be isolated.
Some sections of ground-level pipe tracks were prone to flooding during rain showers. Also, as the accumulated water flowed away, small amounts of debris and dirt were carried with it and deposited where overgrown grass offered more resistance to the flow. One such point happened to be underneath the gasoline line in question. The accumulation built up and started deposit corrosion on the underside of the line. The leak was detected fairly quickly, but we had to stop loading operations immediately. Only after completing a temporary repair and making the ground around the spillage safe could we use this pipeline. A quick inspection of all pipe tracks revealed several other spots where the same hazard existed. We suffered significant losses due to shipping delays, product loss, and cleaning costs as a result of this incident. Potentially, we faced a serious public relations problem as well, due to high local sensitivity to environmental damage.