When downturns occur, organizations make cuts to survive by eradicating projects, reducing headcount and deferring investments to minimize costs. These operational decisions are often at the long-term expense of asset performance, remarked Dan Kemp, site leader, engineering, maintenance & reliability, Ascend Performance Materials at the 7th Chem, Petrochem & Refinery Asset Management forum.
With these decisions, instability within operations occur, creating a ripple effect that is felt throughout the industry. Operators have to build long-term stability and sustainability into their management strategies to weather this cyclical business in a key performance and profitable way.
Each individual can make a business decision for the betterment of all, Kemp said, by focusing on three metrics, even if standards aren’t in place within the organization. These metrics are: safety, environmental standards, and profits.
By focusing on safety, one can effectively manage assets and resources which in turn gives operators the social license to operate.
Kemp added that aging assets and declining efficiencies are an increasing problem within infrastructure, yet, reliability is an issue. He defined reliability as holding oneself accountable to recognize when products/assets/instruments have expired and need to be replaced vs making it work for one more life cycle.
As assets continue to age, the risk of equipment failure increases.
Other points he stressed on safety is fatigue management and ergonomics within maintenance and operations. He asked for management to define how long is too long to work in a day and how much is too much overtime? Each operator has to create solutions for today’s world before an incident that is detrimental occurs. A downturn forces the focus to shift from profits to operational performance. However, failure to improve performance, during high-profit time frames, could have a lasting effect on the company’s growth and reliability.
While many companies slash manpower and cut budgets within the organization during downturns, the direct impact of this scenario heightens his points on safety. By developing and implementing company policies that are valued and well-received by employees, company performance doesn’t lag, profits flat line, instead of decreasing, and safety is kept intact.
The last metric discussed was environmental practices which if not regarded as important can have an adverse effect on the social license to operate. While companies often times have to make swift decisions while being mindful of appropriate and sustainable health and safety operations, only then can improvements be made to the operations and business that will lead to safety through reliability.
