Value enhancement in a dynamic environment—a constraint management expert system for the oil refinery industry

Abstract

This paper analyses a case study of a dynamic expert system which was developed according to the theory of constraints (TOC) approach, and implemented at the Ashdod refinery of Oil Refineries Ltd in Israel, as part of an overall improvement process based on the focused management philosophy. The unique feature of the system is its ability to cope with dynamic bottlenecks typical of the continuous process industry, as well as frequent shifts from an external market constraint to internal capacity constraints. The paper examines the development and implementation stages, describes the expert system along with the new process control, and evaluates its impact. The system creates a dynamic, effective and immediate link between the production planning and the operation control, which enables the oil refinery to maximize its profits. During the first two years of its use, the system generated over $3 million of estimated benefits. Finally, we suggest practical implications to assist organizations in developing and utilizing similar applications, emphasizing knowledge gathering and maintenances, which are the major challenges facing expert systems projects.

Keywords:

• Theory of constraints (TOC)
• Focused management
• Expert system
• Oil refineries

Acknowledgements

The authors wish to thank Ms Revital Peter and Mrs Roni Nethanel for their enlightening comments. The authors would also like to thank an anonymous reviewer for constructive comments and suggestions for improving this paper.