W13_OAN_Pareto Priority Index

  1. Problem Definition

In this week Blog Posting, Author will analyze alternative method of tank repair. As we now, Storage tank is our critical facilities.  As Oil and Gas price now struggling, company has cost reduction campaign. Define the alternatives for project cost reduction and specify the priority of project that will be execute. Therefore, we must find the best alternative method to maintain reliability of our storage tank, especially old storage tank.

  1. Development of Feasible Alternatives

Feasible alternative project to maintain old storage tanks are:

Glass Fiber Reinforced Polymer (GFRP) Lining

Re-bottoming include cathodic protection

Plate doubling include cathodic protection

3.Possible Solution

Generate estimate cost, estimate saving and probability of success.

Estimate Saving based on fuel throughput per day, compare to construction for new tank (12 months project duration) and operation live of new tank (20 years).

  1. Glass Fiber Reinforced Polymer (GFRP) Lining (90 days project Duration – 5 years life time)
  • Total Cost                             : Rp. 400 Million
    Tank Cleaning
    Sand Blasting
    Fiber Reinforced
    Lining
  • Estimate Saving : Rp. Rp. 27 Billion
    Project duration
    Operation live

2. Re-bottoming include cathodic protection (180 days project duration – 5 years life time)

  • Total Cost : Rp. 1 Billion
    Tank Cleaning
    Repair all bottom plate
    Sand Blasting
    Cathodic Protection
  • Estimate Saving : Rp. 18 Billion
    Project duration
    Operation live

3. Plate Doubling include cathodic protection (135 days project duration – 2 years life time)

  • Total Cost : Rp. 300 Million
    Tank Cleaning
    Bottom plate assessment
    Plate doubling
    Sand Blasting
    Cathodic Protection
  • Estimate Saving : 16 Billion
    Project duration
    Operation live

Calculate Pareto Priority Index (PPI), Equation that will be use is as follow

Table 1: PPI Calculation Result

  1. Selection Criteria

Cost reducing project that have biggest PPI will be selected

  1. Analysis and Comparison of the Alternatives

Glass Fiber Reinforced Polymer (GFRP) Lining project has the biggest PPI value among other, according table 2 the project ranking as follow:

Table 2: Project Priority

  1. Selection and Preferred Alternatives

Based on above analysis, Glass Fiber Reinforced Polymer (GFRP) Lining project is selected due to has biggest PPI (216)

  1. Performance Monitoring and the Post Evaluation of Result

To select project more accurately, if it is available historical information can be use to estimate standard times and resources. Whenever update data is available, calculation should be re-run to validate selection.

Refrences

  1. Six sigma daily (2014). The Six Sigma Approach to Project Selection. Retrieved from: http://www.sixsigmadaily.com/implementation/the-six-sigma-approach-to-project-selection
  2. Selecting Projects where Six-Sigma can add value (2014). Retrieved from: http://unpan1.un.org/intradoc/groups/public/documents/arado/unpan020936.pdf
  3. W13_AL_Pareto Priority Index
    Retrieved from https://kristalaace2014.wordpress.com/2014/05/21/w13_al_pareto-priority-index/

 

 

1 thought on “W13_OAN_Pareto Priority Index”

  1. AWESOME posting Pak Nunug!! Very real case study and your analysis followed our 7 step process just about perfectly….

    Just keep on doing what you are doing and you will be in great shape for your AACE/GPC certifications at the end of 25 weeks.

    BR,
    Dr. PDG, back home in Jakarta

     

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