Part 2 (of 3): Uncovering the Top 10 Operational Challenges in Heavy Industry
We sat down with Bruce Grissom, a former maintenance manager with over 40 years of maintenance experience at multiple oil and gas refineries, for a closer look at 10 common operational issues that occur in heavy industry.
In Part 1, we examined the first three operational issues--ranging from vagueness in terms and conditions to inaccurate timesheets.
In Part 2, we will cover operational issues 4-6 surrounding the verification of equipment and material charges; mixing up time and material work with lump bids; and the issues of payments being processed without invoice verification.
Whether your role involves turnarounds, outages, or maintenance, you’ll probably find yourself nodding your head at these operational challenges and how myTrack can bring clarity and order.
4. Question: What about a lack of verification for equipment and material charges?
BRUCE: Consider this scenario: you hire a vendor and tell them, "I'm going to let you bring in five pickup trucks, four welding machines, and four air compressors to do this project." They give you a price for each, and you agree. The vendor submits the invoice for the equipment/machinery, but you do not see the invoice or sign for it. There are no controls to ensure the vendor adheres to the agreed-upon payment terms (and quantities).
myTrack empowers the person responsible for the equipment and material to review the allocations and hold the vendor accountable for what was agreed upon. It also allows you to make real-time adjustments to the amount of equipment needed to complete the work. You must no longer rely on the vendors to provide you with a list of equipment for your job.
Another significant advantage is that myTrack applies the lowest cost possible for each piece of equipment based on the contract terms and conditions. It looks at the unique equipment identifier and applies the lowest rate. Even if somebody signed for seven daily rates, but the contract says you are on a weekly rate, it automatically takes it back to the lower weekly rate.
5. Question: How common is it for time and material work to get mixed up with lump sum bids?
BRUCE: Having a contractor do both lump sum and time and material is challenging. They often bill you on the time and material for the person working on your lump sum. So, in essence, you're paying that individual twice, and it's difficult to control that.
myTrack ensures that all vendors on site can only allocate for the number of hours they have earned for that day, “Net Billable Time.” Also, myTrack eliminates a vendor being allocated on multiple cost objects for more total hours than that vendor has earned for the day.
6. Question: What happens when payments are processed without invoice verification?
BRUCE: This is extremely relevant to people with titles such as maintenance manager, turnaround manager, or project manager. They are responsible for budgets and are signing for things all the time. They’re paying the bills but don’t get to see the invoice. The invoice shows up on the company’s software, and it takes a few weeks to settle. When it does, maybe it matches what the manager thinks they spent. It's more common that it doesn't.
When time is approved with myTrack, it creates an authorized timesheet inside of myTrack. Vendors could use the myTrack-authorized timesheet as their invoice if they choose so it's an exact match to what should be invoiced. Managers should require accounting to match the myTrack timesheet with the vendor invoice prior to processing. By following this recommendation, there's never any discrepancy. Invoices are now verified and managers will not be surprised by late invoicing.
Next Up: Part 3 of 3
Stay tuned for Part 3 as we share more of Bruce's expert insights into operational challenges that occur with inaccurate POs, erroneous skill classifications, and expired contracts. You can still catch Part 1 here.
Discover the Power of myTrack
Do any of these operational issues sound familiar? If you work at a manufacturing or industrial site, your valuable contractor spend data may get lost inside a web of data silos and manual systems.
Are you estimating your contractor labor, equipment, and material costs? Or maybe you’re making decisions in the dark with crucial data spread across multiple systems?
By comparison, myTrack can measure, track, and help you make informed decisions about your routine maintenance, shutdowns, turnarounds, outages, and capital projects in one place.
You will also gain real-time insights into your contractor relationships, ensuring compliance, accurate hour and dollar calculations, and seamless integration with your ERP system. Contractors get paid accurately and on time, with labor and hours validated through access control and gated systems.
Get in touch if you’re ready to take the next step. You will streamline back-office processes and support greater overall productivity, job site safety, spend visibility, and build stronger vendor relationships.
