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Optimising shutdowns, turnarounds and outages

27 June 2011

The traditional view of operational shutdowns, turnarounds and outages (STOs) holds that they are maintenance and engineering events; a more realistic and holistic perspective, however, recognises that the impact and scope of STOs extend far beyond purely maintenance and engineering functions

STOs can command significant capital and operating budgets. They attract the attention of shareholders and boards of directors, impact inventory supply chains and customer relationships. They are therefore ‘whole business events’, not simple function-specific ones.

Considering all the potential ramifications, well-executed STOs can represent a source of competitive advantage for an organisation. They can drive commercial performance, boost morale, bring recognition to high-performing teams and accelerate individual careers. Poorly executed STOs result in lost revenue, driving up operating costs. So, in today’s leaner and meaner business environments, STOs represent not only an increasingly significant challenge but also an increasingly significant opportunity.

The STO comprises various phases of activity: detailed work planning and organisation; removing assets from production; inspection and work execution, product changes, repairs, improvement activities or a combination of these; and then restoring production. An STO is complete only when the asset, unit or item is returned to service and performing at the desired level.

STOs are more complex than other project-based events. Quite simply, they involve both planned activities and unplanned work resulting from inspection. The potential for identifying previously unforeseen or emergent work requirements discovered at inspection, that must be performed within the defined time constraints of the STO, demands rapid trouble-shooting and decision-making capabilities.

The STO is often cyclic in nature and considerable reliance is placed upon key members of staff for successful execution. However, these staff may not always be available to the organisation. The challenge becomes one of adopting a replicable, reliable, process-driven approach to STO management which harnesses - but is not totally dependent upon - team members’ knowledge and experience, and enables easy knowledge transfer from one person to the next.

Kepner-Tregoe is a company with broad experience of these issues. It believes the top challenges in managing STOs include: ensuring workforce safety, whether employees or contractors; developing, deploying and communicating an effective STO process that is clearly understood by all stakeholders; managing project scope creep using prioritisation tools; capturing and analysing relevant information and metrics via management information systems; cost monitoring and control; co-ordinating and managing complex resources (it is not uncommon in some operational environments for the number of people on site to grow by 300% when contractor resources are used to assist with STO execution); transforming attitudes from ‘reactive’ to ‘proactive’; and managing the expectations of diverse stakeholders.

Phased approach
There are three primary phases that exist within a typical STO model, with sub-elements within each phase. The Definition Phase ensures the identification of major sponsors and customers at the initiation of the STO. It also provides communication channels for the business, business units and support functions to prepare the organisation for the STO. The Definition Phase leads the team through the detailed processes of defining work activities, determining work packages and the resources needed to carry out the work and perform risk assessment. On completion of the definition phase, the leadership team will have the first indications if the goals and objectives set for the STO are attainable.

The Planning Phase is primarily concerned with the organisation of the STO activity and resource availability. Tasks can be sequenced and scheduled to confirm the viability of the STO duration, and if the resources identified are adequate to complete the work within budget. The STO team must carry out a review to establish the robustness of key business processes, particularly as it is likely to be managing resources well outside the operational norm.

Metric and measurement systems are a component that must also be addressed – and not just time, cost and the achievement of overall STO objectives. While these are clearly fundamental to success, other important types of metric ‘families’ - process, people, promotional, and political which may benefit the team and activity - are often overlooked.

Prior to the commencement of STO implementation, a final round of risk assessment should be conducted on the interfaces between groups. This step ensures that planning and risk assessments done at a functional level can form part of an integrated STO plan. As the STO progresses, any emergent work will consume precious time and resources. These up-front risk assessments pay dividends in the long run by keeping emergent work to an absolute minimum.

The Implementation Phase provides a process to ensure the work that has been organised gets done. It is specifically concerned with the mobilisation and management of resources and the monitoring of activities to ensure that they accomplish STO results to the standards required in a safe and proper manner. The Implementation Phase establishes the standards of behaviour required to deliver the STO objectives.

A key element in the Implementation Phase is the close monitoring and reporting of the restart activity itself, and this is vital to the timely resumption of operations. Formal equipment acceptance and hand-over from external vendors and the STO team must be carried out to make sure potential problems are addressed and the desired outcome delivered.

Metrics and co-ordination
In the highly time-constrained world of an STO, having accurate and up-to-date information is key to making the right decisions. A dashboard that was used at a steel mill displayed metrics on progress among various teams, overall progress, costs, safety audits, extra work and other indicators. When the daily dashboard was distributed to stakeholders, it enabled sponsors, STO managers and team leaders to stay in close touch with the progress and performance of the STO. The STO completed all planned work within the scheduled period, and did not record a single case of lost time or personal injury.

In another application, a major oil company underwent a turnaround event at its Singapore refinery which, in excess of US $200 million, was the biggest and most expensive it had ever attempted. It involved specialists and sub-contractors with whom the organisation had no prior working experience, and equipment which had never been used before. As they neared the event, staff and sub-contractors found that they did not know who to approach for resources, technical support, and issue resolution. In other words, there was no clarity on ownership of the work packages. Was it the asset owner, the main contractor, or both?

Establishing an effective communication process at this stage first entailed defining roles, such as ‘approve’, ‘lead’, ‘support’ and so on, for each major deliverable. Then, through a series of communication sessions, assignments of responsibility for these roles were made among the asset owner, main contractor and sub-contractors. The result was clear ownership, and resources who knew where to go when they needed specific types of support.

Without careful planning and risk management, delays can cause the cost of lost production to far exceed the planned maintenance costs of a shutdown. A small investment in an STO process model is minimal compared with the total costs of a shutdown or the risks of a poorly executed operation, with all the attendant costly delays and incomplete projects.


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