3 Tips for Turnaround Cost Management Everyday

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18 June, 2019

 

Preparing for a refinery turnaround has never been an easy task. Every few years executives spend considerable time overseeing the process of taking refinery units out of service for scheduled maintenance or unforeseen events.

Challenges in Turnarounds

Turnarounds are major events for refineries and other petrochemical facilities. They typically cost significant sums of operational expense (OPEX) and capital expense (CAPEX) to execute. Unfortunately, nearly every TAR invariably involves some degree of delay. When properly planned, the damage from such delay can be minimized. Today there is an increasing need to make shutdown and maintenance more predictable, efficient & cost effective. However, this goal becomes a major challenge, especially with aging assets.

Here are 3 tips to effectively manage the scope and improve the complete turnaround project management that you need today:

 

1. Plan your Turnaround as if the business depends on it (Because it does!)

Large TARs or shutdown projects involve thousands & sometimes tens of thousands of activities that must be completed within a very tight schedule. For example activities like taking into account direct and subcontract labor resources, several parts, specific equipment that needs to be required at certain times. That’s why it is critical to have a meticulous budget and timeline-driven plan that spans the entire scope of the project, from planning to execution and post-event analysis. Most plans in TARs fail because of the lack of proper prevention from ‘scope creep’.

 

Do you know?      90% of outages have a scope creep between 10% and 15%

 

These overwhelming scope additions threaten to knock other essential tasks off the ticket. Also, the scope increase could negatively affect operational performance once the equipment is returned to service. Therefore, the scope creep should be avoided.

How to Avoid Scope Creep

  • Get all the stakeholders involved in planning from the start.
  • Have at least one direct connection to TAR business objectives for every scope item.
  • Track every scope item, compare them against budget and deadlines, and map them back into procurement.
  • Pay attention to the ‘scope change management’ so that you can successfully review, analyze, approve or reject the requested and assumed changes. In this process, make sure of all approved changes map back to the initial and agreed upon business objectives and cost-benefit analysis.

2. Collect turnaround cost data

Most often industries are unable to track the TA project cost performance because they simply don’t capture the learnings from executed turnarounds. You don’t have to start every turnaround from scratch when you are backed with the insight of your own historical data. This means leaving no space for poor assumptions of future events. A continuous improvement process follows when you have this system in place.

3. Make the cost data available for all parties

Many industries still use spreadsheets and other standalone tools to keep track of the turnaround cost information. This results in low accessibility to all stakeholders who need the cost data to analyze, evaluate and execute projects effectively.

Scope Creep

Additionally, if the industries are not sharing the project cost data in real time, there are higher chances of facing significant competition and financial disadvantage in today’s digital world.

The centralized database for TA project cost management allows you to unite different work processes and disciplines by providing a data space which all employees can access. You can not only monitor progress and visualizing performance, but also sort through the huge number of data points, which helps with identifying performance drivers of your turnaround outcomes.

 

 


About Cleopatra Enterprise

An integrated digital solution for more efficient turnarounds and projects. Over 20 years, Cleopatra Enterprise has been committed to ensuring that our client’s complete shutdowns, turnarounds, and projects within time and budget.

Cleopatra incorporates different disciplines of turnaround cost management such as scope management, Estimating/budgeting, Scheduling, Cost Control, Tendering, Benchmarking and more.

If you want to know more about the Total Turnaround Management solution of cost Engineering, Please contact our experts and don’t forget to subscribe for our Newsletter by filling in the short form on the right side of the page.

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