Historically, maintenance texts have defined a shutdown as "an unplanned equipment failure event that causes an operational production line, process, area or section of a plant to be temporarily turned off or closed for emergency repair, and resumed to operational status immediately following the repair of the failed equipment." Turnarounds are defined as "a planned event that requires the closure of an entire operational plant or facility to perform one or many pre-planned technology or system upgrades, equipment upgrades, and maintenance restorations, within a defined time period."

 

A reduced turnaround includes the planned closure of a portion of the plant or facility (i.e. process, line, area or section) is often referred to as an outage or planned outage. Turnarounds and planned outages are complex events, which involves intricate logistics. To achieve a successful execution, they must be managed in a similar manner to a multi-faceted project, requiring the procurement and management of internal and external resources-scheduled in a concurrent and consecutive manner within a short time period.

 

As full or partial plant downtime are very costly, a turnaround or planned outage differs significantly to a normal project. For example, expect the turnaround or planned outage to be executed with precision in an accelerated time period and measured in hours and days, working around the clock. And a turnaround or planned outage are most often the result of a known need to perform one or a few major repairs or upgrades, which will require a full or partial plant closure to complete.

 

The decision to carry out a turnaround or planned outage needs to made at least six months or more in advance of the event. This will allow for adequate time for event preparation. Turnaround or planned outage success is simply measured by the timely completion of all designated work and full resumption of plant operations to meet your designated completion date. Overruns are poorly tolerated due to the loss of business and expense of a full plant staffing complement, which will turn up for work on the designated plant start-up day.

 

Ensuring turnaround and planned outage success relies on the use of excellent planning and scheduling skills, which are backed up by following these five steps:

 

Managing a turnaround or planned outage isn't an everyday event and requires a modified management approach. One of the hallmarks of a successful turnaround and planned outage can be found in the appointment of a designated turnaround manager well in advance of the event itself. Temporarily relieved from his/her normally assigned duties, the turnaround manager must be introduced to the rest of the organization as a person empowered with the ability to control every aspect of the event.

 

The turnaround manager must also be afforded full cooperation and support from all other departments in preparation for the event. A typical attribute set for a turnaround manager includes excellence in project management, people and communication skills, as well as the ability to multi-task and remain calm under extreme pressure.

 

This step is about making the turnaround and planned outage real. Each major repair or upgrade that triggers the turnaround or planned outage is treated as a separate project. This involves mapping each critical path. The most extensive (or longest) major repair/upgrade will, as a rule, act to set the total duration of the turnaround or planned outage. The turnaround manager uses this duration timetable and consults with management to choose a suitable turnaround start and end date.

 

The event is now advertised throughout the company along with a call for any additional major and minor repair or upgrade work requests, which must be considered for concurrent completion during the turnaround and planned outage period. Most importantly, the call for work requests must include a "shut-off" date after which no further turnaround work requests will be accepted. This date is usually five months or more before the actual start of the turnaround and planned outage.

 

Based on the consequence of not performing requested turnaround work, the turnaround manager (and his/her associated turnaround team) must prioritize each project and build a preliminary project plan for each request. Typically, a preliminary budget is drawn from these documents and decisions are made as to which projects will be performed during the turnaround. An accurate turnaround resource plan can now be developed and must include the following provisions:

• Contracted full-time equivalent (FTE) staffing to perform all the required work;

• Work orders with detailed, objectively written instructions for all tasks to be performed on turnaround and planned outage projects;

• Secure and accessible temporary lay down or staging area(s) for all materials and parts, which are separated by project. If multiple contractors are to perform turnaround work, separate designated areas for each contractor are advised;

• Additional parking will be required for additional on-site workers;

• Movement logistics of parts and off-site parking for people will need to be considered;

• Permits for hot work, confined space, etc. must be attained;

• Insurance certificates for all contracted staff should be collected;

• If out-of-town travel is required, arrange for contractor accommodations. You might need to set up rented on-site sleeping trailers;

• Catering for all additional on-site personnel;

• Rented portable toilets to accommodate extra on-site personnel;

• Rented portable generators, heavy equipment and other tools to accommodate specialized work requirements;

• Fuel for additional engine-driven equipment; and

• Documented shutdown and start-up procedures for all affected equipment.

 

Turnaround and planned outage outcomes detail a series of deliverable goals and targets, which must be accomplished to remain on schedule and deem the event to be successful. These outcomes are statements used to validate the resource plan and help drive the schedule. For example:

• All turnaround work will be completed and equipment will be tested ready for an 8:00 a.m. re-start on August 15th, 2009;

• A complete new plant compressed air system (capable of delivering 120 psi air to 230 plant-wide points) will be fully operational and ready for service by 8:00 a.m. on August 15th, 2009; and

• The efficiency of unit 123 will be increased to a design throughput of 120 litres per minute or more, etc.

 

With outcomes known, overall timetable and work-requirements set and a resource plan in place-all turnaround work can now be planned and load levelled by using project management or specialized "turnaround scheduling" software.  Resource scheduling and delivery deadlines can now be developed and appropriate purchase orders released for process. Due to long lead times for parts, materials and tools-a delivery window requirement stated clearly on the purchase order is advised. This will allow items to be staged in an orderly and planned manner.

 

Every turnaround and planned outage will present its fair share of "gremlins" to thwart the process. Using successful turnaround processes and templates as a base and following the five-step preparation process, however, will enable maintenance professionals to achieve their desired turnaround and planned outage outcomes.

 

For more information on implementing asset maintenance management programs, contact Ken Bannister of Engtech Industries at: (519) 469 9173 or by email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it . 

 

 

The asset lifecycle can be broken down into seven major categories, including:

• Asset investment decision;

• Asset design specification;

• Make or build and/or supplier selection for the asset;

• Asset construction/installation project;

• Operational phase of the asset;

• Maintenance phase of the asset; and

• Decommissioning of the asset.

 

Beginning with phase three of the asset's life, the maintenance and engineering groups may become involved in construction of the asset, or will at least be consulted in the supplier selection for the asset. From this point onward, organizations that are typically involved in STOs will deal with properly maintaining the asset-whether in major repair outages, routine monthly, weekly or even shift outages. When you consider that the personnel who are involved in STOs can dramatically impact the majority of the cost of the asset lifecycle-do companies understand that being more effective and efficient during their STOs can dramatically increase profitability?

 

Controlling expenses will increase profits. Boosting capacity will have even a greater impact on profitability, however, since it generates improved revenue. Considering the expense side, during an STO, the available resources in the form of maintenance labour and maintenance materials are utilized. In addition, contractors provide additional services, including labour and material. Effective and efficient use of these resources can control or even reduce expenses.

 

Looking at the revenue side, if equipment is properly overhauled, restoring it to an acceptable baseline-the reliability and efficiency of the asset is increased. If, through good planning and scheduling, the STO meets or even beats the schedule, there's increased availability. This translates into additional capacity.

 

In its simplest form, return on assets (ROA) is a company's profit divided by the valuation of the assets required to produce a profit. The larger the ROA number, the more efficient and effective an organization is at utilizing its assets. Conversely, the smaller the ROA-the more inefficient and ineffective a company is in managing its assets. Since STOs involve both the profit and asset valuation side of the ROA equation, it would be beneficial to clearly highlight the impact that STOs have on the bottom line.

 

We can begin considering the expense side, by reviewing a quotation from the book: "The Balanced Scorecard," written by Kaplan and Norton on pages 55 through 61. When considering the financial perspective of the balanced scorecard, the authors urged organizations not to try to reduce spending, but increase their efficiency and effectiveness. This was especially applied to asset utilization, which must meet objectives, such as return on capital employed. This is the same as ROA mentioned previously.

 

Unfortunately, this hasn't been the case in most maintenance and engineering departments. A recent report has shown that many organizations have gone beyond lean and are now anaemic. In fact, the same report showed that 17 percent of all companies weren't keeping their assets in compliance with regulatory agencies. This is due to the fact that most organizations are focused on costs and not revenue. As we review the two approaches, the following utility case-study application highlights why this cost focus is the wrong approach. We will begin by examining STO expenses.

 

There are two main areas of STO expenses: labour and materials. The labour for an STO can either be internal or external. The materials can also be from internal procurement or supplied by a contractor area. In either case, the inefficiencies have a similar impact. In terms of an STO, consider how often employee or contractor personnel are observed losing productivity for the following reasons:

• Waiting for job instructions;

• Seeking supervisors for additional directions or clarifications;

• Examining the job site due to unclear instructions;

• Multiple trips to stores or receiving to procure spare parts;

• Not having the right tools or equipment;

• Waiting for approval on a change of job scope; and

• Too many technicians sent to the job.

 

In organizations with poor planning and scheduling tools, the hands-on productivity for the workforce during an STO can be as low as 20 percent. The labour utilization (for the utility application during its STOs across portfolios) was found to be about 30 percent. The case-study example showed that if the utility improved its labour productivity to 50 percent through the use of better planning and scheduling tools and processes-the potential savings would be US$8.1 million annually.

 

The second area to consider involves spare parts or materials. There are many material-related delays and these incur excess costs, including:

• Productivity loss for technicians waiting on materials;

• Technicians travel time to obtain materials;

• Time for the technicians to transport materials to the job site, identify untagged materials, find substitute materials, locate parts and remote/alternative locations, obtain approval for purchase orders and process a purchase order;

• Cost of processing the purchase order, returning unused materials to stores or to the vendor and expediting unplanned materials; and

• Lost productivity due to other crafts having material problems; wrong materials, planned, ordered or delivered; and missing materials.

 

During STOs, the same utility detailed its spare parts and material usage. It found that spare parts, materials and related procurement cost an average of $57 million annually. The projected improvements in its STO processes showed a savings of $9.5 million.

 

After examining costs and potential cost reductions, it was determined that by improving planning and scheduling techniques and tools-the utility could reduce annual costs by $17.8 million. While this seems to be a significant cost savings, the real benefits were discovered through a review of asset utilization. Across its portfolio, the utility's revenue loss during STOs totalled $119 million. The managers involved felt that with better planning and scheduling tools and processes-they could reduce the STO time by 10 percent, saving approximately $11.8 million.

 

In addition to just the STO improvements, the managers also saw the potential associated with reducing their forced outages, some of which were caused by errors committed during the STO. After reviewing the number of forced outages they incurred during the year, the losses were shown to be approximately $95 million. After reviewing the causes of forced outages, it was felt that a 20-percent reduction was achievable. This reduction would produce additional capacity valued at $19 million.

 

One last area that was examined involved asset efficiency. This is beyond availability, but looks at the efficiency of the unit, which is expressed by most utilities as heat rate. After reviewing efficiency losses, a five-percent increase across the portfolio was projected by the utility to be achievable at an additional capacity worth $24 million.

 

Now let's compare the financial difference between cost and revenue. If the utility was focused on costs, between its labour and material cost reductions, a cost savings of $17.8 million could be achieved. If the utility focused on revenue increases, between shortening STO durations, reducing forced outages and improving generating unit efficiencies-increased revenue would total $54.8 million.

 

So if the utility placed more emphasis on where the greatest benefits were going to be achieved-it's clear that increasing revenue would generate more profit than reducing costs. In reality, improved planning and scheduling tools and processes will help an organization reduce costs, while the same improvements will also help increase revenue. The increased revenue isn't automatic, as you also require a dedicated focus on monitoring STO and forced outrage durations and efficiency improvements.

 

With their STOs, a lack of clear understanding of company financials is a problem that most organizations face. For example, how many outage planners have a clear understanding of what a minute of downtime on a particular unit is worth? Or do they just focus on how to reduce the headcount on an STO? Or can they balance the labour and material expense versus the value of the capacity, which is lost by extending the outage?

 

Also, in terms of the decision cycle, do individuals (who determine STO annual budgets) look at the cost versus revenue calculations when setting the duration and number of STOs? If they only look at reducing STO costs each year (without considering the impact on the revenue-generating capability of the assets) they may have reduced costs to a point that their assets can no longer keep the company profitable.