5 Ways to Improve the Business Impact of STO Events

5 Ways to Improve the Business Impact of STO Events

 

Shutdowns, turnarounds and outages (STOs) are now an integral part of business strategic planning and no longer perceived as just routine maintenance events. They are the foundation for ensuring the safety, high quality functioning, and throughput of operating units, which, when done properly, can translate into more revenue. But poor STO preparation and execution can also have a long-lasting effect on a business that goes far beyond the basic maintenance work performed. Below are five key factors that organizations need to consider when undergoing an STO:

 

By: John Natarelli

1. Preparing Thoroughly

Failing to plan is planning to fail. Not preparing thoroughly for a planned STO can be disastrous. It doesn’t matter if it’s a three-day shutdown for cleaning or a 50-day turnaround event. When a unit is not running, it’s not making money. Sites must prioritize preparation phase activities as much as productivity during execution. So what does a successful preparation phase mean? All critical elements and activities must be delivered before execution begins and to the highest possible standard.

Aligning the organization early on in the STO is critical due to the many different contributors during the preparation phase. Resourcing and commitment is key. The resourcing needs to be dynamic to ensure key deliverables are delivered at the right time to the required quality. Companies need to ensure all stakeholders, including department heads, the steering team and operatives that complete the activities understand the deliverables and when they’re due. Failing to do so at the outset and forgetting to follow up on them regularly is a recipe for disaster. Communicating event scope, targets, expectations and deliverables provides accountability and drives ownership, from the top of the organization to the bottom. Doing so correctly will boost morale, impacting not only the STO itself, but other parts of the daily operation.

2. Effective CAPEX Integration

Insufficient integration of capital projects is one of the main contributors to STO performance overrun. The interface between the capital project and STO teams is the most difficult to manage. Maintenance and Projects prepare in their own organizational silos and report separately, usually with different objectives and key measurements. The two groups lack a common framework and a common understanding of the value in collaboration on key issues such as roles and responsibilities, work principles and risks. It is critical that capital projects align and integrate to this process. If the high-level alignment has been done effectively during the long term planning, the detail of aligning key interfaces or milestones of both processes in a way that assures integration and collaboration is made easier. When starting preparation of the STO, having some form of ‘documented contract’ with capital projects helps align interfaces and identify where collaboration is required. This interface document defines the what, how, when, and who details of integration and documents key event tie-ins between the two parties.

3. People Drive Execution

The execution team must be aligned and focused on the end result. Engagement with the contractor is paramount. The organizational hierarchy needs to be clearly defined. Roles and responsibilities, communication lines, understanding spans of control, critical interfaces and critical path need to be transparent. However, it’s the people who carry out the execution that make the difference. Front-line leaders and those that oversee the contractors can make or break an STO. With a proactive outlook they can maximize productivity as well as encouraging safe working habits. They should also hold contractors and their peers accountable. But these are skills that need to be developed over time and aren’t acquired overnight.

People development is one of the key drivers to long-term sustainability. Having the wrong people in the wrong positions causes mistakes. Identifying the skills and training needed to be successful for all positions is crucial, particularly on the job. But remember that people don’t instantly become leaders during a 40-day STO execution – it takes time.  Instead, view it as a long-term investment, beneficial for both an STO and the long-term future of an organization.

4. Managing Scope through Reliability

Scope creep is easy to talk about in theory, but still remains difficult to achieve. It remains an important factor if an STO is to be successful. Scope management, if not managed properly, is one of the main causes of STO overrun in costs and schedule. STO’s are planned events, in general they occur to carry out legal or regulatory inspections and key preventive maintenance work that needs the plant shutdown. 60-70% of scope should be repetitive. Experience highlights that this is closer to 40-50%. Effective scope definition, risk based assessment, and a strong scope challenge prior to and after scope freeze are all prerequisites to achieving an optimal scope. STO scope is still largely determined by what was executed during past events. However at least 10-15% of scope added to a STO is down to having a poor reliability program. This is a result of either no equipment strategy, an ineffective equipment strategy, or not using the data effectively to either reduce scope requirements, or even exclude totally from the scope worklist. Therefore without an effective reliability program and use of data the opportunity to achieve optimal scope will be a challenge.

5. Getting Smarter

So what can be done to make STO targets more achievable? Think digital - and outside the box. Digital initiatives can provide a better understanding of STO scope and determine if event frequency is optimized. Integrating digital solutions into a process area can provide thousands, if not millions, of data points every day on plant equipment. This data, when analyzed, can help determine what operating equipment is functioning efficiently and what’s prime for failure. Analytics can connect the dots and help the end user understand how data points on equipment A for instance, will affect equipment B – either now or potentially in the coming months or years. As indicated STO scope is still largely determined by what was executed during past events. But people don’t typically connect the dots and understand equipment relationships. Data derived from digitalization and the analytics that follow can connect those millions of data points, which in turn can become an integral part of the scope development process.

It can also help to optimize STO frequency. A 50-day STO every five years is a more complex and risky venture than a 20-day, focused STO every three years. While regulatory scope must be executed at its predetermined frequency, an opportunity exists to use these data points to better understand how plant equipment is deteriorating. Advanced analytics can help optimize the frequency of equipment downtime. For example, understanding what is causing process throughput constraints, when they will occur, and to what extent the loss will be, is of vast importance for a process facility. Connecting these data points over time and understanding the impacts can help optimize shutdown frequency. Instead of operating at an average of 70% throughput over the last two years of a five year run cycle, it may be cost effective to schedule planned downtime every three years, and be offline for a shorter duration. This enables the unit to be back producing at a more efficient pace sooner, likely offsetting the cost of the downtime quite easily. While there are many variables to take into consideration, this is just one example of how advanced analytics and digitalization could help STOs.

Conclusion

The real question isn’t if the business impact of STOs is undervalued but rather how much it’s undervalued. It’s typically the biggest part of any maintenance budget. Failure to execute it successfully not only results in financial losses, but also loss of talent. So optimizing all facets, from people and communication to working out what needs to be maintained can have a far-reaching effect that impacts a business far beyond an event’s conclusion.

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About

John Natarelli, Senior Manager

John Natarelli, CMRP, is a Senior Manager for T.A. Cook with over two decades of consulting experience managing improvement projects within the oil, gas, and petrochemical industries in both the US and Canada. John has dedicated his career to assisting with the management and implementation of maintenance and turnaround optimization initiatives to deliver cost benefit savings for clients.

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