Testing and Trade

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Testing and Trade

An Interview with Chris McCullough of Inspectorate, a Bureau Veritas Group Company

Why is Inspectorate involved with ASTM’s Proficiency Testing Program?

One of the primary reasons Inspectorate has been involved, and probably the most important, is that it is an excellent quality assurance tool. PTP provides us an indication of whether our laboratories are performing their tests correctly, and it also permits us to monitor their precision and bias.

Our involvement drives our continuous improvement process. We are always looking to remove bias. We are always looking to make sure that our accuracy is good. This tool permits us to do that.

Inspectorate has laboratories all over the world. We perform testing for various customers including oil majors, traders, etc., and the core of our business is in custody transfer. When one company buys a product from another company, we go in as a third party to establish what the actual product quality is. This is conveyed through our certificate of analysis showing our test results. In our role as a third party, it is very important that we reduce our bias as much as possible.

The second reason we participate is to meet regulatory requirements, particularly in the U.S. In the U.S. we test EPA [U.S. Environmental Protection Agency] regulated products, and we participate in these programs to validate our accuracy.

The third reason is for accreditation. Inspectorate has ISO 17025-accredited laboratories1 and it is mandatory that those laboratories participate in a proficiency test program for the tests that they are accredited to.

Finally, we participate because our customer base expects it. More and more, our customers are looking at our performance in these programs. It is actually one of the factors that is used to award, or not award, a contract. That is a new trend over the last several years.

What does a proficiency testing program offer?

You could use a certified reference material to check your accuracy, but proficiency testing provides much more. A typical certified reference material check does not provide insight into the performance of the industry as a whole. For example, there are published precisions within the test methods, but they do not necessarily reflect actual industry precisions.

In addition, because the sample material varies from one cycle to another, participating allows us to test a wider variety of product characteristics, which better represents the samples we are testing for customers.

What advantages does your company gain from participation in ASTM standards development?

Inspectorate’s membership has several benefits.

One is that it provides our company wonderful market visibility. We attend the meetings, and while we are not there to walk around with signs trying to market our company, it happens naturally through our involvement.

ASTM participation allows us to have input on the direction of standards, particularly those standards that can impact our business. And we can prepare for changes to standards. For example, if a spec will have a new test that requires a particular type of equipment, we are ready for it by the time the spec is released, and we avoid being blindsided by it.

We also bring institutional knowledge to the table. In addition to testing, we have a broad view on the sampling side and some of its challenges. Because we are being paid to perform these analyses by the method according to the method, verbatim, and that is what we are audited against, laboratories in our industry are often more scrutinized than most. By way of example, an oil company or refinery laboratory will be audited internally or maybe by an external registrar for ISO 9000.2 Inspectorate’s laboratories will be audited internally by our own organization, externally by registrar(s) and U.S. Customs, and then also by a multitude of our customers.

Because of that level of scrutiny, we often detect some of the challenges with specific wording in standards. And we will suggest revisions to a standard because of the issues we face during the course of being audited by our customer base.

What are Inspectorate’s current business priorities?

One of our biggest challenges and priorities is remaining flexible enough to adapt to changes. Whether driven by regulatory or commercial changes, things move quickly.

Another is this: Most of the laboratories in the D02 committee [Petroleum Products, Liquid Fuels, and Lubricants] are production laboratories that do not make a profit as generally, they are cost centers. In the testing, inspection, and certification industry it is quite a different. We are actually the primary revenue producers for our companies and thus, we are a little more sensitive about the commercial aspects of the tests that we are doing. Which equipment, based on throughput and cost, will give us the highest return on investment? What is the cost of taking this type of approach to a calibration schedule versus that one? This commercial mindset provides a slightly different perspective on how we view the testing we perform.

One of our biggest priorities is leveraging technology and refining our processes to be lean in today’s market. This is one of our biggest challenges right now with the price of crude, which has caused some of our customer base to be a little bit more demanding of our pricing. We have to look for opportunities to reduce our cost base in order to meet our customers’ pricing demands without having adverse impacts on our accuracy or turnaround time.

The outsourcing and subcontracting of laboratory services, from a single sample up to a full on-site laboratory, is a significant growth driver within our industry. Customers are evaluating every test they perform to decide which should be done in-house and which tests are more advantageous to be subcontracted to our network of laboratories.

Every company uses its own criteria, but we do see a trend towards outsourcing of non-core activities and so we are positioning our resources to cater to this trend.

What inspection and sampling services does Inspectorate provide?

The core of our business is inspection and testing to facilitate trade. We serve our customers at any time of the day, any time of the year.

When a vessel comes into a port with a cargo, say gasoline, that is loaded from a shore tank onto a vessel, that cargo may be transported to Europe, where it is discharged from the vessel into a shore tank and then sold from there. These vessels are not a 9 to 5 operation. They come in at all hours of the day and night, they load up, and they’re off on their journey. Ports are 24-hour operations.

A lot can happen during a vessel’s journey. Product quantity and quality can be affected by a variety of factors, including calibration differences in the shore tanks or the vessel taking on seawater during transport. The role we play is checking it each step along the way to permit loss control to take action as needed.

We also help our customers meet their regulatory obligations. When a cargo is imported into the U.S., it is taxed, based on the total amount of cargo. We serve as eyes and ears for U.S. Customs and Border Protection so they know how much tax to assess on an import cargo. We also provide laboratory data so the agencies know how to classify the product because two products may be similar but are different and have totally different tax rates.

However, given the trend of outsourced testing requirements from the industry, Inspectorate’s laboratory network is also providing a wider range of customers with analytical services for quality testing. In addition to full-scale outsourcing of our laboratories for refineries and terminals, our outsourced testing services also provide quality assurance for airline fuels; help with implementing quality monitoring programs; used oil and transformer oil analysis; lubricant analysis; and pipeline operator support.

1. International Organization for Standardization (ISO)/International Electrotechnical Commission (IEC) 17025, General requirements for the competence of testing and calibration laboratories.
2. International Organization for Standardization (ISO) 9000, Quality Management.

Chris McCullough is global director of technical governance for the oil and petrochemical service line at Inspectorate in Houston, Texas (www.inspectorate.com/oil). The firm provides testing, inspection, and certification services in an extensive range of industries. McCullough has long-term experience in laboratory operations, technical governance, and management, and he has been an ASTM member since 2002.


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