that they divide the collective skills required into five designations rather than twelve. Thus, the craftsmen of the contractor are capable of performing a broader set of skills. They, like your client’s craftsmen, don’t perform skills outside of their defined craft but do allow different craft designations to help each other. There are an average of 7 contractor Maintenance Supervisors and 140 contractor Craftsmen at the refinery on any given day.
Question:
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What opportunities exist to increase profits?
What recommendations can you make to capture savings related to the identified opportunities?
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What are the cost savings associated with your recommendations?
Suggested solutions:
The first question involves identifying opportunities to improve profits. The candidate must start with either revenues or costs. Although one could make the argument that maintenance supports revenue by maximizing the operating time of the refinery equipment, maintenance should be seen to be a support function. Thus, it is more appropriate to focus on costs and cost reduction. The following
questions will help the candidate gain insight into cost reduction opportunities.
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How does the maintenance department track its costs? If the candidate phrases the question about material or overhead costs, the interviewer would inform the candidate that detailed reviewed showed no major opportunities. The candidate would be steered toward labor costs and given the following tables regarding maintenance labor costs for the past year. To support understanding of the following tables, Turnaround work is long term preventive maintenance (e.g. complete rebuilding of a boiler) that may be performed once every few years. All other work (short term emergency repairs, small scale preventive maintenance, other routine work, etc.) fits into the category of Daily work
CraftsmDaily en Client Contractor Total
TurnaroTotal und $ 2MM $ 9MM $ 11MM $ 10MM $ 14MM $ 24MM work $ 8MM $ 5MM $ 13MM
SuperviTotal sor Client Contractor Total
Since the Craftsmen table represents a larger dollar amount than the Supervisor table, it is logical to pursue cost savings opportunities in this area first.
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$ 1MM $ 0.5MM $ 1.5MM What is the utilization of Craftsmen in the assets? In central maintenance? And for contractors?
Assume each area is utilized 100% of the time, 50 weeks per year, 40 hours per week.
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How does the labor cost of craftsmen ($24MM) on a refinery-sized basis (i.e., $cost / per barrel of crude oil processed) compare with industry averages?
Consulting your industry data base shows that costs appear to be about 20% above the average of peer refineries. This is an important question to determine if there is a problem with costs (don’t assume there is, the client may be performing better than industry average!)
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Is there any particular reason why turnaround work is so heavily skewed toward contractors?
Turnaround work tends to be more cyclical. An external workforce is used to absorb some of this additional work. Keep in mind that both client and contractor Craftsmen are capable of performing any maintenance job at the plant.
After further analysis of the tables the key fact that should become appear odd is the large difference in the cost per unit of labor between your client’s Craftsmen and the outside contractor’s Craftsmen. Often candidates will ask for the hourly wage rates of these two groups. There is sufficient data to calculate these numbers. The calculation is:
Annual cost of client craftsmen = $10MM/ ( 11 Craftsmen/asset x 9 assets + 100 Craftsmen in
Annual cost of contractor craftsmen = $ 14 MM/ 140 contractor Craftsmen
= $100,000 / year
Again, this difference should provoke a series of questions to understand the difference.
Central maintenance)
= $50,000 / year
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Is there any difference in the work performed by the client and contractor craftsmen?
No, other than the different levels of Turnaround work vs. Daily work performed as noted in the previous table. Both groups are capable of doing any job with roughly equal levels of quality. ?
Is there any difference in efficiency between the two groups of Craftsmen? The candidate would at this point be asked how they would measure this.
After reaching an understanding of the difficulty involved in measuring the efficiency of a workforce (especially a unionized workforce), the candidate would be told that through a series of interviews with maintenance supervisors, there is a consensus that contractor Craftsmen are roughly twice as productive as client craftsmen. This is a critical point in the case. The candidate must recognize that in the present environment the client is largely indifferent about units of labor. You can have a client worker who is half as efficient or a contractor worker who is twice as expensive. The key now is to determine if there are ways to create an opportunity where the client would no longer be indifferent.
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What is causing the inefficiencies associated with the client’s labor? Again, the candidate would be encouraged to offer their own ideas.
2020年(招聘面试)怎样应付案例分析面试(英文版)
