Ergon Improvement Case Studies: Ergon St. James, Inc., ETI-Memphis, and Lion Oil Company

It takes a confident manager to pursue the new performance improvement (PI) audits offered by Ergon’s System & Performance Improvement Department. These audits “dig deep into details,” as bottom-line assessments that verify an organization’s compliance with the exact steps and sequences of their own operating procedures. These audits typically are requested by managers of organizations with mature management systems who already know all that they are doing right, and who prioritize their operations and invite others to evaluate the continuity between their written documentation and actual execution. PI audits are for managers who use scrutiny to heavily improve their operations.

Distinctions:
Compliance
Ergon’s QMS compliance and surveillance audits seek to determine if each company has established rules that satisfy international ISO 9001:2008 business requirements (conformance) for quality management and if those internal rules are being followed. These audit “nets” are being more widely cast to include ISO 14001 for environmental management systems.

Performance Improvement
These audits seek to determine not only the company’s compliance with and conformance to ISO standards but also the effectiveness and suitability of their rules and controls. This type of audit is sometimes called a “management audit,” “process audit,” “continual improvement audit,” or “value-added assessment.”

Ergon – St. James, Inc.
PI audits identify gaps and risks and can produce a long list of detailed findings, often numbering a hundred or more in first assessments. Most managers might tell you, “The devil’s in those details,” because they tend to be the easiest areas to overlook, especially by experienced, long-tenured employees. Having a neutral party with “fresh eyes” take a close look at an organization’s processes and documentation is a fast way for colleagues to help spot and fix gaps.

“Two or three days with a couple of auditors gives you corroboration and a punch list – a detailed preventive action plan that often catches items that slipped through months of routine document review and edits,” says Shane Rougee, manager of Ergon – St. James, Inc., (ESJ). “It’s a proactive move to find little things before errors arise.” Since PI audits provide itemized findings, decisions and changes can be made in a much more manageable time frame than discoveries made after a problem occurs. Timing counts. After a problem arises, you’ve already paid a cost, wasting three key resources of people, materials, and production time.

“After our audit, it only took one day for three of us to draft, authorize, and submit revisions to more than 60 procedures based on audit results. They were all preventive catches to the system; no down-time or do-overs were involved where products or services were concerned – no errors or disappointed customers,” says Mr. Rougee, who has worked for ESJ almost 19 years. As an experienced QMS auditor for Ergon, Inc., Shane knows the strength of seeing processes through auditors’ eyes to give other facilities a fresh perspective and helping hand.

More and more Ergon companies and departments are utilizing this service. Ergon Terminaling, Inc., sites began using PI audits in 2009 for their bulk storage facilities. Ergon Trucking, Inc., and Ergon Asphalt and Emulsions, Inc., are beginning PI audits in 2010.

Ergon Terminaling, Inc., – Memphis, Tennessee
Ergon Terminaling, Inc.’s (ETI) facility in Memphis, Tennessee, is a strong example of using PI audits to create significant improvement. Heavy use had obscured or worn identification tags from easy recognition of valve numbers and tank lines. Manager Chris Eldridge used a minor nonconformance to reconfigure the identification system to a more sequential order with consistent coding. Over time and growth, the tanks and transfer lines followed an irregular pattern, familiar to long-tenured employees, but confusing to newly hired operators. “It might seem like a small thing” said Chris, “but I saw a risk in how things had evolved. It was a preventive action to use the tag replacement item as an opportunity to overhaul and reconfigure the whole program. We rewrote our processes, had Ergon engineers come in and update our P&ID drawings, started over with the numbering sequence of valves, and created a comprehensive valve alignment drawing.

We eliminated more than 50 pages of work instructions by streamlining procedures like Loading Trucks, Offloading Barges, Railcars, and Transferring Tanks. Instead of a separate procedure for each tank / rack / valve combination, we bundled the proper steps and included the valve alignment attachments for our loading racks, transfer lines, pumps, valves, and storage tanks. My idea was benchmarked from what worked for other facilities, but support from Tom Isonhood and the SPID team made it happen. It would have taken me several years to accomplish this had I been doing it alone. SPID’s involvement is how we’ve been able to accomplish all of this in less than a year.” Chris acknowledges the chain reaction of this overhaul, that they are also reassessing and improving related operations areas like training and safety. “It’s all about communication. This one audit finding started us talking and working more closely together to find better ways to do our work. It’s created a new level of engagement with and among our team,” said Chris.

His employees agree. According to one relatively new operator, who learned his job two years ago, “This new identification system is much easier to follow. It increases my confidence and reduces the risk of error in transferring products among barges, storage tanks, rail cars, and truck trailers. Everything is clearly marked in a way that helps routine operations, especially as we approach peak season.”

Lion Oil Company
Another innovation using internal PI audits was implemented in March at Lion Oil Company in El Dorado, Arkansas (LOC). Refinery manager Paul Fisher’s interest in performance improvement by reducing the specific risk factors for errors resulted in a stronger partnership between management and front-line employees. One area often challenging dynamic workplaces today is reliable reviewing and updating controlled procedures of business operations. The typical “route-review-edit” approach can allow gaps in effectively maintaining accuracy and is often the single greatest nonconformance finding in external audits of business quality management systems.1

Jay Green, Operations Training Manager at LOC, seized the opportunity to improve on training feedback and “traditional document review” by building three multi-management teams. He worked with fellow employee Greg Taylor to adapt and build upon an idea Greg remembered from his role as a trainer in the U.S. Air Force. Three “internal audit teams” are comprised of members from various business segments of LOC, including unit supervisors, process engineers, human resources, and safety officers, who work together each week to interview an employee from each of eight work groups. Their 10-question interviews on key procedures take only 5 – 10 minutes, but allow spot-assessment on the accuracy of steps in an established process while also seeking feedback from the interviewees on how to improve not only the process but also the training related to that process.

The audit team removes employee names from their results before providing data, ratings, and recommendations to upper management on such procedures as Shift Change, Fire Extinguisher Inspections, Emergency Shut-Downs, and Lock-Out / Tag-Out.

With this approach, Jay has found edits to procedures are easily managed by proper authorization, and/or any performance gaps in employee understanding can be clarified immediately in a teaching, coaching atmosphere.

“The result has been impressive,” said Jay Green, “At first it was a little uneasy for employees to have a team of managers interview them for a few minutes, but they soon realized it was questioning
for understanding, not just continuity, to get feedback and ideas on improvement.” Greg Taylor added: “One phrase from Ergon’s quality policy is, ‘We will accomplish our goal through actively involving and training our employees.’ That is a very good description of what we are trying to accomplish here, promoting more interaction, with very constructive results.”

Operations Manager Ken Rudder echoed the praise, “This is proving to be a good program that builds bridges for greater reliability. We can monitor and measure how often these procedures are referenced and the ‘hit rate’ has improved significantly in the last two months. Even though employees had the opportunity to review and edit procedures before, this active communication and feedback has shown management’s commitment to work with employees as our internal experts to improve our business performance.”

The initial performance metrics will be used as a benchmark going forward. “Hopefully, we accomplish two goals: we continually improve the procedures and we accurately educate the employee,” added Greg. “There is a saying we live by in the Operations Training Department, ‘If you think you’re through learning, then you are.”

If you take audit findings and make them relevant to your organization, you will evolve your culture and start seeing achievements improve. The goal is to have your good team become an outstanding one. It is not unusual for employees to report greater engagement with their job after playing such an active part with their management and auditors in identifying gaps and risks. By seeing immediate response, and working to plan and follow-through on findings, everyone learns and takes part in the process, so buy-in becomes automatic. Indeed, everyone wins when work processes are evaluated, streamlined, and improved.

Several Lion Oil employees participate each week in PIPE audits. Recently helping Greg Taylor, Jay Green, and Gary Hill, Area Business Manager, were Paul Bennett, Platformer Unit Operator Assistant #1, Mitchell Chenoweth, Crude Unit Operator Assistant #2, Hudson Williams, Water Plant Operator, and Scotty Rainwater, Operations Pool Operator to assess the effectiveness of communication, training, and documentation on routine vapor checks related to the company’s EnviroSeal procedure.

For more information or to schedule a PI audit for your organization, contact David Cain, Corporate Audit Coordinator for Ergon, Inc., 601-933-3239.

1 BSI study of Top Five Nonconformities, 2009.