Phil Beccue - Academia.edu (original) (raw)

Papers by Phil Beccue

Mary Kay O'Connor Process Safety Center, 2019

The capital investment in tank storage is a critical component of most energy companies' business... more The capital investment in tank storage is a critical component of most energy companies' business model. Decisions managing these assets are driven by the organization's overall performance objectives, business policies, balancing the risks and returns associated with different resource allocations. The discussion that follows in the body of this paper has two objectives: The first is to describe a foundation for evaluating decisions about managing tank risk that takes into account all the risk assessment techniques traditionally used but adds to this a way to incorporate these findings into a decision context that also views tanks as part of an organization's overall business model and managed as part of the organization's overall portfolio of assets supporting its business model. The second objective is to show there are basic analytical tools that add precision to the perspective described in the first objective through straightforward quantification. market conditions, technology, regulatory guidelines, and the organization's business objectives and strategies are changing. Viewing the management of investments in the tank portfolio as primarily a matter of regulatory or internal corporate compliance is as ineffective as viewing compliance as the basis for the organization's investment in any other assetpersonnel, real estate, financial instruments, marketing, logistics, acquisitions, or any other key component of the business model. This paper describes an energy company's tankage as a portfolio of investments that play a key role in achieving the organization's business objectives. Investments in that portfolio, therefore, would be, within regulatory guidelines, driven by the degree to which those portfolio investments aid achievement of those objectives, balance risk and reward consistent with the organization's policies, and increase the overall value of the organization to shareholders and stakeholders. Investments at the organization level functions something like bets: the forecasted benefits are compared to the forecasted costs and resources are allocated according to the organization's appetite for risk and the expectations of shareholders or owners. Investments in tanks have basically the same structure at the individual tank level. Inspections are conducted, risk assessments are performed, and estimates of various characteristics of the tanks are used to determine the level of further investment that is warranted. Industry guidelines play a key role in the subsequent tank investment decisions following inspections and risk assessments. This paper shows how tank investments can be viewed as a portfolio of investments serving the organization's business objectives. Mission-based perspective of tanks as a portfolio of assets Overview Energy companies provide crucial products and services to any economy: they create and distribute stored energy in the form of fuels. Storage capacity is central to both the creation and distribution of fuels, so investments in tankage is key to mission success. The Department of Energy maintains strategic storage of hydrocarbons to help balance global shortages that could threaten the economic stability of a country or region. The "mission" of an organization is the set of fundamental objectives or goals of that organization; the set of objectives that describe what the organization values, wants to accomplish, and uses as performance metrics for their operations. Energy company business plans typically include both tangible and intangible objectives; there are clear financial performance targets, but also efforts and investment toward achieving environmental sustainability, an injury-free workplace, satisfied customers and a respected corporate brand and reputation. This means in practical terms that the organization's mission statement and corporate objectives need to be translated into explicit and measurable guidelines for managers making resource allocation decisions in the various divisions and business units.

Interfaces, Oct 1, 2001

Please scroll down for article-it is on subsequent pages With 12,500 members from nearly 90 count... more Please scroll down for article-it is on subsequent pages With 12,500 members from nearly 90 countries, INFORMS is the largest international association of operations research (O.R.) and analytics professionals and students. INFORMS provides unique networking and learning opportunities for individual professionals, and organizations of all types and sizes, to better understand and use O.R. and analytics tools and methods to transform strategic visions and achieve better outcomes. For more information on INFORMS, its publications, membership, or meetings visit http://www.informs.org

Mary Kay O'Connor Process Safety Center, 2019

The capital investment in tank storage is a critical component of most energy companies' business... more The capital investment in tank storage is a critical component of most energy companies' business model. Decisions managing these assets are driven by the organization's overall performance objectives, business policies, balancing the risks and returns associated with different resource allocations. The discussion that follows in the body of this paper has two objectives: The first is to describe a foundation for evaluating decisions about managing tank risk that takes into account all the risk assessment techniques traditionally used but adds to this a way to incorporate these findings into a decision context that also views tanks as part of an organization's overall business model and managed as part of the organization's overall portfolio of assets supporting its business model. The second objective is to show there are basic analytical tools that add precision to the perspective described in the first objective through straightforward quantification. market conditions, technology, regulatory guidelines, and the organization's business objectives and strategies are changing. Viewing the management of investments in the tank portfolio as primarily a matter of regulatory or internal corporate compliance is as ineffective as viewing compliance as the basis for the organization's investment in any other assetpersonnel, real estate, financial instruments, marketing, logistics, acquisitions, or any other key component of the business model. This paper describes an energy company's tankage as a portfolio of investments that play a key role in achieving the organization's business objectives. Investments in that portfolio, therefore, would be, within regulatory guidelines, driven by the degree to which those portfolio investments aid achievement of those objectives, balance risk and reward consistent with the organization's policies, and increase the overall value of the organization to shareholders and stakeholders. Investments at the organization level functions something like bets: the forecasted benefits are compared to the forecasted costs and resources are allocated according to the organization's appetite for risk and the expectations of shareholders or owners. Investments in tanks have basically the same structure at the individual tank level. Inspections are conducted, risk assessments are performed, and estimates of various characteristics of the tanks are used to determine the level of further investment that is warranted. Industry guidelines play a key role in the subsequent tank investment decisions following inspections and risk assessments. This paper shows how tank investments can be viewed as a portfolio of investments serving the organization's business objectives. Mission-based perspective of tanks as a portfolio of assets Overview Energy companies provide crucial products and services to any economy: they create and distribute stored energy in the form of fuels. Storage capacity is central to both the creation and distribution of fuels, so investments in tankage is key to mission success. The Department of Energy maintains strategic storage of hydrocarbons to help balance global shortages that could threaten the economic stability of a country or region. The "mission" of an organization is the set of fundamental objectives or goals of that organization; the set of objectives that describe what the organization values, wants to accomplish, and uses as performance metrics for their operations. Energy company business plans typically include both tangible and intangible objectives; there are clear financial performance targets, but also efforts and investment toward achieving environmental sustainability, an injury-free workplace, satisfied customers and a respected corporate brand and reputation. This means in practical terms that the organization's mission statement and corporate objectives need to be translated into explicit and measurable guidelines for managers making resource allocation decisions in the various divisions and business units.

Interfaces, Oct 1, 2001

Please scroll down for article-it is on subsequent pages With 12,500 members from nearly 90 count... more Please scroll down for article-it is on subsequent pages With 12,500 members from nearly 90 countries, INFORMS is the largest international association of operations research (O.R.) and analytics professionals and students. INFORMS provides unique networking and learning opportunities for individual professionals, and organizations of all types and sizes, to better understand and use O.R. and analytics tools and methods to transform strategic visions and achieve better outcomes. For more information on INFORMS, its publications, membership, or meetings visit http://www.informs.org