Part 3 (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 covered issues 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.

In Part 3, we will cover operational issues 7-10 dealing with how to handle inaccurate POs; erroneous skill classifications; liabilities; and expired contracts and rates.

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. 

7. Question: What is the impact of inaccurate purchase order (PO) allocation for labor equipment and materials on a project? 

BRUCE: When vendors fill out a timesheet, they get someone with the client to sign it, typically in the field by the supervisor responsible for the work. They're supposed to allocate people on that time sheet to a job number/cost object. There may be 10 or more job numbers/cost objects used on any given day., The correct number of hours which turns into cost needs to be allocated to each specific job number/ cost object. This is important because that is how you build your future projects, by knowing exactly how much you spent on each line item. 

Once the field timesheets are signed by the clients, they are forwarded to the vendor timekeepers for allocation and invoice creation. In most cases, the vendor supervisors are rounding their craftsmen’s hours to their assigned shifts. Often allocations are made to the wrong job numbers/cost objects.  All this activity is performed by the vendor timekeeper with no opportunity for the client’s approvers to ensure the invoices are correct.  

myTrack accounts for the vendors being on-site and applies all the contractual terms. The inaccurate allocation for labor, equipment, and materials happens whenever the vendor timekeeper is doing their allocation in their manual system, which the client never gets to see. With myTrack, you get to ensure that the allocation of labor, equipment, and material is going to the correct job number/cost object in your project. 

8. Question:  How do erroneous skill classifications and non-billables get invoiced? 

BRUCE: Vendors have different skill classifications (such as welders, which may have as many as four different skill levels) to differentiate the skill levels of their craftsmen. The different skill levels get paid at different rates. If you sign the paper timesheet, for example, without myTrack, you’re trusting the timekeeper to note the correct skill level of each employee during allocation. 

The field supervisor knows the number of welders on the job and how much work needs to get done each day but rarely knows the agreed-upon classification levels. The invoicing may not reflect accurately the classification level of the welders on-site and bill all the welders at the highest classification level. 

With myTrack, during the authorization process, the client’s supervisors see the vendor’s skills. Each craftsman is assigned a default skill that can only be changed with client approval. If the skills of the vendors are not what is expected, then the approvers can challenge them in real time prior to authorizing them in myTrack.

9. Question: What happens when the liabilities exceed the PO’s authorized amounts? 

BRUCE: Vendors do the allocations and invoicing, and they know they’re supposed to keep up with PO limits, but often fail to notify the clients with ample time to add additional funds or create new POs. When the PO goes out of funds, the vendor cannot receive payment until a new PO is secured or additional funds are added to the original PO.  

myTrack enables owner companies to be on top of the cost allocations that are taking place and get all the dollars in the correct buckets. myTrack provides visibility to the PO amount and it’s burn rate no longer relying on the vendors. Companies can also add alerts so that when commitments reach a certain percentage, email notifications are sent to key stakeholders. This enables the owner companies to be proactive, rather than waiting for the contractor to tell them how much they've spent on any particular PO. 

myTrack gives control to the owner’s team and lets them know what’s going on in real time. It also eliminates the issue of late invoices because you know exactly where you're at with the PO every day.  

BRUCE: Contracts can change, such as an hourly rate raise, but the information may not be communicated to the people in the field approving time. With myTrack, when procurement changes something to the original terms and conditions and the vendor timekeeper allocates time, they will be flagged for any discrepancy. Once flagged, they can work with the client’s coordinator to update myTrack with the changes. By making the changes in real-time we eliminate audit findings and double work to correct the discrepancies.  

Read Parts 1-2 Now

If you didn't catch our earlier installments, check out Part 1  and Part 2 now to learn more. 

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.