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Workforce optimization to drive down unit costs

October 28, 2024 | Operations

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Downstream oil and gas companies are constantly striving to reduce operating costs and maximize throughput in their refineries. To achieve these goals, workforce planning and optimization has become a critical focus area, not only during peak periods, but throughout regular operations.

Workforce planning in downstream facilities is important for efficient product blending and storage to minimize product loss, and for consistent product quality to meet high customer standards and expectations.

This requires matching employee skills and availability to specific product handling requirements, ensuring adequate staffing for routine operations and during unexpected situations. Optimizing staffing levels not only reduces unit costs but also improves overall efficiency.

Understanding workforce planning and optimization

Matching the skills and availability of your workforce by ensuring the right people are doing the right jobs at the right time is critical. This is where workforce optimization comes in. It focuses on maximizing the efficiency of the current workforce through strategic initiatives and processes.

Workforce planning, on the other hand, involves forecasting the organization’s future workforce requirements to meet its operational needs and business objectives. Essentially, workforce planning matches the supply of labor with the demand for it. A poorly planned or optimized workforce can result in inefficient deployment of staff and allocation of tasks, negatively impacting both operational efficiency and performance.

Common workforce hiccups that impact operational efficiency

Based on Renoir’s 30 years of experience, we have identified the following recurring workforce issues that impact operational performance:

  • Lack of reporting processes to track work quality and facilitate timely follow-up.
  • Lack of tools for effective workforce planning and scheduling.
  • Man-hours are not planned at 100% capacity, resulting in longer maintenance completion times.
  • Mismatch between workforce skills and required competencies that are not addressed.
  • Missing performance metrics to measure workforce effectiveness.
  • Poor and inconsistent cross-functional communication within an organization.

Industry-tested approaches to address workforce challenges

A good starting point for assessing workforce optimization is a qualitative and observational assessment. This assessment provides insight into the current state of operations and the workload constraints that impact performance.

Based on these assessments, organizations can develop and implement consistent processes, effective management planning and control practices, and targeted skills development programs across facilities.

Organizations have unique challenges and operate in different environments, so there is no one-size-fits-all solution to maximizing and properly planning the workforce to ensure overall operational performance. However, here are some industry-tested approaches that Renoir has implemented in a variety of oil and gas organizations:

  1. Optimize workforce planning and task scheduling: Streamline regular operational activities, prioritize critical tasks, and allocate resources effectively to avoid bloated teams.

  2. Invest in workforce development: Upskill and reskill employees to ensure a competent and well-trained workforce for smooth daily operations.

  3. Invest in training programs: Provide targeted training programs to improve the skills and knowledge of different teams according to their functions, such as safety protocols and emergency response.

  4. Implement tools: Develop and use tools to improve scheduling and tracking to ensure that operations can properly identify available resources and fully load personnel with a full day’s work.

  5. Design and install a management control system: Implement a management control system for target calibration and target achievement and use a short interval control mechanism to ensure alignment with daily, weekly and monthly targets.

  6. Conduct a skills assessment: Use a manpower confidence scale or skills flexibility matrix to assign the right task to the right talent, with the right amount of manpower.

More than just headcount

Strategic workforce optimization and planning can significantly improve operational efficiency, performance, and safety. This approach goes beyond increasing headcount to get the job done; it is about strategically deploying the right people with the right skills at the right time.

By addressing common workforce issues and implementing targeted solutions, such as improved scheduling and performance tracking, organizations can eliminate idle time and reduce safety risks.

Is your organization experiencing operational delays and high operating costs due to poor workforce allocation?

US/Canada Oil & Gas Campaign 2024

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