$32B
Annual revenue
Oil & Gas Refinery Optimizes Rail Operations with Lean: Embedding Standard Processes to Enhance Safety, Throughput, and Cost Efficiency
Industry: Oil & Gas, Sustainable Energy
Service: Lean Lab
Service: Manufacturing
Service: Operations Strategy and Transformation
Service: People and Organization
Our Client
A U.S.-based oil and gas conglomerate producing gasoline, diesel, jet fuel, renewable diesel, specialty lubricants, chemicals, and asphalt.
Multi-product
Portfolio including fuels, chemicals, and asphalt
The Challenge
Amid rising asphalt demand and stricter safety regulations, the refinery needed to improve rail operations to ensure reliable delivery, increase throughput, and sustain profitability.
- Regulatory pressure: FRA violations related to hazmat railcar securement.
- Congestion and costs: Railyard congestion and space constraints driving demurrage and storage costs.
- Inefficient operations: Loading and switching inefficiencies restricting throughput.
- Limited visibility: No structured performance management system in place.
- Disjointed planning: Misalignment between switching and load plans with weak daily communication.
- Inconsistent execution: Reliance on external asphalt suppliers due to unreliable performance.
Real Results Achieved Together
The refinery achieved significant operational and financial improvements by embedding lean principles and standardizing work practices across rail operations.
$1.4M
Annual margin impact through additional asphalt shipments
$17M
In capital cost avoidance for new load capacity
$168M
Average increase in asphalt shipments
30%
Reduction in average rail yard car inventory
Transformation Impact
- Enhanced safety and performance management through structured processes.
- Increased rail yard efficiency and throughput capacity.
- Improved communication and coordination with Class 1 rail service provider.
- Sustainable operational discipline supporting future growth and demand.
- 0 railcars purchased externally to meet demand
Our Approach
EFESO collaborated with refinery leadership and front-line teams to establish standardized, lean-based rail operations focused on safety, efficiency, and accountability.
Rail Yard Management
- Developed a yard classification plan and “Terminal Clock” to schedule plant service windows.
- Optimized loading, unloading, and railcar flow while enhancing communication with the Class 1 rail service provider.
Standard Work
- Revamped Standard Operating Procedures (SOPs) and job aids based on field observations.
- Introduced a 5S system at the load rack to strengthen safety, cleanliness, and shift communication.
Performance Management
- Implemented Pulse Boards and daily meetings to track plan adherence and resolve barriers.
Rail Safe Operations
- Created a Rail Operations Manual defining expected safe behaviors.
- Introduced Rail Safety Audits with peer-to-peer accountability to build a proactive safety culture.
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Facing Similar Operational Efficiency Challenges?
- Struggling with rail congestion, demurrage costs, or safety compliance.
- Seeking to standardize operations and strengthen performance management.
- Aiming to improve asset utilization and throughput without additional capital investment.
- Looking to embed lean principles for sustainable operational excellence.
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