Do you know that cost overruns and schedule delays are a recurring problem of shutdowns, turnarounds and outages and out of 100, only 32 projects are successfully implemented? Poorly executed turnarounds have a huge cost implication on the company in terms of loss of market share and revenue.
To avoid this, there must be adequate planning for months before the shutdown, turnaround or outage. The plan needs to clearly mention all the activities from one phase to the next one with all the expected deliverables at each stage. However, even after the precautions and planning, several companies continue to face a variety of challenges during STO management. Let’s overcome such challenges by following the below mentioned best practices:
1. Effective project scope management for a turnaround
Why do you need it
The proper and careful planning of the project scope enables the teams to optimize the scope and the necessary activities during a turnaround.
How to plan
The team should agree on the scope in advance to minimize the number of changes during or straight before the turnaround. Many companies have proper scope review processes in place, so the “agreeing” is not the hard part. Having a lot of inspections in the scope can create a lot of uncertainty in the amount of changes during execution, as work from inspections will arise at some point. Only questions is ‘how many’.
What are the challenges
Scope changes, especially after scope freeze, have a significant impact on the quality of work planning and the overall performance of the turnaround. Since the challenges in project scope will always be there even with all the proper planning, handling them properly is critical in ensuring the success of the shutdown project.
Delays are caused because of the scope that changes shortly before & during the turnaround which is then responsible for project inefficiencies, extra costs, or failure to complete the project as planned. Some examples of the challenges you may face: work from inspection, permitting issues, schedule clashes, discovery scope, HSE incidents which cause standstills, etc.
What is the solution
To avoid the negative impact of these changes, there must be a system which can control and manage the scope change. Cost Engineering Total Turnaround Management performs strict scope management. This includes challenging each item that is added to the list to be executed. Do we really need to perform this during the turnaround, or can this be done later? You should analyze the impact of each scope item on quality, risk, schedule, and cost. Using historical data and proper estimating and scheduling tools are key here.
2. Controlling costs in a turnaround project
Why do you need it
It is always challenging to control costs & duration of a shutdown. Tracking costs is essential to avoid overruns. Compare against the expected progress to ensure that there is no significant deviation and you will be able to spot potential hick-ups early on.
How to plan
Cost tracking involves both direct and indirect expenses. Costs like equipment hire, materials, regular labor, overtime, external labor, allowances should be well accounted for and charged to appropriate cost centers. Based on the percentage, each cost center contributes to project scope, and cost can be shared between maintenance and CAPEX projects. If the cost can be captured after each shift and compared with the original budget, then this information can be used to plan, schedule & manage turnarounds properly in future.
What are the challenges
Mostly, STO projects are supported by complex financial structures that are different from traditional budgeting systems and therefore, it becomes difficult to track costs.
What is the solution
With Total Turnaround Management of Cleopatra Enterprise, you can track separate expenses for parts, equipment & labor. In addition to this, the software tool Cleopatra Enterprise offers Cost Management Module that provides continuous insight into the cost status of the turnaround while the Estimating Module creates a solid base for scope estimates & estimation of scope changes in the project control phase.
3. Accurate stakeholder communications
Why do you need it
Clear, timely and accurate information creates a better environment for trust, teamwork and problem-solving. There should be transparent communication between senior management, the turnaround manager and all the turnaround team members in terms of correct information and progress status.
How to plan
All the involved teams, whether directly or indirectly, should have accurate information about the progress of the STO, the remaining scope and whether the teams are meeting the target. In case of deviating off-target, everyone involved should communicate and discuss the reasons which prevent them from performing. This helps with making the right management decisions in terms of changing resource allocation, scope, cost overrun projections and schedule changes.
What are the challenges
The manual spreadsheets, forms, and documents limit the flow of information to all stakeholders. This makes it difficult to track the progress, procedures, protocols, and safety requirements from many contractors, teams and hence, impact the success of the turnaround.
What is the solution
Integrated Total Turnaround Management from Cleopatra Enterprise connects different teams working on the same turnaround in one solution. Teams can communicate, share information, use another team’s output as an input for their discipline, and update the turnaround management accordingly.
4. Controlling the shutdown without any schedule delays
Why do you need it
Scheduling is the planning of processes and determining the action sequences, duration and resource requirements. Resource allocation should be taken into consideration including the labor, materials, space limitations and time.
What are the challenges
The shutdown projects have schedules that are closely related to the budget. If a delay occurs, it will directly impact the budget with increased labor and possible contractual penalties. The manual capturing of data from the field is slow and cumbersome.
What is the solution
Cost Engineering’s Total Turnaround Management includes a Turnaround Knowledgebase that provides manhours per activity. Considering all the work orders consisting of multiple activities, knowing the manhours per activity helps you put them in the right order and complete your turnaround on time.
If you want to know more about the turnaround best practices and Turnaround Cost Management solution of Cost Engineering, please contact our experts.
