The Case for Optimization
Author: Kevin Duffy
A traditional view of shutdowns, turnarounds and outages (STOs) holds that they are maintenance and engineering events. Yet they command significant capital and operating budgets, attract the attention of shareholders and boards of directors, and impact inventory supply chains and customer relationships. This indicates that they are actually whole business events, not function-specific, that require exceptional planning and execution.
Considering these ramifications, well-executed STOs can represent a source of competitive advantage for an organization. They can drive commercial performance, boost morale, bring recognition to high-performing teams and accelerate individual careers. The corollary, of course, is that poorly executed STOs can cost millions of dollars in lost revenue, drive up operating costs, and cause permanent career damage. In today’s leaner and meaner business environments, STOs represent both an increasingly significant challenge and an increasingly significant opportunity.
A well-planned STO is a crucial business event that must address and meet the challenges presented in these key areas:
1. Workforce safety. Large numbers of contractors may be working on site with little knowledge of equipment and processes. Employees must carry out tasks that are not routine. During an STO, safety must be the number one priority.
2. A guiding STO framework, clearly understood by all stakeholders. Without a holistic approach, the coordination and execution of the complex tasks become extremely difficult. Myriad approaches make communication close to impossible.
3. Project scope. Project scope creep is a common issue in STOs as the inspections only possible during the STO reveal added work. Managers need prioritization tools to stay within plan and budget. Scope creep that is countered with work cuts may affect operational performance after re-commissioning.
4. Measurement and control. Measuring the right things, the right way, at the right time—and communicating them appropriately allows STO leadership to maintain control during execution. Problems that recur in future STOs, are symptomatic of the absence of good measurement and control.
5. Business processes. In most organizations, business processes are not designed to cope with major peak loads, special cause events, and the other unusual demands of an STO. Often basic business processes need updating to accommodate an STO and the potential emergent work requirements.
6. Cost management and control. An STO requires real-time cost monitoring that provides timely data throughout the STO, enabling informed choices on courses of action.
7. Coordination and management of complex resources. It is not uncommon for the number of people on site to grow by 300% during an STO as contractor resources join experienced employees carrying out unfamiliar duties. Without clear communication and management protocols, up to thirty percent of the working day can be lost waiting for instruction or problem resolution.
8. Proactive v. reactive culture. Shedding a reactive culture and moving towards anticipating and resolving issues before they impact is critical to STO success. Every organization has a hero or two—people who are remembered for ‘saving the day’. But heroism is only required when there’s trouble. How many personnel are rewarded for thinking about and preventing things from going wrong? This is perhaps the most essential component of a successful STO.
9. Stakeholder expectations. Although STOs are major business events, indirect stakeholders are rarely involved until a restart is problematic or supply to market falters. Early engagement of key stakeholders enables communication of likely risks and consequences and enables them to plan accordingly.
STO optimization requires a holistic approach to managing the entire set of complex activities and relationships in the STO process. The successful STO adopts a replicable, reliable, process-driven approach to STO management that harnesses knowledge and experience and enables easy knowledge transfer from one person to the next. There must be a clear and common process framework and the processes that drive the flow of information and activities within this framework must be aligned to efficiently drive STO success.
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For the full article, go to: Strategies to optimize shutdowns, turnarounds and outages
About the author:
Kevin Duffy is the global vice president of operational excellence for Kepner-Tregoe (KT), an international consulting and training services organization. For more information about KT’s STO training services, contact Kevin at firstname.lastname@example.org or visit www.kepner-tregoe.com.