How to prevent fuel loss.

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Information about How to prevent fuel loss.

Published on June 8, 2016

Author: MichaelLitvinovsky


1. How The Diesel Rivers Were Stopped? Experience of implementation transport monitoring system “Delta” at mining and metallurgical enterprise PJSC “ArcelorMittal Kryvyi Rih”. Senior executive’s point of view. 1 Diagnose Typical steel & mining Ukrainian company occupies almost the same area as famous city Paris. The length of internal railway tracks is about 1000 km. For production of 30 tons of finished product it is necessary to move 100 tons of raw materials. There are 200 locomotives, 45 heavy dump trucks and about 150 big lorries and mechanisms work every day and use diesel fuel in their engines. Monthly fuel consumption is about $4 million. Audit of independent company estimates non-productive fuel loss at the level of 30%. Typical schemes of embezzlement could be divided on types: 1. Fuel drain from vehicles to hidden pipes, which has extension outside the 2. Fuel drain from vehicles to thief’s vehicles. 3. Fuel drain to oilcans with further storage and movement. 4. Underfill of a fuel to consumer from a fuel-servicing truck. Embezzlement of a fuel is well-established business-process, which involves affluent people. Therefore, it is impossible to stop embezzlement only by physical security. Root causes: - procedure of fuel wright of either by size-stick check or by engine hours or kilometers allows to create fuel excesses; - human factor during creation of accounting records without daily balance of fuel; - substantial proportion of losses because of ineffective operating modes. If you don’t know how much you have to have, you won’t know how much you lost. 2 What was the doctor prescription? 1. In the chain of fuel movement from warehouse to final consumer the accent of main decision was made on the control of final consumer. If we can answer the question: “How much fuel did consumer receive and how much

2. fuel did he really spend?”, we will have opportunity to control other part of chain by regular inventory. 2. Fuel consumption control of final customer requires online control of such parameters as: a) location; b) work in progress; c) volume of fuel; d) weight of cargo (for open pit dump trucks); e) online comparison volume of fuel filled from a fuel-servicing truck into vehicle’s fuel tank; 3 Technical Implementation Transport monitoring system developed by “Dneprotechtrans” was implemented on the enterprise. Task of fuel consumption control was extended to task of vehicle monitoring including online monitoring and analysis of such parameters as: 1. location; 2. speed; 3. capacity of power equipment; 4. moto hours; 5. onboard voltage; 6. weight of cargo; 7. entrance control of special areas; 8. quantity of a fuel in a tank; Parameters are transmitted online to processing system through GSM. Processing system analyses and outputs information about exception conditions. For example, discrepancy of fuel consumption by vehicle and from tank, lost of connection with an The main basis of fuel consumption control is continuous comparison of fuel, which is necessary for working of engine and fuel, which was taken from the tank.

3. object etc. Objects and their parameters are displayed at geo information system. Inventory count of fuel on an object is carried out every day with automatic transfer to SAP without human input. Users of the system: 1. Plant Dispatchers - control the actual delivery of goods; 2. Managers / managers of transport and production divisions - operational management of production; 3. Analysts of efficiency usage - control of operating modes; 4. Security Service - for prevention theft; 5. Labor Safety Department – overspeed control, distribution of accidents; 6. Financial Services - accounting of fuel. Problems of Technical Implementation: Curious to relate, but main volume of work appeared during perform of attendant tasks linked with bringing monitoring objects into passport technical condition. For example, cleaning of tanks, repair of suspension of lorries, rehabilitation of different parts of vehicles. Furthermore, very important task was to organize qualitative GSM cover by dint of PJSC “Kyivstar”. Р 1. Screen of railway manager Р 2. Online analysis locomotive performance Speed, Capacity, Fuel

4. 4 Struggle for Survival Installation of the monitoring system inspired great resistance, because it radically changed the situation and for many it was a question of physical survival. Challenge #1: Despite of vandal-resistant almost 65 per sent onboard systems were destroyed by stun guns, pumping corrosive liquids, destroying of communication systems, thermal burn of equipment etc. Challenge response: Elements of onboard systems were taken into account as components of a vehicle with liability of the operator and transferring of responsibility to the next shift. In the case of termination of the onboard system object immediately stopped for ascertain the circumstances. Upon detection of the deliberate withdrawal fact with onboard equipment disciplinary warning applied to the responsible person. Challenge #2: Discrimination of the system by medium-level managers. Challenge response: Register of all complaints and their meticulous processing with further feedback. Advertising departments and managers who use the system effectively. Challenge #3: Increased pressure on security service. A big quantity of unconfirmed fuel draining and, therefore, ineffective departures of alarm response force. In order to drain a ton of fuel from locomotive enough only five minutes. Dispatching of alarm response force requires from 10 to 15 minutes. Increasing of fuel draining accuracy (for example to 10 liters) brings increasing of false signals. Challenge response: Accent was moved from alarm response force to analytic work. Analysis of fuel draining places and time, statistics of exceptional conditions at force. Challenge #4: Degradation of the system. As with any system, the monitoring system could be failed during the operation and as a result of the different interventions. Challenge response: It is necessary to provide sufficient resources to maintain the system in working condition. Opponents must get a clear signal that operation of an object without working monitoring system is impossible. Challenge #5: Attempts of opponent’s influence on staff.

5. Challenge response: Segregation of authorities between analyst’s technical operation, alarm response force and accounting functions, as well as the existence of clear regulations making such efforts meaningless. 5 Results Due to the prevention of embezzlement and control of operating modes, confirmed fuel saving was 15%. Payback period of project was 6 months. Decreased accident rate by controlling the mode of objects operation. Diesel prices in the city rose by 10%. Key success factors: 1. sponsorship of the first person of the company; 2. functionality used by many services that carried out mutual control; 3. explanation of "inspire" indicators of fuel consumption to the staff and responsible managers; 4. choosing the right technical solution of Ukrainian producer. You have to share benefits from loss reduction with those who can impact the process. Р. 3 Historical Analysis of locomotive track. Р. 4 Monitor of emergency alarms

6. 6 Future Development This project had further development. There are fuel warehouses, refueling and fuel- servicing trucks were equipped with control systems of online monitoring. Information of the "movement" of fuel automatically falls into the SAP system, eliminating the human factor. Plan limits on refueling with automation RFID-identifier of the vehicle were also implemented. During transferring materials on fuel theft cases the great importance had the fact of coloring enterprise’s fuel in specific color with special dyes. Eprasys geo-information system, which is used for displaying the location of vehicles, was integrated with an alarm system for displaying elements of engineering infrastructure of the enterprise. Michael Litvinovsky 29.04.2016

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