We’ve all witnessed the declining trend in turnaround performance in recent years. Industry experts suggest over 70 percent of all turnarounds are failures and 40 percent can be classified as “train wrecks.” For many years, the industry expectation was for steady, incremental improvements in performance. In recent years, we’ve seen turnarounds so catastrophic they impacted company bottom lines, destroyed individual careers and bankrupted contractors.
Virtually all these failures can be traced to an abandonment of proven management concepts that have been accepted for many years. Some of those concepts are:
• Early preparation.
• Turnaround charter.
• Scoping process.
• Front-end loading (FEL) management.
• Resources.
• Project controls.
• Contractor selection.
It is important to understand these concepts are interrelated, with failings in one component flowing through the remainder, ultimately impacting turnaround performance.
Early preparation
It’s been an accepted tenet of successful turnaround management for many years to start the scoping and planning process at least 8-12 months prior to turnaround start, with perhaps 18 months required on large turnarounds. Note I said “required” and not just “desired.” A key early activity is the development of a written turnaround execution plan (TEP) that defines every aspect of the process. I see many organizations starting the FEL process as late as three months prior to the turnaround. That’s a recipe for disaster and almost certainly dooms a turnaround to fail.
Turnaround charter
A turnaround charter is vitally important for defining and communicating the philosophy, strategy and purpose of the turnaround. It’s just as important to define what the turnaround is not as to define what it is. It should not be a clearinghouse for an excessive maintenance backlog, activities that can be performed “on the run” or an opportunity to do “wish list” activities. Alignment and communication are important here. Everyone in the organization should clearly understand the turnaround charter. The turnaround charter sets the foundation for all activities that follow.
Scoping process
The No. 1 cause of cost and schedule overruns on turnarounds is scope creep or failure to control scope. More than any other component, the effectiveness of the scoping process will determine the success or failure of the turnaround. Excellent planning and scheduling will never overcome poor scoping. Scope should be defined early and truly “frozen” six months prior to the turnaround. There should be a written scoping process, a scoping manager, scoping meetings, scoping report, change order process, etc.
FEL management
We’ve all seen the charts that show 80 percent of the ability to influence performance on turnarounds and projects lies in the months in advance of turnaround execution. I say it’s more like 90 percent. It’s advisable in the conceptual phase to assign an FEL manager and immediately develop a comprehensive FEL schedule. We used to call this the “plan for the plan,” which encompasses every single activity that must happen prior to the turnaround for it to be successful. The turnaround FEL schedule is even more important than the execution schedule. Weekly meetings should be held months in advance of the turnaround to review the status of scoping, planning, scheduling, budgeting, materials, safety, etc. These meetings become the primary tool for communication and alignment.
In Part II, which will run in the upcoming October issue, I will discuss the best practices for resources, project controls and contractor selection when executing turnarounds.
For more information, email David.Mathews@tgeis.com or visit www.tgeis.com.
