Project Costing

Project Scope of Work

3. Scope of Work:

This project consist an automated control system replenishing the field tank.
The selected vendor should be a team of trained, experienced and knowledgeable engineers who are always available to provide the needed advice and to be able to assist us in the selection of the correct products and systems that is required for this project.
The scope of work from the selected vendor includes:

* Supply of level measuring instrument
* Supply of wireless equipment
* Supply of surge arrester
* Supply of PC and software
* Services include
o Overall coordination
o Project management
o Site acceptance test
o Project scheduling
* Documentation
* Training
* Maintenance and troubleshooting

Background and Objectives

1. Background:

Our company, ABC Pte Ltd uses petroleum as one of the raw material for our finished products. It is crucial to ensure that we constantly have sufficient amount of petroleum to avoid any potential loss of sales due to shortage. 

There are 8 numbers of tanks which stock petroleum for sale to end-users. These tanks are each measured at 5m in diameter and 8m in height. It is important to ensure that inventory level is maintained at least at 75% of the total capacity. That is, 2 or less number of tanks could be empty at any one time. In order to make sure that our supplies are able to meet the high demands of the end-users at all times, it is our responsibility to work closely with our vendors such that replenishment of petroleum to our empty tanks is promptly taken place.

Inventory checks are done periodically using a conventional method of manual measurement. This involves dipping a gauge into the petroleum tank to estimate the current level of petroleum available in the tank. The measurement data, trends of usage and replenishment with the end-users and vendors respectively are all recorded manually for each tank. These trend records are reported to the Direct of Operations on a monthly basis. This monitoring and reporting method is very labor intensive and manual which lowers the productivity of the staff. There is also the constant issue of measurement inaccuracy.

2. Objectives:

To replace manual measuring of Petroleum in tanks with automated petroleum replenishment system by 15 Dec 2011

Specific

*        To automate the current measuring method of petroleum by installing software operated measuring instrument which will send alert signal to the system once reach the point of replenishment.

*        To automate the PO issuing process to Vendors. PO will be issue by the system and send to designated vendors  when it  received signal from the measuring instrument

Measurable

*        Improvement in accuracy

*        Reduce service technicians

*        No more stock out

Achievable

*        Through suitable and compatible level measuring instrument and software.

Relevant

*        To improve overall efficiency of the work process

*        To improve measurement accuracy

Timely

*        Automated Replenishment System must be ready in one year by 15 Dec 2011

Executive Summary:

The current conventional method of monitoring the level of inventory of the petroleum in the 8 tanks is labor intensive and therefore lowers the productivity and efficiency of the staff. Furthermore, issues of measurement inaccuracy may result in supply shortage or excess. Therefore, the auto-replenishment project is initiated to automate the inventory monitoring activity and to enable triggering for replenishment at the correct quantity and at the correct time. 

The adoption of high technology measuring instruments is intended for level monitoring of all the tanks across the plant. This will enable the provision of a real-time data of the inventory level with much greater accuracy. With wireless enabled equipment installed, the real-time data can be updated into the system. Moving forward, we will also implement e-Kanban system to allow auto-triggering of order to the suppliers whenever inventory level of petroleum reaches the re-order point. This is to help eliminate problems with manual entry errors and can be used to optimize tank levels by better tracking vendor’s replenishment times.

Start of MM6043 project

Drafting the Project Framework