STOs are significant events, especially with commodity price volatility forcing companies to run their assets faster and harder. I see that the International Energy Agency is forecasting a global outlay of $450bn on refineries alone between 2011 and 2035.
In a report from the Aberdeen Group, I also read that 68% of organizations still don’t deliver STOs to time and budget, 95% of the time. With lost revenue from shutdowns potentially topping $1m a day, the scale of major maintenance events means that poorly planned shutdowns can quickly turn into chaotic events involving a workforce of thousands. But how can you take more control and deliver planned, predictable outcomes?
In my experience there needs to be more emphasis on fully understanding the scope of the event, including its daily cost, lead times, the resources needed and contractor requirements, as well as the ability to efficiently manage changes during the event. I think improvements in a few critical areas can transform the efficiency of a STO event and drive down cost.
Some of the biggest challenges are around defining, agreeing and managing STO scope. I frequently see budgets and schedules blown away because the initial scope was not been clearly captured and signed off by all stakeholders, but most importantly frozen at a known point so it can be clearly managed & controlled. Many companies are looking to technology to help them in this area and with a platform like Oracle Primavera, they benefit from automated processes with standardised forms that allow all scope to be captured thru integration with an EAM solution or direct, managed as the scope item is built out by various stakeholders thru to prioritisation and optimisation, where scope is challenged and finally approved as the frozen scope for that STO event.
Optimizing schedule and resource
Ensuring that schedule and resource are optimized in the pre-work phase helps to avoid many issues later on, but it’s still common to see resource clashes, late material deliveries and poor equipment utilization as a result of inadequate planning. Keeping the execution window to a minimum is key to reducing production losses, yet many companies fail to factor-in long lead times for materials or define a critical path for deploying contractors.
Timings and resourcing requirements also change as the project progresses and the best performers are able to continually review and update their plans with accurate information. EAM tools don’t have the capabilities to optimize either schedule or resource, which is where a platform such as Primavera comes in. The companies I work with are able to sync information between their EPPM and EAM systems to improve supply chain and materials management on an on-going basis.
Automating processes and document control
The accuracy and visibility of project information is a focus in many of my conversations about STOs, especially the importance of standardized, automated processes. The Economist Intelligence Unit reports that standardization can deliver a 15% reduction in project completion time, and our own data shows that an individual’s efficiency can be improved by up to 20% when documents are readily accessible by the whole project team.
With Primavera platform customers use automated processes to provide a clear and consistent view of information across all project stakeholders. This supports greater collaboration with suppliers and contractors and ensures that critical decisions are based on up-to-date, accurate information. It also allows customers to capture, store and route all project documentation through an automated workflow, which accelerates approval processes and ensure compliance with best practice.
Streamlining delivery and simplifying reporting
Mobile technology is a disruption but also a source of enhanced efficiency and I see it playing a very prominent role in the future in the execution phase of an STO event. Such technology moving forward can also play an important role in enabling companies to quickly capture the status, emergent work and notify field delays etc whilst enabling all stakeholders access to this near real time data. This allows them to adjust schedules, re-prioritize tasks and re-plan work according to up-to-date, on-the-ground information. Analytics from the same information also provides accurate management reports and the insights needed to make well-informed decisions, on an hour by hour day by day basis not weekly etc
Controlling cost & change
Given the magnitude of most STOs, I’m often surprised by the inadequacy of on-the-job cost control processes. I frequently see costs being assessed after an event, rather than on an on-going basis during the life of a project. And this invariably results in increased exposure to risk and an overspend bombshell. By ensuring increased visibility of costs to all stakeholders at every stage of the event it allows them to continually evaluate and control. And by providing governance and standardization cost are managed across ever event in the same way.
Failure of change management processes can also push maintenance programs off the rails. With many organizations, I find that scope change and the outcomes of discovery works are poorly captured and communicated, if at all. Often, they’re only highlighted in post-project review meetings, when everyone’s trying to work out the cause of the cost and schedule overrun. This is an area where technology can add real value through process standardisation and automation. I consistently see the benefits in companies that have adopted Primavera – mainly because of the increased visibility it offers across the team. Change requests can be simply captured and shared using an approval workflow to ensure appropriate governance, and the results of discovery / emergent work can be logged and quickly assessed for cost and viability. Critical information is also recorded in templates, which enables companies to revisit previous challenges and apply what they learned before to current issues.
Improving STO efficiency to increase margin
Wrapping up, STOs are critical events in the asset lifecycle but often underperform. While any asset downtime equals lost production revenue, schedule and budget overruns also impact on the bottom line. Here I’ve discussed some of the ways to remove cost and risk from maintenance operations, and how a platform like Primavera can support more robust project management processes that improve efficiency and ultimately, margin.
Note: For those organizations looking for a complete configured solution to support the above you may want to take a look at the Accenture Turnaround Lifecyle solution (ATLS).
This post was authored by Geoff Roberts, Director, Energy Strategy, Oracle Construction and Engineering