DataSplice CLEAR: Collecting and Reconciling Contractor Labor and Equipment Costs for Outages and Turnarounds
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At a glance...
Customer
An oil refinery in Kansas, processing around 112,000 barrels per day.
Challenge
Several times a year the refinery shut down its plant for inspection, construction, and maintenance. During such turnarounds, a large force of contractors arrived on the scene to perform the required tasks. This work significantly increased administrative overhead dealing with contractor labor and equipment usage. Increased paperwork required additional temporary staff to capture and reconcile information for accurate cost accounting and management of daily contractor performance. The refinery needed a way to eliminate the paperwork, provide accurate and timely project performance data to managers, and reduce turnaround management costs.
Solution
DataSplice Contractor Labor and Equipment Account Reconciliation Software (CLEAR) allowed the refinery to easily and accurately collect, manage, reconcile, and monitor labor and equipment costs associated with their large temporary workforce of contractors and subcontractors. And they accomplished this without additional staff.
Benefits
- Reduced total project costs – costs associated with temporary accounting staff, their offices and training, and extra software licensing.
- Allowed for quick collection and reconciliation of contractor input that significantly reduced the accounting department’s efforts and costs.
- Integrated accurate cost data with the maintenance management and financial systems for improved project and contractor management
- Ensured that contractors were paid the right amount – on time.
A Problem with Costs, Data and Time
During major scheduled turnarounds or outages, the refinery brings contractors onsite to perform maintenance, construction, and inspection tasks. To handle the accounting duties associated with the turnaround project, the refinery was forced to hire additional temporary accounting staff to help input the labor, equipment, and per diem information.
Accounting then spent considerable time reconciling the input from the contractors with the original purchase order (PO) that defined allowable time and costs. Every contractor’s input had to be checked against the approved personnel, equipment usage, and per diem rates. Any discrepancy had to be resolved so that both accounting and the contractor would know exactly where they were in the project, and what the true accumulated project costs were.
The cost of training additional accounting staff, providing them with office space and software, and paying their salaries for the turnaround, was very expensive. On top of this, the accounting staff found it difficult to complete the review and reconciliation tasks necessary to pay the contractors the correct amounts against their original POs.
The pressure to generate accurate daily reports on project costs and schedules – reports crucial to the engineering department for managing the project – was problematic. Something had to be done!
A Collaborative Solution
The refinery worked with DataSplice Mobile Computing to design and implement the CLEAR product expressly to solve this problem. After a joint analysis of the current process, DataSplice created a software solution that provided electronic entry of labor, equipment, and per diem costs, and automatic reconciliation of the collected information against the originally issued PO.
All data could then be imported into the refinery’s existing Computer Maintenance Management System (CMMS) – in this case MAXIMO® Software, from MRO Software Company.
Today, both the refinery and its contractors use CLEAR in a collaborative process.
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Setup
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Benefits
Now that CLEAR is installed at the refinery and used during an actual turnaround project, the following benefits have been realized:
- All data is now captured in electronic format. In the past, all information was handled manually, with spreadsheets and many manual entries into the CMMS and accounting system. The new electronic process makes all information easier to access and share:
- Quick collection of labor and equipment data.
- Greatly reduced effort to reconcile discrepancies.
- Integrates directly with MAXIMO® and other maintenance management software.
- The system allows daily turnaround of cost data. This gives a more accurate picture of project status and the contractor’s progress relative to project costs and completion expectations. As a result, engineering can better monitor the project and work with the contractors on problems.
- CLEAR eliminates the temporary accounting staff. This means no extra software licenses, training, computers, or office space for the additional temporary accounting staff, saving a total of $50,000!
- Refinery accounting department now has an efficient process. This helps eliminate errors, over and under payments, and conflict with the contractors.
CLEAR doesn’t eliminate the work, but it does provide more auditable cost control, less stressful project management, and accurate, on-time contractor payments.
For additional information, contact Rick Hessdorfer by email at rhessdorfer@datasplice.com or by phone at 1-800-377-1974 x 1083.
