In Part I (September 2016, pg. 25), I discussed several proven management concepts that must never be abandoned when conducting turnarounds. Part II will address the remainder of those concepts. It is important to understand these concepts are interrelated, with failings in one component flowing through the remainder, ultimately impacting turnaround performance.
Resources
Apply the right resources and apply them early. Far too often I see fresh-faced young engineers or maintenance foremen blessed with the title “turnaround manager.” A bad turnaround can be a career killer for these unsuspecting folks. The old adage, “Past performance is the best predictor of future success,” couldn’t be more pertinent than on turnarounds. The selection criteria for a turnaround manager should include questions like, “How many turnarounds have you managed?” and “How many of those turnarounds were successful?” There is no substitute for experience. It is also crucially important to clearly define roles and responsibilities for the turnaround team. It is just as important to define what their roles are not as what their roles are. As an example, it should not be the role of a unit operator to supervise the execution contractor. All too often during turnarounds everyone in the plant organization suddenly becomes a “supervisor.” If you don’t handle resources right, you are planning to fail.
Project controls
Again, I could write volumes on this topic but will limit my comments. While some organizations may do a fair job of planning and scheduling, very few have mastered turnaround estimating, cost engineering, budgeting, earned value management, norms management, benchmarking, etc. Project controls affect immediate turnaround performance, but they also establish the key performance indicators and foundation necessary for continuous improvement. The turnaround estimating and budgeting processes are where most organizations miss the boat and invariably grossly underestimate the cost of the turnaround or, just as bad, overestimate it and then spend far more than they should. If you don’t do project controls well, you are planning to fail.
Contractor selection
By the time contractor selection comes around, the turnaround performance die is cast based upon how well the above activities have been accomplished. However, most owners’ contractor selection processes are also flawed in that they place primary importance upon hourly labor costs and labor markups. The first considerations should be the quality and experience of the proposed team, with particular emphasis on the contractor project manager and his direct reports. Again, questions like, “How many successful turnarounds have you performed?” and “How large is your craft and supervisor following?” should be asked in an interview. References should be checked for the company and the proposed team. The contractor’s team must be given an opportunity to review and buy into the turnaround schedule and budget. Years ago, there was a handful of turnaround contractors that could always be counted on to deliver. This isn’t so today. If you perform contractor selection poorly, you are planning to fail.
Summary
Declining turnaround performance is quite possibly the most out-of-control component of industry costs today. It impacts profit margins, individual careers and contractor survival. Too many are looking for that “silver bullet” or magic program that will give them a successful turnaround. They’ll never find it. The real key to successful turnarounds is strong management applying the best practices and management concepts that have been around for decades. Turnarounds can be managed successfully each and every time. It requires planning to succeed.
For more information, email David.Mathews@tgeis.com or visit www.tgeis.com.