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Comment - Impact Issue 1, 2014
Capital investment projects have several key points where substantial value can be won or lost.
Progress is all about selecting an effective route to our goals. For most businesses, the key is a combination of timely decision making based on solid data and a relentless focus on achieving the best results in every activity. One of the most important aspects is striking a balance between strategic plans and the management of day-to-day operations: the interplay of the large and small decisions that deliver our aspirations.
Christophe Boulanger, Vice President, Strategic Customers
Capital investment projects have several key points where substantial value can be won or lost. The Honeycomb Model developed by Shell Global Solutions illustrates the vital importance of good project definition and execution, and continuous improvement. This article explains why operators making capital investments should put the emphasis on the beginning and the end of their projects.
Many businesses also benefit from openness to new ideas and a determination to consider potential alternatives. The importance of fresh thinking and a willingness to borrow and reapply concepts means that collaboration, often with players in completely different sectors, can be a vital first step in Shell’s success .
Effective and sustainable responses to changing market conditions usually involve a combination of short-term changes to meet immediate commercial objectives and longer-term planning that will reposition the facility for future growth. At LUKOIL’s Ploieşti refinery in Romania, changes selected from a range of options have enabled the refinery to outperform its regional competitors and meet stringent EU biofuel requirements without incurring high capital costs.
For some companies, looking beyond traditional options is what helps them to expand market share and increase profitability, for example, where speciality catalysts and processes can provide a cost-effective option for improving the low-temperature properties of ultra-low-sulphur diesel .
To deliver the right combination of long-term vision and effective short-term tactics, we need a clear understanding of investment risks and opportunities, a positive attitude to the adoption of new technologies and the flexibility to deal with changes in regulatory frameworks and market conditions.