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WESCO delivers for the Petrochemical Industry
Procurement
Opportunity: A Texas petrochemical facility’s SAP system generated two automatic purchase requisitions that their WESCO account representatives felt were questionable.
WESCO Solution: Rather than just process the orders, the WESCO Deer Park Branch asked customer personnel whether or not WESCO should fill these orders. Upon investigation, the customer’s electrical department determined that the items were not needed after all. Because WESCO was attentive to the customer and kept track of ordering activity, this facility avoided unnecessary costs of $11,009.64 on one order and $29,477.50 on the other.
Result: $40,487 Total Savings in Unnecessary-Cost Avoidance!
Working
Opportunity: A petrochemical company facility in Texas wanted to save money on its electrical MRO materials inventory.
WESCO Solution: The WESCO Beaumont Branch provides consigned, vendor-managed inventory (VMI) services to the facility on an ongoing basis. Not only does this lower the customer’s inventory-carrying costs, but it also reduces the workload on the customer’s personnel. WESCO employee Billy Waugh delivers, inventories, and stocks the consignment bins on a regular basis to prevent any downtime that might otherwise result from waiting for materials to come in. During just 5 months of having WESCO manage its consigned inventory during 2007, the customer saved a total of $8,900 on inventory-carrying costs, transaction costs, productivity improvements, and freight.
Result: $1,483 Average Monthly Savings in Inventory Reductions, Transaction-Cost Reductions, Productivity Improvements, and Freight!
Working
Opportunity: A petrochemical company facility in Texas wanted to save money on its electrical MRO materials inventory.
WESCO Solution: The WESCO Beaumont Branch provides consigned, vendor-managed inventory services to this facility. WESCO employee Billy Waugh delivers, inventories, and stocks the consignment bins on a regular basis to prevent downtime. As a result of this service, this particular facility saved an average of $5,830 per month over the course of 7 months in inventory reduction, transaction-costs reduction, productivity improvements, and freight.
Working
Opportunity: A petrochemical company wishes to purchase standardized products from preferred manufacturers that have met its specifications and supported pricing over the years.
WESCO Solution: WESCO–Broussard and WESCO/Reily–Metairie have implemented procedures to question orders for products from manufacturers other than those on the customer’s preferred manufacturer list, thereby reducing unnecessary deviation from the standard manufacturers. Standard manufacturer savings from March 16 through December 31, 2007, were $105,905, for an average of $11,147 per month.
Result: $11,147 Average Monthly Savings!
Procurement
Opportunity: A petrochemical refinery in California places hundreds of orders with WESCO each month. With the cost of processing each purchase order and invoice at $125, summary invoicing greatly reduces transaction costs.
WESCO Solution: WESCO’s monthly summary invoicing process allows the refinery to issue one purchase order per project per month. From June through October 2007, summary invoicing reduced the total number of transactions from 2,124 to 551. At $125 each, the 1,573 eliminated transactions represent a total cost savings for the customer of $196,625, or an average monthly savings of $39,325.
Result: $196,625 Savings in 5 Months!
Training
Opportunity: Personnel from a petrochemical company in Louisiana had varying requirements for training.
WESCO Solution: WESCO–Broussard arranged lunch-and-learns — one with GE on motors and the IEEE 41 standard and one with Philips on HID lighting advances. Not only did attendees receive $2,200 in free, onsite training, but the Philips lunch-and-learn resulted in the development of new lighting standards to reduce energy and maintenance costs. WESCO/Reily–Metairie provided $1,750 in free, two-day training on area classification for seven attendees from the the Gulf of Mexico region.
Result: $3,950 in Free Training!
Training
Opportunity: The cost of processing a traditional paper purchase order was $50 each for a petrochemical company in Nigeria.
WESCO Solution: By switching from a manual paper system to WESCO eProcurement, the company reduced the cost of processing a purchase order from $50 to only $5 — a 90% reduction. Over the course of a seven-month period up to and including February 2008, the company placed 154 orders. At a savings of $45 per purchase order, WESCO’s eProcurement services saved this customer a total of $6,930 over seven months, averaging $990 monthly savings in transaction cost reductions.
Result: Average Savings of $990 per Month — 90% Cost Reduction!
Working
Opportunity: A petrochemical refinery in Louisiana had surplus electrical material that had been over-purchased by a contractor for a capital project.
WESCO Solution: At no charge to the customer, WESCO provided the manpower to inventory, package, and return the surplus material to the manufacturers for credit. The customer benefited from the inventory reduction and the material credit, as well as from the labor savings achieved by WESCO personnel relieving the customer’s employees of the need to handle the material return.
Result: $27,775 Inventory Reduction plus $2,400 in Labor Savings!
Maintenance
Opportunity: A petrochemical refinery in Louisiana had equipment unexpectedly go down and needed fuses that weren’t in stock, as well as assistance with a failed transformer in a substation, to resume production.
WESCO Solution: The facility’s WESCO account representative located the required fuses and had them flown in for early morning delivery directly to the plant. In addition, he identified the transformer manufacturer and obtained contact information for the customer to assist in having the failed transformer repaired/replaced.
Result: $50,000 in Productivity Improvements and $150,000 in Reduced Downtime!
Maitenance
Opportunity: A petrochemical refinery in California needed to replace old GE switchgear with obsolete breakers on a motor control center.
WESCO Solution: Rather than replacing the switchgear, WESCO recommended a much more economical retrofit of existing equipment by replacing obsolete GE AK2 breakers with up-to-date Cutler-Hammer Magnum breakers. The retrofit was accomplished without disturbance to the existing transformer throat connection or line-up. The upgrade not only improves switchgear reliability, but also increases personnel safety by eliminating the lanyard draw-out method of breaker disconnection and removal.
Result: $80,000 Cost Savings plus Enhanced Reliability and Safety!
Energy
Opportunity: A petrochemical plant in Louisiana was using 6-watt incandescent lamps with an average life of 1,500 hours. These lamps required replacement every 4 to 8 weeks at a cost of $1.17 material plus $7.50 labor, or $8.67 each.
WESCO Solution: WESCO recommended replacing the old lamps with new 1-watt LED lamps that offer a 100,000-hour average service life. The new lamps cost $13.10 material plus $7.50 labor, or $20.60 per lamp. In 100,000 hours of use, the old lamps would have required 72 replacements, for a total cost of $624. Each of the 36 new lamps supplied by WESCO saves the facility more than $600 in maintenance every 100,000 hours and consumes only one-sixth the energy.
Result: $21,600 Maintenance Savings plus 83% Energy-Use Reduction!
