The complexity of midstream terminal business is emerging as one of the major contributing factors to rises in costs and lost revenue within the Tanks and Terminals Industry. Effective collaboration between the commercial to operations teams is increasing in difficulty as contracts add more requirements and needed flexibility. In addition, orders can get lost in the shuffle as customer service tries to execute more service requests without the ability to capture and manage consistently and reliably.
These challenges drive increased costs for the terminal and the limit the ability to increase revenue.
In a traditional Storage Terminal operation, operators manually:
- Manage & process customer orders
- Transfer customer order to work orders
- Transport order inventory to onsite field operators to complete order execution
Automating and centralizing this process means reducing the time and steps required to fill a workorder for customers. With the right application, you can streamline nominations management ticketing, inventory, invoicing, and eliminate redundancies—all in real time using an intuitive browser interface.
In this episode of our Optimizing Terminal Capacity podcast series, our expert in tank gauging and custody transfer, Thomas Nichley reviews and recommends Emerson’s Synthesis, an expertly designed application software that overtime can eliminate redundancies, minimize vessel turnaround times, while increasing operations efficiency.
Visit the Optimize Terminal Capacity section on Emerson.com for on ways to maximize capacity yield and meet Top Quartile benchmarks through greater volume deployment, inventory turnover and revenue capture.
Also, If you liked this podcast, be sure to check out our other episode with Thomas Nichley on Optimizing Terminal Capacity: Optimizing Terminals Through Improved Scheduling.
Jim: Hi, everyone. This is Jim Cahill with another edition from our Enabling Storage Terminal Capacity podcast series. Today I’m joined again by Thomas Nichley to discuss ways to better control inventory and use data more effectively and efficiently to optimize operations in your terminal. Welcome back, Thomas.
Thomas: Hey, thanks for having me back, Jim.
Jim: It’s great to have you. Well, I know since you introduced yourself in our last podcast for the benefit of new listeners, can you share what part of the Emerson organization you’re with and your role?
Thomas: Yeah. I’m the business development manager here in North America for Emerson Energy Solutions or what we call ESI. And I’m focused primarily on growing the business within midstream third-party liquid terminals with two software products.
Jim: Okay. That’s great. So, let’s begin by for terminal operators, how can automating the orders in planning process help in the context of budget or their workforce?
Thomas: So, being able to preplan develop operational S&OPs allow operators to streamline their operations, whether it is through their workforce or through what I call the customer service management systems, where those guys are usually the ones that are to first touch customer orders, process them, and then place them into a work order that is driven to the field operations or to the control room operators to execute orders, movements, and other items within the terminal.
So, being able to use a centralized system that can not only collect data from customers, manage that information by eliminating a lot of over redundancy I call it and also by adding in finger proofing, it helps reduce a lot of the additional workload that comes in on the front end and helps it manage the life cycle of the order to shorten it at the back end to where it’s easier to process the information and then get the data back to the customer, whether it’s through an invoice, through their inventory information, or even just through their order completion notifications.
Jim: You know, the storage terminals is to me such a fascinating industry because of those complexities involved in moving things in from coming in and storing it and moving it and getting it on through the supply chain in there. So, there’s really a lot of, I think, unique challenges they have. So, how can managing client contract complexities support operations in capturing critical information for client charges on nominations to reduce the cost bleed?
Thomas: That is one of the biggest items that we try to cover or one of the biggest pain points we try to cover in Synthesis for a lot of these terminals. Terminals have gone traditionally from just being service-based storage facilities that move products to now being active pseudo traders and operators that work together. So, we find that before it used to be operations dictated a lot of what happened at terminals, but I think the shoe is now going on the other foot to where commercial is now dictating what happens more and more, and operations just plays to the beat that they kind of give them.
For example, a lot of business development and commercial guys, they develop their contracts based on throughputs, and through services, and ancillary charges, and other items. And all of these are dictated to their customer and they even not only sell the tank or at least the tank space, but sometimes they even lease the pipelines that are connected with those, setting up sometimes prefer pathing or dedicated lines.
And all of those have to be counted for inventory-wise because that plays into, at the end of the day, your charges for your customer. But throughput charges is really where it’s coming in now, because now they’re doing them tiered. They’re doing them based upon a month-to-month basis. And it’s not just, hey, we’re going to charge you for the nitrogen or the steam that you use or the tank space that you’ve taken up or that you did load this vessel or you loaded these trucks and you loaded these trail railcars.
What they’re focusing now is how much product they actually pushed through that for that customer and what those charges should be. So, getting that information compiled and connected into a system that makes sure it tags each of these items that are chargeable is very crucial because operations, they only know what they need to do to get the movement done. They’re not thinking about the commercial side of it, about cost bleed and other items. They’re just going through the motions to make sure that they’re getting the product from A to B and that they’re getting it loaded.
So, if you have that supervisory positioning in a system that can watch that and tag those items that are based upon the order execution from the bill of lading, the services, and the KPIs and the other items that are being triggered and tracked through the system, I think it really helps not only manage your execution of the order, but the cost that goes with it and that the customer is paying for the services that are rendered, the product that is moved, and the contract negotiation that they’ve provided. And a manual system or even an older legacy system are not automated in that sense to capture those workflows.
Jim: Yeah. I can see how this transition is really moving along quickly from really being operations-driven to more market-driven and trying to do that manually and keep up with the changes out there is I think a very difficult hurdle there. So, what do you think is the most important capability of Synthesis for terminals given these rapidly changing and unpredictable markets in which they operate?
Thomas: Well, for the new terminals that seem to be coming into operation, they really derive off of moving product out of the Permian. So, there are going to be a lot of these new crude handling terminals, whether they’re blending crudes or they’re moving crudes, and they’re going to be very marine-based and they are very contractually based in terms of how they go to market and how they’re executing their orders.
So, I think that is a key point for Synthesis to be able to handle these complicated contracts that these business development guys come up with customers to gain business and gain market share for their terminal with multiple customers. On the other side, though, there is the operation-structured terminal, which are some of the terminals that are steeped in tradition and have been around in the market for a long time. And they are focused more on moving the refined products and the chemical products. There, the operational order driving and workflows, I think is very critical.
And when I’m saying that is what you have in a lot of chemical terminals is you have a lot of order that gets their hand held through the process. You know, from the time it becomes an order to the time the truck arrives to the time that it starts getting loaded and then it leaves, there is a lot of steps and a lot of checkpoints, especially in chemicals because you don’t want to mix two chemicals together. There’s a lot of constraints. There’s a lot of presets. There’s a lot of information there that you need to have a checklist for.
So, that’s why Synthesis has developed a mobile app now to be able to help with that field ops, who is making those checkpoints. So, I think that’s the two caveats that you have from operation to commercial. So, we look at those separately and that’s how we try to deal with them as individuals.
Jim: Yeah. I can see that on those two different sides and on the new. For all those existing terminals that are out there, how is that integration made with Synthesis into the way they operate?
Thomas: For existing terminals, I think what we look at is we look at what their current OT/IT structure is. And then we try to find how we can integrate into the SCADA system they’re using. And we also want to integrate into the ERP systems that they’re using and find the best way to leverage the heavy lifting that our system can do for them.
Operationally, it will be helping generate workflows from the customer service management team to the operations team, and that will be based upon whether it’s an automated system or if it is a manual system. And we want trigger points on those or I would say milestones through the operation. And from there, the final side of it will be all the bill of lading, all of the metering tickets, all of the tank tickets, and that information, which we can derive from whatever third-party system they’re using.
That could be from their SCADA. It could be from TankMaster or from another system that is their inventory system. It could be from whatever metering flow computers they’re using or it could be from a system that just gathers that data and provides it to us. And the key there is taking that OT data and deploying it into the business layer to segue into being air traffic controlled by Synthesis to the order information, the customer information, and the contract information.
So, that’s kind of how we try to interface, and we try to pull in all that information that is happening. And it’s really just driving the data to where it needs to go to, to be able to execute an order and also execute the customer transaction and information back to the customer, whether it’s invoicing, as I said earlier, or over execution, or as I said also earlier, the inventory. So, that’s kind of how we look at it.
Jim: Yeah. It just to me seems like you need that information and maybe even reexamine what is the information that is available in the process, and do you need to instrument some more to get it to blend that operational side and business side for, you know, smoother operations? This has been really good. If you had to kind of summarize things about how you’re going to see performance gains in your storage terminal, how would you summarize that for our listeners?
Thomas: I think the best way to summarize it is the ability to streamline the information that goes with the customer order. And by that, I mean, the pertinence of the contract that you have with the customer, the work orders and workflows that go with executing the order for the customer, and then all of the after the fact information that is required for collecting the book inventory, then being able to do the reconciliation for the book, the physical, and then giving all that information or being able to be transparent about that information with your customers, whether it’s through a portal, through a report, or through KPI information that they may inquire about that you can have your customer service managers, email, and track.
So, really it’s just about managing data, streamlining the data, and getting it back to your customers as quickly as possible so they see results and they see that they’re getting the best customer service that they can from their terminal.
Jim: Yeah. It sure sounds to me like if you start down this path and basically transform your operations, then you can move very much from being operations-driven to much more market-driven, more nimble, and overall, it’s going to increase your capacity. So, that sounds like, you know, something that our folks in the storage terminal industry may want to look into more. And speaking of looking into, you know, there’s a terminal capacity section on Emerson.com. But beyond that, what’s the best way for our listeners to reach you and where can they go for more information?
Thomas: The best way to get ahold of me is my LinkedIn profile. I have my email and phone number information there or you can message me anytime. But if you want to get more product information or see what ESI offers, go to www.energy-solutions.com and you will be on the front page of ESI and what we offer, not only for terminals, but also pipeline terminals in pipeline companies as well. So, like I said, we focus in the midstream.
Jim: Well, that gives our listeners place to go for more information. And that’s really great. Well, thank you so much for joining us today, Thomas.
Thomas: Thank you, Jim, for having me and let me have a little conversation about this.
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