The competitive struggle in global olefins is intensifying, exacerbated by the current industry downcycle.
Waves of massive, state-of-the-art plants have been commissioned, and more are on the way.
Top performers continue to push the boundaries of high performance. Energy costs challenge much of the world, while sustainability pressures are increasing for all.
The resulting combination of low utilization and margins has significantly degraded the industry’s financial performance. For some, it is a matter of optimizing profitability; for others, it is a matter of mitigating losses to preserve cash flow until the next upturn.
Solomon’s Worldwide Olefin Plant Performance Analysis (Olefin Study) provides participants with a comprehensive assessment of each of their olefin plants’ competitiveness, including economic gaps for all key performance areas. In this historically difficult environment, how are your olefin facilities measuring up? In what areas do you have improvement opportunities?
The study features many new innovations, including:
- Expanded Energy Analytics insights
- Overall energy data consistency
- Additional insights on turnaround performance and the associated reliability impacts
- G&A personnel reporting by category
- Integration of refinery off gas units
- Fine tuning of pricing model
- Improvements in yield model and more
The upcoming study provides deeper insights into sustainability, energy, yield, reliability and maintenance performance.
The Return on Investment (ROI) for study participants averages 250 times the study cost attained by closing just 10% of identified gaps.
- How reliable are my facilities compared to top-reliability performers?
- How effective is my maintenance program in driving reliability outcomes?
- How does my energy efficiency compare to peer plants and new plants?
- How large is my carbon footprint relative to industry peers?
- How large is my yield gap to competition? How do my feedstocks compare?
- How does my workforce size and productivity compare to industry peers?
- How do my operating expenses compare to others in my region?
- How competitive are my total production costs and net cash margins?
To stay competitive, operators must understand what drives good operating performance, uncover key areas of underperformance in their operations, and identify quick and direct solutions to achieve or maintain their status as a top performer in the olefins industry.
Figure 1 and Figure 2 below are examples of insights you can gain by participating in the study compared to top performers. In this year’s study, we are improving and expanding our energy analytics offering. Figure 1 shows the new waterfall chart that participants will receive in their individual Energy Analytics diagnostics file with an assessment against top energy performers, indicating plant sections with gaps or advantages. Figure 2 shows the relationship between relative maintenance cost and the percentage of plant availability over the years. Compared to top performers, do you know where you are, and do you have a plan on how to get there?
Figure 1. Energy Analytics Gap Chart by System
Figure 2. Example Deliverable – Reliability Journey
As the industry leader in performance benchmarking, Solomon has been delivering mission-critical insight to olefins industry clients for more than 40 years. It is essential to have an objective and detailed understanding of your competitive strengths and weaknesses to formulate prioritized, effective improvement programs that span both tactical “Quick-Wins” and strategic investments.
The study analyzes operating data spanning multiple categories, including asset footprint, capacity and flexibility, feedstock and product mix, conversion performance, energy consumption and costs, operating expenses, maintenance cost, turnaround performance, production losses, staffing, sustainability parameters, and capital expenditures against peers to identify gaps. Participants will receive individual performance rankings for their facilities on a global, regional, and peer group basis using Solomon’s proprietary metrics and indicators. Study results can be used to improve target-setting, to prioritize spending, and to develop action plans to close gaps compared to industry peers.
Solomon has over 40 years of benchmarking experience and the world’s largest database of global performance data in the olefins industry and strong participation in the last study cycles.
Why Participate?
Determine competitive positions using standard industry peer groups
Develop customized peer groups to assess specific performance shortfalls
Formulate expense / margin optimization plans to eliminate shortfalls
Establish performance targets and measure progress using Solomon metrics
Demonstrate performance / capability to joint-venture partners and financial institutions
Study Deliverables
Performance rankings on a global, regional, and peer group basis for all performance areas such as sustainability, energy, yield, and reliability and maintenance performance
Metrics and indicators for all performance areas and all peer groups, including historical trends
An economic gap analysis versus global high-performing peers
Energy Analytics assessment against top energy performers
An on-site presentation and discussion of study results
Performance Is Assessed Across the Following Areas
Energy and Carbon Footprint
Reliability & Maintenance Effectiveness
Personnel Costs
Workforce Productivity
Safety and Process Safety
Other Sustainability Metrics
Yields & Losses
Financial Metrics
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Learn How You Can Participate
Our robust performance benchmarking delivers actionable insights for continuous improvement. The competitive bar is being raised as never before. Are your olefin plants keeping up? Join others that leverage actionable insight in the Olefin Study to solve their most critical issues and improve performance.
A Foundation for Effective Comparative Performance Analysis and Decision Support
We prioritize the integrity and confidentiality of participant-submitted data and rigorously review that data before benchmarking begins. Then, we employ our normalization process and benchmarking methodology to provide valuable and trusted peer group comparisons that deliver meaningful KPIs. Finally, our staff of senior consultants apply their deep industry experience to develop practical insight and recommendations to enable your success.
FREQUENTLY ASKED QUESTIONS (FAQ)
The Olefin Study is a third-party comparative performance analysis that uses proprietary data to provide participants with a comprehensive assessment of competitiveness for each of their plants, including economic gaps for all key performance areas against industry peers. This benchmarking analysis uncovers key areas of underperformance, enabling root-cause analysis to identify appropriate quick and direct solutions to optimize/reduce costs and maximize performance.
Yes, if a plant only closes 10% of the identified gaps from study results, the payout is over 250 times the study fees. Most plants see even greater performance improvement.
The Olefin study analyzes production cost, net cash margin, return on investment, capacity utilization, energy expense, maintenance cost, personnel cost, other operating expense, operational availability, maintenance cost efficiency, annualized turnaround downtime, annualized turnaround cost, reliability & maintenance effectiveness, energy intensity, carbon footprint, environmental emissions, and other performance metrics against peers to identify gaps.
The Olefin Study reviews are an “asset-to-asset” comparison considering the complexity associated to each asset using normalization factors.
Solomon’s key approach for cost normalization is to define relations between cost drivers related to each cost category. Solomon normalization models are developed for each cost category and each peer group. The normalized assessment works to pinpoint performance gaps between the asset and peer group leaders and discover potential cost optimization opportunities in every major category.
Solomon’s Olefin Study can include, on an optional basis, Carbon Insights and greenhouse gases (GHG) Gap Report. The offering is a plant-specific analysis of carbon emission performance, quantifying the impact of more than 10 differentiating factors that drive comparative carbon performance for olefin plants.
The typical study takes about 1 year to complete.
Plant Engineering, Finance, Human Resources, and Asset Management.
Olefin Study results can be leveraged in many ways to improve performance. You can use results to assess competitive strengths and weaknesses, identify actionable performance gaps, establish performance improvement targets, formulate improvement plans and programs, prioritize improvement activities, justify capital investments and staffing plans, measure progress of improvement activities, and demonstrate performance to joint venture partners.
Producers should sustain and even increase focus on continuous improvement and competitive performance benchmarking during an olefins business downcycle. Solomon has ample evidence, underpinned by over 40 years of objective performance data. Read the 10 reasons why to continue to benchmark below.
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