Cost control is a particularly important aspect of operational optimization. The two largest costs are feedstock and energy. An exceedingly small feedstock reduction can lead to a very large profit improvement. A feedstock reduction team should be developed to review feedstock utilization.
In 2002 at Titan Petrochemicals in Malaysia, a feedstock reduction team was able to reduce feedstock cost over USD 10.0 million dollars while increasing production. In 2008 at PT Chandra Asri in Indonesia, a feedstock reduction team a was able to reduce feedstock cost USD 10.0 Million and in 2009 feedstock and energy optimization increased plant margin greater than USD 20.0 million, while increasing production rates.
The industry averages three percent energy improvement per year. The top quartile will improve more than three percent. If you are maintaining your energy usage year after year, you are falling behind. OEI can provide senior consultants to review your feedstock and energy utilization. Sometime just the increased focus in feedstock and energy can bring a very large Return on Investment (ROI) from a Process Study.
There is also the timeliness of production. To overproduce and store finished or intermediate products many are not the best use of capital. A supply chain plan can provide cost savings.