Site management today - making complexity more flexible

The narrative of the present time is a complex world that needs new methods to be mastered. Operating a chemical site, especially a large multi-user site, is one of the most complex organizational structures: here the complexity of historically grown site structures meets the need for local companies to adapt to the VUCA world of their business environment. This makes any change in site management a non-trivial task.

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Complexity

What makes the operation of a chemical site so complex? From our many years of experience in the development and optimization of small and large sites, we can derive four key drivers of complexity.

Natural monopolies

Chemical parks contain real natural monopolies. They are largely dependent on assets such as networks and infrastructure operations. One driver of complexity is the wide variety of established solutions for managing these natural monopolies: company law structures with various shareholders, separation of ownership from operator tasks, contractual control functions such as compulsory services or open books structures. The privatisation of public monopolies has brought further solutions (e.g. network operators and transmission rights) but also further regulatory requirements (e.g. consortium solutions with a view to the EEG). Finally, further development of the control mechanisms over the last two decades has increased the complexity of the solutions.

De facto monopolies

Natural monopolies have always been mixed with de facto monopolies. Most of the services provided by the site operations are only available on paper. Infrastructure services and production-related services (such as technical, logistical or analytical services) with the appropriate experience, quality and quantity are not marketable at most chemical sites because they are not available from more than one equivalent provider. In this respect, long-term, highly complex and change-resistant customer-supplier relationships have developed here - often not even explicitly controlled. On the other hand, highly competitive submarkets (e.g. in high-quality but standardized technical services) are emerging in peripheral markets in which the established site operator often does not have the best chances – for real and psychological reasons.

Investments

Investments causes the third dimension of complexity. Infrastructure investments follow a different logic than those in chemical plants. Whenever scarce investment funds are negotiated, infrastructure investments are left behind for simple strategic reasons. The bypass mechanisms established in order to maintain a sustainably invested infrastructure (e.g. different ways of financing through pricing) are manifold, but not trivial in their application.

Physics

However, all the complex regulatory and control capabilities required to unravel interests can never eliminate one of the physical or factual framework conditions of a chemical site. Production is located on site, at a specific location, in a specific environment and, above all, with defined neighboring productions. Noise immission and safety issues, for example, are still problems that cannot be solved at company level. Facilitating or enforcing the collective solution remains a monopoly of the site operator in cases in which the state does not exercise this constraint under licensing law.

Flexibilization

What does this mean for site operation today? Reduction of complexity and the attempt to find the "best solution" is necessarily doomed to failure. The structure of each individual chemical site is too differentiated and too adapted to the respective initial conditions and framework conditions. Thus, the answer for the site operator how to make his site fit for the increasingly complex environment does not lie in the "intelligent concept". Rather, it lies in making the current situation more flexible with a view to new challenges, requirements and opportunities. The steps in this direction are

  1. a systematic conceptual scrutiny of the current situation,
  2. negotiating a target image that is sufficiently flexible to meet the requirements of the parties and the uncertainty of the future, and
  3. the creation of an overarching change, which includes participating companies, acting persons and concrete contractual relationships, and which stabilizes the desired flexibility.

Site operation is change management. We should discuss this.

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