A Comparative Case Study of Knowledge Resource Utilization 245Copyright © 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenHeadquartered in San Ramon, California, CT is engaged in every aspect of the oil
and gas industry, including exploration and production, refining, marketing and trans-
portation, chemicals manufacturing and sales, and power generation. The corporation
is also engaged in a chemicals venture (called the Chevron Phillips Chemical Company),
an interest in Dynegy Incorporated, and equity interests in 47 power projects worldwide.
Moreover, the company is in the process of developing and commercializing several
advanced energy technologies such as fuel cells, hydrogen storage, and gas-to-liquids.
CT is also a leader in gasification technology. This technology converts low-value
materials, such as refinery residue, into clean synthesis gas. In addition, the company
develops and commercializes advanced energy technologies, including fuel cells, pho-
tovoltaics, advanced batteries, and hydrogen storage. At the same time, the company’s
workforce of over 50,000 participates in community partnerships, social responsibility,
and environmental awareness worldwide.
During the 1980s and early 1990s, the refineries at CT used a mainframe system called
the Plant Equipment Information System (PEIS). The system was scrapped because CT
saw it as an old technology that was becoming too expensive to maintain. PEIS cost the
company nearly $2.5 million annually. After PEIS was cancelled, refineries were allowed
to store their information however they saw fit. This action resulted in inefficiencies due
to issues with dissimilar practices at the refineries. These dissimilar practices included
applications being used by the refineries to store inspection data as well as placing these
applications in disparate server locations. This caused great difficulty for all refineries
and CT headquarters to find the data for inspection and updating reasons.
In order to address its inefficiencies, maintain its focus on reliability, and continue
to identify its lost profit opportunities (LPOs), the company felt it needed to come up with
a better way of consolidating business practice and standardizing data formats. An
application package called the Enterprise Reliability Management System (ERMS) is the
solution eventually selected to address the problems brought about by the merger. The
system, developed by Meridium, utilizes distributed client-server technology to track,
evaluate, and improve plant reliability. Companies that have adopted the Meridium
solution include Exxon Mobile, BP, Chevron Phillips Chemical Company, Marathon
Ashland Petroleum, and Coca-Cola. The ERMS application has many of the same features
as the old PEIS. However, the new system is advantageous because it can be implemented
using personal computers rather than a mainframe and ERMS utilizes an Oracle 8i
database backend.
Meridium’s ERMS carried an initial investment of $1.2 million. Subsequent up-
grades and additional modules have raised the ante even more, but initial returns tend
to validate the investment. The ERMS assists CT in recognizing and incorporating the
best practices of the firm. These practices include efficient process control, work flow,
condition monitoring of piping, technical information, repair tracking, and equipment
forecasting. During the 2001 merger, ChevronTexaco’s ERMS implementation processes
were affected by best practices and data being introduced and incorporated from Texaco
and Caltex. New data and information created an environment in which CT would need
to upgrade its networks and infrastructure to enable the company to provide newly
incurred services it did not have before, such as streaming video.
ERMS has also helped to decrease inspector turnaround in detecting and dealing
with reoccurring equipment failures. This enables CT to identify problems in their early