Turnaround, Shutdown and Outage Management: Effective Planning and Step-by-Step Execution of Planned Maintenance Operations

Index

Part 1

The Process

Turnaround overview: context and strategy

Introduction

The Turnaround in a business context

It is perhaps an obvious statement to make that, given the complexity of the technology currently employed in the design and building of manufacturing plant, the limitations of the technology used to maintain it and the ever-increasing problem of its ageing, there will always be a need for maintenance work on the physical assets of the manufacturing activity. Furthermore, in an intensely competitive global market, characterized by increasing scales of production, the effective planning and management of that maintenance activity is coming to be seen as an ever more critical business process – one which is capable of differentiating the excellent performers from those who are merely capable, and from those who are less than capable.

It is also the case that with large scale assets there will be maintenance work which can only be carried out when the plant has been taken off line, and made safe for the performance of such work (which includes, but is not limited to, critical inspection, equipment overhaul, repairs and plant modification).

The case for avoiding such interruptions to production, particularly in continuous processing plants, is well made by those responsible for production and for the profitability of the company. As a consequence, a more serious and focused effort has recently gone into the design of technologies capable of monitoring and maintaining plants on line, minimizing costly outages with all their attendant risks to safety, reliability, business and the environment.

While the quest for production without regular plant shutdown goes on and the goal remains tantalizingly out of reach, there will remain the need – world wide and for the foreseeable future – to organize and carry out significant maintenance activity in the form of plant Turnarounds on much of the existing industrial asset base. The purpose of this book is to explain, in a structured and logical manner, an approach for achieving this with minimum of risk to the enterprise.

The approach has been developed over many years by Turnaround practitioners who have managed such events, large and small, on a wide variety of assets in Europe, the USA, Africa and Asia Pacific. These practitioners have generated, at both strategic and tactical levels, a corpus of principles, routines and processes that have proved to be a sound basis for managing these complex, hazardous and time-driven activities.

While it is clear that there have been major benefits in sectors such as oil and gas, petrochemicals, chemicals and utilities, the methodology will commend itself to other areas where the degree of sophistication may be less but where the business benefits may still be considerable, i.e. where large losses may be incurred by unnecessary planned downtimes.

It is interesting to conjecture why Turnarounds have not hitherto received this level of attention, given their significant impact on many companies’ performances around the world. The answer may lie in the fact that most companies have a history of tolerating higher than necessary downtime, with outages becoming even more frequent as their plants get older, and perhaps, even now, accepting an annual shutdown as a ‘necessary evil’.

With so much revenue at stake it is probably not too surprising that it has been the process sector that has led the way out of this frame of mind by constantly striving to lengthen the intervals between Turnarounds – from the traditional twelve or twenty four months to four, five and, in some cases, as much as eight years. This strategy has of course necessitated changes in plant operating standards and inspection techniques. In the UK this has been helped by the recent changes in the Pressurized Systems Regulations which have turned from the traditional prescriptive approach to something more flexible which, while allowing the companies that operate plants to use their technical expertise when setting intervals for inspection, nevertheless places the responsibility for the safety of the plant more squarely on the shoulders of those same operating companies. The corollary to this is that the planning and preparation for Turnarounds has to be carried out ever more carefully, aligning capital programmes, scrutinizing and challenging work scope, assessing plant deterioration and its likely impact on reliability, planning stocks and safeguarding supplies to customers, and partnering with major engineering contractors specializing in plant overhaul (who are now generally the only available resource capable of carrying out the scale of activity required).

It is the potentially daunting nature of these activities and the long lead times required to manage them effectively that has given rise to this book. The following chapters therefore seek to explore firstly, the strategic issues surrounding the key questions – such as the fundamental need for Turnarounds and how they will be managed – and secondly, the more tactical issues of how to plan, prepare and execute these events.

Reliability, the fundamental driver

In order to be profitable, a company needs consistent means of production delivered by reliable operating plant. There are various definitions of reliability and many company mission statements combine the words reliability, capability, utilization and the like in seeking to capture what it is they require from those who operate and maintain the plant. The general aim of this book is to strip techniques and processes down to their simplest form to lay bare what chemists used to call the ‘active’ ingredients – those which make the difference. In keeping with this principle the simple definition of reliable plant, for the purposes of this book, is

‘a plant that is available when required and capable of performing to designed specification economically and safely for the life of the plant’

Again, in keeping with the purpose of this book, maintenance, a physical expression of asset management, is defined as

‘the sum of activities performed to protect the reliability of the plant’,

activities which will therefore help provide a consistent means of production and help generate profit.

Finally, a Turnaround is defined as

‘an engineering event during which new plant is installed, existing plant overhauled and redundant plant removed’

Because the Turnaround is a significant maintenance and engineering event a direct connection can be drawn between its successful accomplishment and the profitability of the company. There are a number of facets to this connection and a brief exploration of each will serve to set the Turnaround activity in a business context.

Cost of the event

In this context, a Turnaround impacts the business in a particular way. It is financed from company profits and, because it is typically an expensive event, it can have a major impact on those profits in the year in which it is performed. The cost of Turnarounds performed at intervals greater than one year may be spread over a number of years to lessen the apparent impact on one year’s profit, but the loss of profit remains the same. Determining the total cost of a Turnaround is, at present, a subjective exercise because differences in culture from company to company mean that different factors and, in some cases, a different logic is used to determine it. For instance, should the profit lost because a plant is not producing for the period of the Turnaround be considered as part of the Turnaround cost? If not, why not? It is only when the total true cost of the event is known that its real impact on the business can be assessed.

Drain on resources

The Turnaround is a drain on company resources and often diverts personnel from other important work. In most cases the event requires many more people than are normally employed on the plant and external resources need to be brought in.

Hazard to plant reliability

The Turnaround is a potential hazard to plant reliability. Paradoxically, although it forms a major part of the maintenance strategy – the purpose of which is to protect the reliability of the plant – it can actually diminish or destroy reliability if not properly planned, prepared and executed, due to poor decisions by managers and engineers, bad workmanship, the use of incorrect materials, or because of damage done to the plant while it is being shut down, overhauled or re-started.

Potential safety hazard

The Turnaround increases the potential for harm to people, property and the environment. Compare the normal routine on the plant to the situation which exists during the Turnaround. Normal routine is characterized by the presence of a (relatively) small, experienced team performing familiar tasks using (it is to be hoped) well defined procedures in order to make products which will be sold at a profit. The Turnaround reverses almost every characteristic of normal routine; the plant is shut down, taken apart and worked on by a large number of strangers using unfamiliar and inherently hazardous procedures and equipment. Under these circumstances the potential for accidents rises almost exponentially and must be matched by a safe system of working which minimizes the probability of loss. This adds to the cost of the Turnaround and may even be dwarfed by the consequences to the company of actual loss, in terms of monetary cost or loss of reputation.

Risk of overspend and overrun

Finally, because of the technical uncertainty inherent in the Turnaround due to the possible occurrence of unforeseen problems, there is an ever present risk of the cost estimate being exceeded, the duration of the event being extended, or both. The prudent company will therefore take this into consideration by building time and cost contingencies into the Turnaround plan (which adds to the cost) – but even these may be exceeded. The resultant extra costs and loss of revenue may be substantial.

Strategy

Taking all of the above into consideration, as well as other factors which will be dealt with in this section, it is incumbent upon the senior management of the company to create a business strategy for managing Turnarounds. The basic objective of this strategy – and this may seem an unusual perspective in a book dedicated to the management of such events – should be to eliminate maintenance Turnarounds altogether. Thereafter, if it should prove that the event is absolutely necessary, senior management should ensure that the Turnaround is aligned with maintenance objectives, production requirements and business goals.

Steering group concept

A company which is committed to getting the best value from its Turnaround programme can realize this commitment in a concrete way. The most senior manager in the company should form a steering group consisting of senior managers who take responsibility for the long-term strategy for Turnarounds. The committee will meet at regular intervals throughout the year to review current performance and formulate high-level strategy for the management of Turnaround events and the long-term Turnaround programme.

Long-term view

On any plant which has been operating for a number of years some Turnarounds will already have been performed, and in every plant covered by the imperatives of this book there will be future Turnarounds. Rather than being seen as individual events separated by a number of months or years, Turnarounds are best viewed by senior management as a sequence of linked activities (with many identical features) which are performed as part of the continuing process of asset management and are tied together, in the long term, by inclusion in senior management’s business strategy.

Consideration of past practice, present intentions and future requirements gives a well-rounded perspective and prompts the types of strategic considerations which follow. Detailed questions for the following elements are contained in Figure 1.1.

Turnaround philosophy

To be truly aligned to overall business strategy, the evolution of asset management should be driven by the constant search for ways to change from the current vogue of preventive maintenance – which is driven by technical considerations – to a philosophy of maintenance prevention, which is driven by business needs. While it may not be possible to achieve zero maintenance, the only way to find out how nearly we can approach this Utopian ideal is to question every maintenance practice to determine if it can be eliminated (by addressing the cause that generated the need for it). This being the case, it is logical to examine the largest maintenance initiatives, namely Turnarounds,