The Yellow ‘Post It’

The yellow ‘post it’ on the fridge read, “Tariq, Don’t forget to buy Milk”. I felt annoyed with my mother that I had to use creamer again in my
morning coffee. Running out of food in the home is bothersome. However, running out of supplies in manufacturing or large retail outlets can be very costly and may even ruin good, honest reputations.

For me, learning about Inventory Management in class and in further reading prompted questions in my mind about the importance of good Stock Control. I mean, who really pays proper attention to the subject until (like me) they see that supplies have run out and normal production is hampered or even stopped? Well the answer to that is the Inventory manager. Using very sophisticated ‘post it’ systems, his/her job is to ensure that all the parts and pieces are available at any time during normal operations to allow business to keep moving whether in manufacturing, retailing or any operation which involves simple or as in most businesses, very complex supply chains.

In my company SABIC, inventory is key. Lack of critical operational components would result in millions SRs in Gas losses. Recently, I took time to quiz the Inventory Manager about the challenges he faces in keeping good stock. I won’t explain here how the system works; rather I will deal with some of the challenges and I will try to add a few thoughts and solutions of my own.

The primary goal of Inventory Management in my work place is twofold:

  1. To ensure availability of spare parts for process and safety equipment.
  2. To do all this at the minimum purchase cost. (Inventory % costs unknown)

Using a super sophisticated SAP Inventory Management system with all the ‘bells and whistles’ there are still (a) several factors which do affect a planned lead time and there are some (b) special challenges which lie outside the powers of SAP to deal with.

Factors related to Lead Time.

  • The critical nature of spare parts
  • Sources of spare parts, local or outside Saudi Arabia
  • Country of origin and shipping methods
  • Clearing customs and delivery

Since spare parts procurement is subject to a critical ABC Analysis, I suggest three additional changes:

  1. To factor into the ABC analysis a ‘spare parts depreciation table’. Knowing when the most critical process/safety parts need to be replaced in advance their expiry date would generally increase chances of their future availability.
  2.  Stock cheaper, inferior but easily (locally) available substitute spare parts to be used in the absence of preferred products. (i.e. Using creamer instead of milk).
  3. Pay extra money to use procuring agents to source and tender for highly critical spare parts.
  4. Swap, barter and buy spare parts collectively with other SABIC companies to reduce purchase costs and increase even further the chances of spare parts being available.

Special Challenges

  1. Non- Availability of ready-made spare parts for custom specifications. 
  2. Delivery Failures attributed to Suppliers.

For special challenges, my solutions are as follows:

First, use SAP Inventory to source companies that make or can make and deliver reliable custom made parts. Contacts can be had through the
machine/operations (machine needing the parts) manufacturing company or possibly a competitor company using a similar technology.

Second, communicate actively and fully with tardy supply companies to have them understand the critical nature of their products. Begin
with and maintain goodwill. Escalate the relationship with disappointment, distain and even possible punishable future sanctions.


In my work place, replenishment lead time is dogged by delivery delays. Improvements need to be in more precise forecasting and knowing well in advance what the product demands are. Proper analysis of historical SABIC purchase records combined with carefully calculated projected usage and mindfulness of corporate needs would in my view, help our Inventory Manager to acquire and maintain a proper assortment of spare parts while the ordering, the shipping, the handling, and inventory costs can be kept well under control. 

However, before I start advising an industrial giant on inventory, let me begin with a few polite words with my mother about yellow ‘post its’ and how she plans in future to buy milk.



Success Eliminating Total Plant Shutdown








We learned about the Ten Critical Decisions in Operations Management and how businesses apply these decisions for success.

In large industrial manufacturing processes, devices called Analyzers are used to report high level results and system status to the control system at any moment during the process operations. In the petrochemical industry, Analyzers measure, define and report on flow or quantity rates during the petrochemical process.

Many Analyzers are connected to a custom tailored DCS (Distributed Control System) on which all control activities are performed.
This means in effect that controller elements in the manufacturing process are distributed throughout the system in a series of component subsystems, each of which is controlled by one or more controllers. The combined system of controllers is then connected to commuter networks for monitoring and analysis.  Vistanet (computer monitoring network) is one of a number of hardware & software systems used to interface between a number of Analyzers and DCS system.

On July, 2011 during an upgrade of the Vistanet system some of the Analyzer communication reports were lost. This occurred due to faulty processors in the network and a breakdown of the normal input and output communications protocol in the input and output
instruments.   This resulted in a total plant shutdown due to losing the control on the DCS side. Unfortunately, in most cases a breakdown in the DCS system could possibly result in the major slow down in the manufacturing system with other knock on problems and disruptions. On this occasion however, the worse case occurred; that is a total plant shutdown which can cost up to $ 5M per day in losses.

The total possible loses calculate as follows.

Production lost (to flare)………………………………………….,……..….…$ 3.5 M in (24 hrs)

Man-hour to return to commission……………………………,.………….$ 0.450 M

Equipment damage due to emergency plant shutdown….…..……..$ 0.750 M

Penalty payment to local organization due to emission.…………….$ 0.300 M

TOTAL………………………………………………………………..……..…………$ 5.00  M

Immediately after the breakdown,  the production department manager called my manager regarding this problem and my manager assigned me to solve this critical problem by giving me full authority in order to avoid production loses.  This problem was new for me and it had not happened on my watch before, so I faced some difficulties in dealing with it. Add to that the fact that we did not have the correct spare parts available in the company in the warehouse. The pressure was now on.  So I took rapid action. I began by contacting a vendor-supplier in Saudi Arabia to fast deliver to us the replacement materials.  I stressed the urgency of the matter and immediately followed this by preparing a plan and time managed schedule of action in order to try to solve the breakdown problem.

In a series of rapid emergency meetings with my colleagues, (a production supervisor, an engineering specialist, and four on site technicians).  I clarified with them the critical nature of the problem. We discussed my emergency plan and I assigned tasks and jobs according to the rapidly drawn emergency schedule. We worked one long day, found the problems and resolved the communication issues in the production system. The job was completed successfully and safely.

What can be changed to make the critical incident outcome better?

How the ten critical decisions are used in this incident?


Ethics and Social Responsibility

At the drop of a Hat, as I heard the professor describing the ethics and social responsibility part, I thought it’s like a cock and bull story, as I just came to the class from doing the same job, which is to incorporate the essence of Ethics and Social Responsibility in the company’s operation. It was just icing on the cake.

To keep your chin up, it is slightly harder at times when you find that operation managers should be able to produce safe and quality products without hindrance and also have to maintain clean and safe workplace environment. The phenomenon of workplace safety is of utmost importance but still we have this dilemma where we sometimes end up losing our colleagues at work site. To my way of thinking, all companies should try and ensure safety of their folks, therefore in the class discussion came up the idea that, How would DHL be ethical and socially responsible, this idea amplify my inquisitiveness and I turned on to their website where I found really appealing specifics.

DHL considers people and organizations, their stakeholders. DHL believes that “Our image as a company depends on how employees conduct themselves in the business world. There is no substitute for personal integrity and sound judgment”. It is embedded in their corporate values to strive for sustainable development of the business which is founded on the three pillars: economic performance, environmental stewardship and social responsibility.

The most astounding statement which appealed to me was DHL’s principal stance of following global laws where they operate and most significantly in terms of Human aspect which are guided by the principles of the United Nations’ Global Compact. DHL respect human rights within their sphere of influence and conduct the business in a manner that makes the organization, an employer of choice. And most importantly they adhere and respect the principles of the 1998 International Labor Organization’s “Declaration on Fundamental Principles and Rights at Work” in accordance with national law and practice. This is to implement the safety and clean workplace environment, which in return will increase employee confidence at work and then DHL will profoundly be the preferred employer.

By reading the code of conduct DHL in respect of ethical and social responsibility, I wish our company embark on the same principal journey, but do you guys think that:

Are your organizations ethically and socially responsible? Do they honor shareholder commitments at the cost of losing their teammates by not providing clean and safe environment?

The link of the info is here: