Often when a company adopts new information technology, it faces resistance from employees who will be using the new application. That was hardly the case at the Marquis Missouri Terminal, which ships crude oil to the U.S. Gulf Coast from its location on the Mississippi River.
In fact, it was Marquis’s own planners who demanded a replacement for their manual, spreadsheet-based operation. The reason: a sudden, rapid growth in business.
Marquis had been receiving unit trains of crude oil from North Dakota at the rate of two to three a month. Then it was 10 to 15. Then it was 30 – all in a period of fewer than five months.
High oil prices were driving the surge of activity, says Bart Pieper, director of business and technology integration with Marquis Management. (The family-run company, in business for more than 30 years, consists of several ventures, among them the crude-oil terminal at Hayti, Mo.) According to Pieper, pipelines out of North Dakota were full, and the oil had to get to refineries by train. “There was no other way to get product out.”
The Hayti terminal simply wasn’t equipped to handle that level of business. Its tanks could only hold two trains worth of oil, yet four trains might be departing from North Dakota at the same. Marquis’s Excel spreadsheets couldn’t cope with the many changes in train arrivals, let alone match them with barges coming in to load the crude for shipment down to New Orleans. The result was a series of costly delays. The facility was in danger of being overwhelmed.
Changing on the Fly
Marquis needed a way to make changes on the fly. Clearly, it was time to automate the planning and execution process. The company scrutinized a number of software providers with expertise in either barge or rail transportation. What it really needed, though, was the ability “to manage lots of little pieces of information that flowed through the assets we were monitoring,” says Pieper.
Marquis turned to Quintiq Inc., a vendor of supply-chain, logistics and production-planning software. At the completion of the sales cycle, Peter Shin, Quintiq’s director of North American logistics, was brought in to oversee implementation.
In essence, he says, the challenge involved balancing the inflow and outflow of product and equipment. Marquis was acting as intermediary for the shift from rail to barge, while making sure that the system wasn’t backing up at either end.
Marquis worked with Quintiq to develop a system that would display all activity, give dock personnel access to current schedules, and allow for accurate planning into the next month. But with the sudden influx of trains loaded with crude, all of that had to happen quickly.
So quickly, in fact, that Quintiq had to forego its usual implementation procedure. Typically, it follows a formal proof of concept with a Quality Project Lifecycle (QPLC) process, to determine the best application of the system to the particular customer, as well as any operational constraints. Then it configures the software accordingly.
For Marquis, Quintiq had to apply an abbreviated version of the QPLC. “We had to try to find out the needs of the operational business while implementing simultaneously,” says Shin. “That meant a little more face-to-face time onsite early on.”
Quintiq had a functional system up and running at the site within two to three weeks, says Pieper. Then it spent another three to four months on fine-tuning. “It was a learning process for both of us,” he says. “It was the first time we’ve rolled out this type of system.”
Quintiq was on the premises during the ramp-up, which also involved a “train the trainer” approach, Pieper says. He oversaw more extensive internal training, to familiarize staff with the code and be able to troubleshoot when necessary.
A Welcome Change
There was no resistance from users. On the contrary, “the demand change came from them,” says Pieper. “They said if we wanted to continue moving at this pace, there needed to be something else. I was tasked with identifying a platform that met their needs.”
Shin said Quintiq had to adjust the system to meet Marquis’s operational rules. Its software automatically accounts for scenarios under which railed product is on its way to a terminal that is temporarily lacking the room to accommodate it. Or the facility might be holding an outbound shipment until there’s enough inventory to fill out the barge. But Marquis prefers to do its initial planning of trains and barges without accounting for physical constraints, which are added to the mix later. Only then does the company want to be informed of any demurrage or waiting costs. In the process, Marquis deals with fewer hypothetical delays in scheduling. The Quintiq software had to be tweaked to allow for the practice.
While Pieper hasn’t run the numbers to assess the bottom-line impact of the Quintiq software, he’s convinced that it has improved visibility and saved time needed for planning and execution, while keeping operations at the terminal optimized.
“Instead of doing data entry, planners can analyze information and make decisions,” he says. “They can see costs being accumulated and the cost of making decisions. That’s a considerable benefit.” And while the plunge in oil prices has led to a recent drop in product volumes, the Quintiq application continues to prove its value in helping Marquis to access the relative price of crude in various regions of the country.
Shin says Marquis is able to react far more quickly to new information, as well as conduct a series of “what-if” scenarios to assess the impact of various plans for accepting incoming trains and sequencing outgoing barges.
Pieper says Marquis is talking with Quintiq about extending the functionality to other units, including its ethanol operation. “Most of our other business doesn’t move as quickly as oil,” he says. “There’s a little more time in making decisions.”
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