Turnaround time
3 Sep 2010
When a major petrochemical site was suffering from a worse-than-average turnaround (TAR) safety and performance record, it encouraged its staff and contractors to spend more effort identifying and appraising risk and reviewing working practices.
While the initiative yielded some improvement, it simultaneously pushed costs on an EDC (embedded direct costs) basis into the low third quartile. The company, therefore, embarked on a fundamental review of its processes and competences with a view to achieving best-in-class TARs within a five-year timeframe.
Planning for the $70 million, three-asset TAR was at a late stage and the execution phase was just months away. Management nevertheless requested that TA Cook Consultants validate its state of readiness.
Points of view
The TA Cook asset management team’s remit included providing an independent view of the opportunity for improvement and to assist with converting the opportunity, if appropriate.
Rather than the conventional approach of reviewing only against best practice, Dirk Frame, managing partner at TA Cook, said: “The team identified and implemented ’quick wins’, even during a five-week analysis, and highlighted specific improvement actions over the short, medium and long term.”
He added: “These different improvement paths can be defined as short-impact and long-term optimisation programmes and each incorporate detailed project plans to deliver the improvements.”
The analysis showed that, even though the TAR process on the client’s site was governed by a company-wide process, adherence and understanding was mixed. This was linked to a high staff turnover and a supposed temporary shift to a TAR approach, which had actually become the default way of working.
“As in many places, the processes themselves were acceptable, but TARs were not seen by many departments as a priority,” said Frame. “Even with significant sums at stake, other work was judged more important, with the result that scope, work lists and contracts were poorly managed.”
Another issue concerned inter-departmental risk management. As this had not been clearly established, mitigation efforts were uncoordinated. Many client staff and contractors were found to be working in structures and groups without clear accountabilities and without defined expectations.
Despite a steady shift to the use of contractors in most fields of maintenance and TARs, contractor management was poor, with estimates and schedules frequently inflated by more than 25% and with execution resources showing about 40% productivity.
TA Cook identified short- and long-term opportunities worth 20-30% of the original TAR budget, which were validated with the client and agreed in principle.
With the execution phase just six weeks away, the client asked TA Cook to initiate a short-impact programme. The goal was to save 12-15% off the latest TAR estimate and to ensure on-time, in-full completion of three separate TARs on a 50-day mechanical cycle.
The analysis team highlighted specific areas that were judged, even at this late stage, to make an impact. These included contractor renegotiation on contingency assumptions, working-hour expectations, scheduling, shift crew logistics, transportation, permit preparation, scope variance and structured risk mitigation.
After agreeing certain process improvements and having secured changes in attitude, the TA Cook asset management team spent the first two weeks of the execution accompanying management, supervisors and contractors on their shifts in order to gather information. Frame said: “Significant emphasis was placed on establishing accurate progress against plan, recording and analysing timesheet data and determining the best supervisory mechanisms for controlling and improving the utilisation of labour.
Team spirit
“In the subsequent four weeks, the team transformed into a coaching, challenging and expediting force,” he added. As a result, said Frame, all three TARs came in on time, 12% below budget and with a better-than-usual safety record, despite unforeseen scope and bad weather delays.
With a heavy TAR programme scheduled over the next five years, TA Cook has now been engaged in a further 18-month, site-wide project to identify and deliver a 25-30% improvement on TAR spend from budget through preparation to execution for 2010, 2011 and sustainably thereafter.
Planning ahead
TA Cook highlights a recent study by the National Petrochemical and Refiners Association that found the “poor planning and execution of outages, shutdowns and turnarounds” to have contributed to the following:
- 95% of post-outage recommendations are not implemented
- 90% of outages do not reach goals
- 90% of outages have scope creep of 10-50%
- 80% of outages exceed planned costs by 10% or more
- 50% of outages overrun
