Strength in Partnership brings benefits for Lucite International
A new approach to working with contractors at Lucite International’s Cassel site is attracting attention across the industry as a strategic partnership that can deliver significant efficiency savings and world class SHE performance.
The cultural change has seen the manufacturer reduce its number of suppliers and adopt a much more open relationship with a small number of contractors. Known as the “Concord Alliance”, all have the common aim of working for the overall good of the Cassel site first – and individual company second.
Situated near Billingham, Stockton-on-Tees, chemicals have been manufactured at Cassel site since 1930 and there are now 12 plants on site. With an annual production capability of more than 250kte, five products – all key ingredients in the production of acrylic-based products – are manufactured at Cassel and the site is Lucite International’s largest producer of MMA.
A decade ago, the contracting strategy at Cassel was similar to that of many other chemical manufacturers, with multiple long-term contractors servicing the site at any one time. Each supplier had its own management team, contract style, and approach to work execution, placing a significant administrative and QS burden on those responsible for overseeing processes.
“The site as a whole was not as efficient as it could have been,” explains Caroline Mackenzie, Concord Director and Site Overhauls & Work Execution Manager at Lucite International. “At Cassel, our strategy has always been to invest in growth and drive continuous improvement, but this was difficult to achieve when our contractors had disparate cultural, operational and administrative approaches.”
In 2003, Cassel site’s senior management team carried out a strategic review of its contracting strategy. “World class SHE performance has always been our goal and we looked at the best way to achieve this, whilst delivering a high quality of work and best value for money,” says Caroline.
“We considered a number of ways in which we could make our partnerships with contractors both more efficient and better aligned to help us drive improvement. Taking all the work in-house would cut the administrative burden but this was not an option. We needed to be able to flex our workforce depending on the requirements of the site at any one time, whilst ensuring we had access to the appropriate skills.
“We also needed to be realistic. We wanted to attract the most highly skilled and experienced workforce, yet we knew we could not offer the volumes of work that nearby sites could. Instead, we decided to compete by setting up long-term contracts and creating a culture in which our suppliers would want to work.”
The Concord Alliance saw Lucite International choosing to partner with a handful of carefully selected suppliers, on the understanding that everybody on site would work as an integrated team motivated by what is right for Cassel site and Concord ahead of their individual company.
Three partners now work with Lucite International as part of Concord, each with their own defined areas of work: Hertel (services and top-up mechanical provision), Cordell (mechanical, fabrication and E/I construction) and Parsons Brinkerhoff (independent cost management). The division of work is flexible, however, and tasks are shared out between the partners who draw from their multi-skilled workforces to ensure the best possible team is on the site at any one time.
With each of the partners committing to Concord for at least five years, it is a long-term relationship and a high level of trust exists between the Concord members. This is reflected in the fact that the Concord Alliance Manager, Paul Raper, is a Hertel employee yet is totally independent and manages the full work scope. Hertel has been on site since 2001 providing a range of services including scaffolding, painting, insulation and civils.
“The Concord members all share the belief that being part of the Alliance will ultimately be of greater benefit than being one of a much greater number of suppliers and recognise that they are dependent upon each other,” explains Paul. “The success of the Concord Alliance is a result of the commitment and belief of its members and the continuity of the people on the ground and in the management teams.”
Open and honest working relationships have been at the heart of the Concord Alliance from its inception, with all the contractors previously employed by Lucite International going through a fair – but rigorous – selection and validation process to choose the original members. Looking for aligned cultural values as well as high technical and SHE standards, Lucite International then worked with the chosen suppliers to ratify the existing contracts and complete TUPE transfers, before the Concord Organisation came into operation in 2005.
Since then, AKES – one of the original partners – has undergone a strategic review and asset sale and, consequently, the Concord organisation was restructured to split their work between the remaining partners.
Effective cross company management
At Cassel, there is a major overhaul every three years and around 12 mini overhauls to individual production units each year. Around 8,800 MTCE routines and 3,200 MTCE defects are also completed annually.
In 2008, the decision was made to move major overhauls within Concord’s workscope and no main contractor was appointed. Planning is now well underway for a major overhaul later this year. The number of people working on site will need to quadruple and the Concord partners will work together to recruit the right team for the job, rather than being restricted by company nametags.
The Concord Board is made up of senior directors from each partner and is responsible for setting the strategy and vision for the delivery of Concord, as well as reviewing progress and addressing any issues.
Overseeing all work is the Concord Steering Committee which consists of several members of the Lucite Cassel Senior Management Team, who input into Concord Strategy and interface with other areas of Lucite.
On a day-to-day basis, the Concord Management team is directly responsible for operations and delivering ongoing efficiency improvements. “We work as one team delivering across disciplines and all the members have a good understanding of the resource and skills that are available in the Alliance,” said Paul. “The benefits of this partnership approach are particularly evident when shutdowns are being carried out as the team is able to multi-task, delivering significant efficiency savings. Team and personal objectives are shared and we work together to make changes to achieve best practice across all areas.”
To date, the Concord Alliance has achieved significant savings in fixed costs, with a 40% reduction in management and preliminary costs alone. Crucially, the Concord Alliance has also concentrated and aligned SHE improvements and objectives.
“As a group, Lucite International is delighted with the improved quality of work achieved through working as one team,” concludes Caroline. “We would be happy to roll out similar strategic partnerships elsewhere in the world if the local circumstances were appropriate to allow the shift in culture to be a success.”
Originally published in The Chemical Engineer Dec 2011
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