Impact

Our strategic goal was achieved:

1. timely delivery of oversized cargo in 2020 was accomplished
2. within a narrow one-month long transit window, 4 days ahead of the schedule
3. without damage
4. within the budget, and
5. without a single case of COVID-19 infection.

Context and challenges

Irkutsk Oil Company (INK) is one of the largest independent oil and gas producers in Russia. INK launched the construction of the Irkutsk Polymer Plant (IPP), which is a 100% subsidiary of INK. The plant was launched as part of the phased implementation of the federal gas project, which provides for an increase in the GDP of the Irkutsk region by 6%. Some 1,500 new jobs will be created upon completion of the IPP construction.

To construct the IPP in 2020, it was necessary to move expensive oversized cargo from South Korea to the IPP construction site in Ust-Kut (Irkutsk region). This operation was the largest logistics project in the Irkutsk Region and one of the largest in Russia.

The key challenge of the cargo delivery project was the necessity to deliver the cargo within a narrow transit window of one month due to severe ice conditions on the Northern Sea Route (the shortest sea route between the European part of Russia and the Far East through the Arctic).

Any deviation from the plan and failure to meet the deadlines for any of the delivery stages meant the project would be delayed by one year involving multi-million-dollar losses. To minimize the risk of these losses, it was decided to conduct a series of risk sessions with the assistance of professional facilitators.

Project objectives

The strategic goal of the project was to provide for the construction of the IPP in Ust-Kut:

1. timely delivery of oversized cargo in 2020
2. within a narrow month-long transit window
3. without damage
4. within the budget.

Approach

The project was undertaken from February 2019 to September 2020 and involved 7 stages:

1. Setup meetings to work out an approach to conduct a series of risk sessions, developing a risk session No.1 scenario.

2. Risk-session No. 1 with the assistance of external facilitators: "Oversized cargo delivery logistics risks analysis for the construction of the IPP " (2 days). More than 40 participants: top managers of the customer company INK, representatives of the plant from Japan, representative of the Korean port, partners from the largest Russian oil companies experienced in the implementation of large-scale logistics projects, Russian and foreign experts from the largest logistics companies. The session was conducted in two languages: English and Russian. Tasks: generate a list of the maximum number of risks, work out risks by category, formulate an action plan (scenarios) for the risks listed.

3. Wrap-up meeting to summarize the results, providing a report for further effort.

4. Risk sessions within the client company to monitor key risks, the list of risks and the action plan were updated (conducted by the internal facilitators monthly till December 2019).

5. Risk-session No. 2 with the assistance of an external facilitator: "Priority goals of the INK company for 2020" (1 day). Participants: 23 people (top management of the customer company). Objectives: to analyze and formulate a risk management plan for the successful implementation of the priority goals in 2020 taking the risk-sessions held in the first quarter of 2019 into account.

6. Wrap-up meeting to summarize the results, providing a report for further effort.

7. Risk sessions within the client company to monitor key operations (conducted by internal facilitators monthly till September 2020).