Effective Management forShutdown & Turnaround

Dubai | July 2019

The purpose of this training course is to enable attendees to contribute to the optimization of the management of Shutdown/Turnarounds within their organizations by application of the following items of key learning; enhancement of the company’s strategic Shutdown/Turnaround capabilities, improvement of the company’s approach to planning and scheduling, frameworks for effective turnaround execution, the unique safety requirements of turnarounds, the “one team” approach to turnarounds, ensuring a safe and orderly transfer from Shutdown/Turnaround phase to Start-up phase, provide a comprehensive knowledge base for turnarounds, demonstrate the latest planning techniques for turnarounds, sharing experiences, ideas and issues. This eBook will focus on how to form an efficient Turnaround Plan and how to control costs during the shutdown/turnaround project.

A turnaround can be one of the most difficult events for an operating plant to conduct. Most continuous processes run without interruption, leaving little opportunity for routine maintenance on critical equipment, especially if entire systems need to be isolated to complete work. The combination of cyclical repairs, equipment inspections, product changeover and capital projects can have a resounding effect on a company’s bottom line. Although taking a plant or production unit out of service for a short period of time to optimize productivity in the long run may be inconvenient, it is necessary to maintain continuity and optimal productivity. These highly complex events require significant capital expenditure and, since any plant downtime represents a loss of revenue, the incentive to stay on schedule is high.

The optimization program begins with forming a specifically designated TAR team that consists of stakeholders from every relevant department. The team’s first task is to conduct an analysis to identify the work necessary during the turnaround and define project goals.

Considering work performed during a TAR costs three to four times as much as work performed during regular operating times, each item proposed for a TAR scope registry needs to be scrutinized and debated among the team members. Only absolutely necessary improvements, capital projects and tasks essential to keep the plant operating efficiently should be included. A tight worklist is especially important at this stage because the backlog will almost certainly expand as the shutdown takes place – 90 percent of outages have a scope creep between 10 and 15 percent.

To avoid scope creep and properly evaluate which tasks deserve to be on the exclusive turnaround list, the team can utilize prioritization tools such as the criticality matrix (see the figure given below) to graphically rank tasks by importance. To use the matrix, members of the TAR team need to follow a thoroughly explained, agreed-upon assessment standard. In this particular example, a task ranked 15 or higher is classified as most critical, with those scoring five to nine slightly less important and lower levels considered secondary work. Proper scope management can have a 20 to 25 percent benefit to overall turnaround success. Once the TAR team has prioritized the work, it can create an organized maintenance activity timetable.

How to Effectively Plan for Shutdown & Turnaround

1. The Turnaround Plan

Setting A Worklist

2 Key Pain Points in A Shutdown & Turnaround Project

TheTurnaroundPlan

Controlling CostsDuring TheShutdown/Turnaround

ConsequencesSe

verit

y

Clas

sific

atio

nDi

sast

rous

5

Multiplefatalities,>5. Largeeffects onlargeexternalinhabitedzones-severalfatalities

Extensivedamage>$8M

Major loss,notrecoverable.More than3 dayslostproduction

Majorpollutionwithsustainedenvironmentalconsequencesexternalto the site

Cata

stro

phic

4

Lethal effecton severalpersons(severalfatalities).Lethalexternaleffect - onefatality,severalphysicalinjuries

Majordamage$6M-$8M

Major loss,upto 50%notrecoverableupto 3 dayslostproduction.

Majorpollutionexternalto the site.Evacuation ofpersons.

Maj

or

3

Lethal effecton personand / orseveralpermanentextremaleffects

Localizeddamage$2M - $6M

Mediumloss,not whollyrecoverablethroughnormalproduction

The next step is for the TAR team to determine the specific maintenance activity timetable in the form of a detailed plan. By using agreed-upon site planning standards, the group should now create a step-by-step approach using the best execution estimates to complete the worklist and stay true to upcoming budget and duration targets.

Once the plan is in place, managers will delegate the tasks to the appropriate team members. Management should assign team members responsibilities in accordance with their personal levels of expertise, knowledge, skills and experience. All TAR participants, especially managers and supervisors, should develop certain levels of accountability. Involving all team members in all aspects of the TAR process will help everyone understand their roles and responsibilities and build their skills to better handle these inevitably reoccurring, albeit infrequent, projects. Filling the appropriate positions with the right employees is crucial for the turnaround coordinators – who are in charge of overseeing the planning and execution of maintenance activities for each operational unit – to manage the flow of work.

As the project goes forward and resources are mobilized and managed throughout the planning and execution process, all activities should be monitored to confirm they meet efficiency and environmental requirements. Gathering sufficient strategic data is an important step to address risk and make the best possible decisions to maximize the potential for success. The TAR team should be able to provide exact records on how the project is developing by using key performance indicators (KPIs) that specifically track front-end loading (FEL) activity. Tracking and recording these FEL procedures will also aid in preproject planning the next time around. With the help of these metrics, decision makers can better control project performance and focus on areas that may need improvement. In addition to this data, the TAR team should organize a daily team meeting to report progress and act as a value-added communication platform between departments.

Project Implementation

In the final step in the TAR optimization program, after the plant is successfully back online, the TAR team from all departments will reflect on what was done well and what was not to improve for the next shutdown. All maintenance activities should make a habit of planning, executing, reflecting, improving and planning again, as highlighted in the Deming cycle.

This ritual is not exclusive to individual tasks but also applies to a site’s overall periodic shutdown routine. Discussing the data will help the team get the full picture of how the project turned out and identify ways to implement continuous improvement measures. For this meeting, companies may find inviting a facilitator from outside the organization can help control the flow of information and prevent finger-pointing.

Even though a TAR may be executed safely, efficiently and on schedule, an opportunity to optimize turnaround disciplines and practices will always exist. Tasks must be coordinated better, delays mitigated, the schedule adhered to and progress reporting accurate. By developing an effective process to help facilitate the shift from oversight to driving performance, managers can enforce proactivity, increase performance and have successful TARs with short- and long-term benefits.

Sustainable Improvement

Plan

Check

DoAct

A Turnaround/Shutdown (TAR/SD) cost estimation and tracking standard supported by prudently selected toolsets delivers significant value to an asset-intensive business in terms of cost performance. An industry-wide trend is on improving cost competitiveness of plant Turnarounds/Shutdowns against established benchmarks.

Many sites find it a challenge to improve their Turnaround/Shutdown cost estimating and tracking. This is caused by inconsistency in methods and assumptions (mainly experience based), insufficient planner experience, and lack of historical information retention. Many sites also still use Excel and similar programs for work-scope review, cost estimating, and cost tracking. In many cases, the information between programs is transferred or developed manually and is inconsistent. The inefficiency also impacts the cost of planning for a TAR/SD.

2. Controlling Costs During The Shutdown/Turnaround

Effective Cost Estimating and Tracking Will Enable The Organization to PlanTurnaround/Shutdown Work as Competitively as Possible and, at The Same Time,

Track Closely The Costs to Make Informed Decisions(Typically Translates to 10% to 15% Total Installed Cost Improvement)

1. The first step of the cost planning process is to develop a “statistical estimate”; this can be based on initial equipment count and rough scope of work. The statistical estimate and equipment count should then be compared with Solomon top-quartile figures to agree on the turnaround “target budget.” This figure can then be saved in the SAP PS or any other Enterprise Resource Planning (ERP) system as a “cost plan version.”

2. The second step of the process is to further refine the scope of work using historical data and develop a “rough order of magnitude” estimated cost. This second-level estimate is compared and reconciled with the target budget on to agree a final budget, which can be assigned to the Turnaround/Shutdown project and then distributed down to the individual WBS elements.

3. The third step of the process is to develop a detailed bottom-up cost plan as the sum of plan costs for all work orders assigned to the WBS elements. Detailed bottom-up cost planning will be carried out by assigning materials and services to operations on the work orders. This will involve an iterative process of scope optimization. The estimate is to be performed using integrated planning and estimating software (e.g., Hard Dollar, Prism, EcoSys) with industry norms adapted/adjusted to the site. Task lists can be used to facilitate the assignment of materials and services to equipment items and enable standard job methods and cost plans to be imported to the work orders. The final cost plan will be saved as the “baseline cost plan” version and used for cost tracking and control purposes.

Any discovery work that arises during the Turnaround/Shutdown should be planned against specific “Discovery Work Orders” (assigned to the WBS element for “Discovery Work”) by assigning materials and services to operations on the work orders. This provides planned costs in the cost reports, which are visible against the WBS element for discovery work. Carrying out Service Entry/Acceptance for this work will also provide actual costs in the reports. Any final adjustments can be carried out post-TAR/SD.

Cost Management Process Overview

In order for an organization to improve cost estimating and tracking for Turnaround/Shutdowns, you will need to look from end to end the following areas:

1.Improve processes: Well-defined cost estimation and tracking processes within a transparent end-to-end TAR/SD process and cost critical “pain points” need to be identified and designed out.

2.People: Capable, cost-focused, and value-aligned TAR/SD planners, estimators, and steering committee members.

3.Technology: Cost estimation and tracking tools with proven effectiveness and low total costs of ownership. The tools need to be able to help the TAR/SD organization with Maximizing project accuracy, Visualizing project execution, Analyzing project data, Reusing the cost data for future TAR/SD and/or routine work, Planning for the unexpected, Measuring budget and earned and accrued costs, Leveraging dynamic scheduling integration to cut time and costs.

Today, there are myriad programs on Shutdown & Turnaround but unfortunately, most of them are devoid of tools that can train Directors, Supervisors and Engineers to enhance company’s strategic turnaround capabilities. In our 3 day workshop, Eric Scott, will teach you how to sail your way through the nitty-gritties of Shutdown & Turnaround, through real life case studies, Role-Play Board Meetings, interactive presentations about improving company’s approach to planning and scheduling, providing a framework for effective turnaround execution, telling how to foster the ‘one-team’ approach to turnarounds, guiding how to ensure a safe and orderly transfer from turnarounds phase to start-up phase and much more. We urge you not to miss this opportunity, and take-home expert Shutdown & Turnaround skills.

Cost estimating and control processes and resources should be in place to deliver estimates and latest-cost forecasts to these levels of accuracy at the different stages of the Turnaround/Shutdown cycle.

Expected Accuracy

50

40

30

20

10

0

-10

-20

-30

-40

-50

Perc

ent (

%)

+/-50%

24 16 12 10 8 6 4 -4 -6 -122 -20

+/-30%

+/-10%

TAR/SD Latest Estimate Accuracy

Months Prior to TAR/SD

+/-3%

for More Details Contact jalpa@questmasterclass.com