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Lunan Chemical Strengthens Lean Management and Reaps Benefits from Fusel Oil Recovery at the Start of the Year Author/Source: Date: 2019-02-11 Clicks: 224 “Starting from January 8th, we have been recovering fusel oil on a weekly basis; to date, a total of 136 tons have been recovered.” Previously, it was disposed of as waste at a price of only 226 yuan per ton; now, by returning it to the crude methanol tank for further distillation and purification, and based on factors such as the concentration of impurities and the yield of methanol, we estimate that we generated nearly 130,000 yuan in savings just from this process in January alone. ”As soon as he sat down, Yang Bin, the general manager of the Denatured Alcohol Division, began to explain the figures to the reporters, counting on his fingers: “This doesn’t even take into account the benefits resulting from the reduced production of fusel oils and the increased output of pure methanol.” ”As Yang Bin spoke, a proud smile appeared on his face. On December 11, 2018, in order to deepen lean management, enhance the company’s market competitiveness and risk resistance, and accelerate the process of full marketization, the methanol production unit of Lunan Chemical was renamed the Alcohol and Ammonia Division, which is responsible for the production and management of the company’s two main products: methanol and synthetic ammonia. The divisional system, as compared to the previous workshop system, decentralizes some powers, offering more flexibility in management, and at the same time reduces the burden of having to earn one’s salary. For each measurable aspect such as cost, consumption, output, and product price, there is a numerical settlement, which is ultimately converted into wage income. How to enhance market competitiveness and withstand external risks? How can we ensure that the salary levels of colleagues in the same department do not decline? In the newly established Alcohol-Amine Business Unit, General Manager Yang Bin sometimes furrowed his brows, sometimes paced back and forth, and sometimes remained in silent thought. “Lean management, making the most of every resource, ensures that even the smallest amounts of energy in hidden areas are utilized to the fullest extent, thereby maximizing the efficiency of system operation. ”The demands of Chairman and General Manager Liu Qiang echoed in his ears. Start with fusel oil. said Zhang Ling, the deputy general manager. Fusel oil is a by-product obtained during the production of pure methanol. To ensure the quality of the pure methanol product, fusel oil with a methanol concentration of around 66% is extracted at regular intervals during the methanol production process. The total amount extracted per month is approximately 210 tons, and its selling price is around 47,000 yuan. If we want to make use of it completely, couldn’t we re-distill and purify that 66% methanol instead of selling it at a low price as waste? Yang Bin led the management and technical staff of the department to start working on solving this difficult problem. Since the 66% methanol contained in fusel oil also includes other high-boiling-point impurities that are difficult to separate, after examining the impact on the system and potential variable factors, they prepared plans as well as feasible solutions for the reuse of the fusel oil. On January 8th, during the day shift of Team 1 in the Alcohol-Ammonia Division, 10 tons of fusel oil were mixed into 300 tons of crude methanol, and the mixture was sent to the distillation tower via pipelines. In the control room, Yang Bin along with technical staff and operators closely monitored every data change shown on the computer monitors – temperature, liquid level, flow rate, and valve opening degrees. Data at each time point was recorded accurately. By the end of the shift, the system was operating stably, and the first experiment was a success! But Yang Bin’s tense nerves did not relax; as a chemical enterprise operating on a continuous basis, 8 hours of operation is not enough to prove anything. Three days later, the system was operating stably, the ethanol content in the methanol produced by the device remained constant, and the product quality was still of top grade; Yang Bin finally felt a sense of satisfaction. Thus, every 3–4 days they carried out a reinsertion process; aside from the 30 tons sold at the beginning of the month, all 136 tons of fusel oil extracted were recovered and processed. During this period, the process engineers continuously optimized the operations; the amount of fusel oil recovered decreased by nearly 50 tons compared to the previous month, while the production of pure methanol increased by nearly 80 tons, thereby maximizing the efficiency of the system. With its dedication and care, the Alcohol-Amine Division took advantage in the early years of 2019 of the benefits brought about by lean management in terms of fusel oil recovery. Postscript: At the end of 2018, according to predictions by authoritative analysis firms, the price trend of chemical products was expected to continue declining in 2019. To cope with this ongoing downward trend and enhance their resilience to risks, Lunan Chemical focused on internal improvements while keeping a close eye on market developments. It promoted lean management practices, adjusted production processes to be more flexible, and adhered to the principle of making maximum use of resources in all aspects related to costs and consumption, thereby ensuring that its production system achieved optimal efficiency. ““Eating everything to the last drop” is a vivid metaphor; in reality, it represents the concrete and company-specific actions taken by Lunan Chemical to strengthen its operations. The recovery of fusel oil is just the beginning; going forward, Lunan Chemical Company will implement various measures to make use of by-products, waste liquids, waste residues, and wastewater in a systematic manner – such as flexible production of ethyl esters and butyl esters, as well as the use of larger-sized raw materials. These efforts to turn waste into resources will continue to be carried out, and the benefits of lean management will keep materializing in 2019.