Are you planning to deploy a major asset maintenance program or replace major equipment?
A planned shutdown of operations may be required to maintain, inspect, replace, or upgrade equipment, or to connect new plant units.
If you have been involved in a major plant shutdown, it’s very likely that it didn’t go as planned.
40% of shutdowns result in cost or time overruns of more than 30%.
Cost overruns may be partly caused by the complexity of this type of project.
Shutting down operations in the industrial sector is one of the most complex projects to manage. Thousands of people are involved for a period of up to one, two, or even three years… and that doesn’t even include the time necessary to strategic planning.
The financial stakes and the loss of revenue involved in shutting down plant operations for several weeks also put considerable pressure on staff, especially on the managers responsible for the project.
Consider the 60-day shutdown of operations at the Jean-Gaulin refinery, which supply 70% of Quebec total demand for petroleum products.
In total, 1,400 workers were required seven days a week, 24 hours a day, during a two-month period.
“We had been planning this shutdown for almost two years. There is a specific sequence that must be followed. When we shut down the refinery, we have to depressurize our equipment using our flare. We can’t depressurize them all at once. We must respect the flare’s depressurization capacities while protecting our equipment,” says Martine Péloquin, vice-president and general manager of the refinery.
Major shutdowns are planned in several phases and involve many deliverables depending on the phase, the nature of the operations, the equipment affected, and the size of the event, such as:
- developing a work breakdown structure;
- assessing the scope of work across hundreds of lots and thousands of activities;
- creating an estimate of the efforts per trade and the costs associated with each budget item;
- detailed planning of each activity involved in the work; and
- writing a daily report to record the earned value (integrating planning, estimation, and cost control).
The quality of each deliverable will have a major impact on the success of the planned shutdown.
Since 2012, we have been involved in the planning of several major shutdowns for industrial customers.
Our expert consultants have assisted our clients in planning, estimating, and controlling the costs of their projects. We have identified aspects of planned shutdowns that can be optimized to limit their impacts and ensure that deadlines and costs are met.
Five elements to be taken into account to significantly increase the performance of a shutdown
To ensure the success of your next shutdown, we suggest that you adopt the approach relating to “marginal gains”.
The best demonstration of this method is undoubtedly that of the British National Cycling Team. In 2003, the national team’s management hired Dave Brailsford as Performance Director. He was faced with a significant challenge— Britain had only won one Olympic medal in cycling since 1908. In 110 years of the Tour de France, no British cyclist had won the event.
Five years after Brailsford’s arrival, the British cycling team dominated the road and track cycling events at the 2008 Beijing Olympics, winning 60% of the gold medals. Four years later, at the London Olympics, the British team broke nine Olympic and seven world records.
That same year, Bradley Wiggins became the first British cyclist to win the Tour de France. The following year, his teammate Chris Froome won the race. Froome won it again in 2015, 2016, and 2017, giving the British team five Tour de France victories in six years.
According to coach Dave Brailsford, these successes can be attributed to the approach of marginal gains.
His philosophy: break down all of the elements of a race and improve each one by 1%. The cumulative gains from each 1% improvement is enormous.
Here are some examples of the small changes that led to 1% performance gains:
- Bicycle seats were redesigned to make them more comfortable
- Alcohol was rubbed on the tires to increase grip
- Different fabrics were tested in a wind tunnel to determine the lightest and most aerodynamic uniforms
- A surgeon taught cyclists how to wash their hands to reduce the risk of catching a virus
- The inside of the team truck was painted white to identify small particles of dust that could undermine bike maintenance
Do you want to increase the performance of your next shutdown? Focus on specific elements and make small improvements. Together, they’ll make a big difference.
1. Ensure the safety of your workers
The majority of project clients have established a “zero tolerance” objective for occupational health and safety (OHS). For that reason, in addition to respecting budgets, schedules and the scope of work, avoiding or limiting the number of incidents and accidents is one of the main objectives of major industrial projects.
This objective directly affects the planning of a shutdown. For example, the time frame for completing each task (and worker productivity in general) must first take into account the organization’s safety measures and the time required to perform Job Safety Analyses (JSAs). The activities must be performed as efficiently as possible while maintaining high safety standards.
Some safety standards can directly affect costs without impacting deadlines (New standard on personal protective equipment – PPE) while others can have an impact on deadlines AND costs (JSAs).
How can you make gains during your next shutdown?
Precisely evaluate the time and money spent on safe work practices. While unavoidable, this data is often overlooked in the planning phase. The human resources involved in planning a shutdown must be familiar with the Safety Code for the construction industry.
In addition, some of our clients have rigorous OHS processes that require workers to perform JSAs. These analyses are carried out before each shift, as well as following any change in the initial working conditions.
These procedures need to be accounted for—they have a cost, but they can prevent potentially fatal accidents.
2. Identify all stakeholders during planning
In our experience, planning should involve the cooperation of the operations, process, engineering, construction, and inspection teams. The latter determine the scope of the work and the strategy for carrying out the project.
This scope is developed in a detailed breakdown structure, organized by elements like unit, equipment, and trade. As the scope is defined, other stakeholders (such as contractors, specialized consultants, suppliers, and specialists) become involved in quantifying task duration, labour hours, and direct costs.
The role of project control officers is to consolidate and verify all this information, determine the critical path of the schedule and develop an integrated project control system (schedule, costs and change management) that will allow efficient and effective project monitoring (computer system, coding, etc.) and reporting.
According to Gilles Morel, Director of Fuels at the Canadian Fuels Association, “The planning part is often the most critical part of a successful [planned shutdown]. This is when the scope is defined, engineering drawings are developed and finalized, and when equipment procurement, pre-fabrication and site preparation take place.”
How can you make gains during your next shutdown?
To improve your performance during the planning stage, be sure to make a complete list of anyone who may be affected by the shutdown.
It’s important to involve every one of these people right from the beginning of planning to make sure your assessment is as accurate as possible. For example, involving everyone ensures that the necessary materials and resources will be available at the right time at each stage of the shutdown, saving valuable minutes or hours at each stage of the project.
In addition to the people responsible for operations directly affected by the outage, it’s important to have the cooperation of project managers and inspection, engineering, and planning staff.
Major plant shutdowns often turn into multidisciplinary projects involving many trades: boilermakers, pipe fitters, electricians, instrumentation technicians, insulation specialists, millwrights, etc.
A meticulous analysis will allow you to properly assess the impact on human resources. For example, the workers’ learning curves will be severely compressed. Supervisory staff and engineers will also have to work together, in close proximity to the site workers.
The various suppliers of the specialized equipment to be assessed, replaced or upgraded during the shutdown should also cooperate during the planning phase. This will allow the procedures to follow the manufacturers’ recommendations, which will ensure that equipment is operated safely.
Finally, the assessment conducted during the planning phase can help minimize unforeseen events during execution. By involving the company’s extended staff in the detailed planning, it’s possible to identify and minimize risks that could affect the project.
3. Proactively identify risks, their impacts, and ways to mitigate them
As mentioned above, planning is essential to identify, prevent, and minimize risks. That’s why it’s important to approach risk management proactively.
How can you make gains during your next shutdown?
A simple but important way to improve the shutdown’s performance is to assess the risks it may pose to other areas of the plant or refinery. For example, congestion in areas where work is being done may slow or even prevent operations in other areas that aren’t directly affected by the shutdown.
It’s also important to identify any potential elements or risks that may affect all shifts, overtime, or site efficiency. A single additional day can have major financial impacts, often amounting to hundreds of thousands of dollars.
4. Use the right data analysis tools
Meeting deadlines is always one of the critical aspects of a shutdown. Activities must be planned to optimize downtime so that the company can accomplish as many tasks as possible that can only be performed during the shutdown.
Any work that’s necessary for the shutdown but can be performed before it begins should be planned upstream and completed before the unit or factory is shut down. In other words, it’s important to thoroughly analyze the order in which activities are performed.
This is a complex task, since a significant amount of labour hours must be taken into account for a short period of time. To do this, a link must be made between estimation, planning, and cost control.
How can you make gains during your next shutdown?
Depending on the project phase, the frequency of monitoring activities for planned shutdowns can vary. At the beginning of the project, key indicators are generally monitored monthly. However, this quickly drops to weekly in the months before the shutdown, and then to daily during the shutdown itself.
Some IT tools can be developed to help monitor indicators and analyze data. For example, our team has developed a tool for shutdown projects that combines data generated daily during the shutdown in real time to present a dashboard of key indicators.
Some key indicators, such as earned value, are an essential part of successful project monitoring. Without going into too much detail, compiling the actual hours coded in detail according to the work breakdown structure (WBS) versus planned hours produces the cost performance index (CPI). This allows us to assess actual versus expected productivity. Compiling planned hours versus actual hours also makes it possible to measure the schedule performance index (SPI), and therefore the actual progress of the work.
It’s also important to measure costs per labour hour and future hour forecasts to determine hour forecasts. This type of control is done on direct work, but also on indirect costs. If poorly or un-controlled, these indirect costs can be a deciding factor in whether or not project budgets are respected.
Although simple in theory, applying these concepts so that decision-makers can have access to a high-quality table during a shutdown is a complex task. For that reason, it’s important to set up effective monitoring systems.
5. Improve the accuracy of cost estimates
The accuracy and quality of planning have a major impact on the success of a shutdown.
While planning is essential, its relevance depends heavily on its accuracy. Even something as simple as improving units of measurement can have a significant impact. For example, operations should be planned on an hourly, not daily, basis.
In addition, the estimated maximum number of hours to complete “shutdown work” in terms of constructability, strategy and supervision, is not always clearly stated in the planning phase. It is therefore not unusual for costs to be underestimated.
How can you make gains during your next shutdown?
It’s important to make sure the many documents used during the shutdown are accurate. The estimate’s margin of error will be greatly influenced by the accuracy of all sources of information: plans, data sheets, sketches, specifications, etc.
Conclusion
To improve your performance during your next shutdown, evaluate the small improvements you can make in the following areas:
- Worker safety
- Stakeholder collaboration
- Risk identification
- Optimization of the time window
- Estimate accuracy
