Owners and Contractors – Managing a Dynamic Tension – Part 1 – Owner Sites

This is part 1 of a 3 part series on business process management. Part 1 deals with business processes that drive an Owner company’s plant, mill or site. Part 2 deals with the business processes that drive a typical EPCM contractor company. Part 3 addresses ways that this knowledge can help them use the dynamic tension in their relationship, to reduce friction, so that they both win more than they do with current paradigms.

With a little help from my friends

A process plant such as a distillery, oil refinery, chemical plant, paper mill, electric utility, exists to produce a quality product safely, efficiently and at the lowest cost. To do so, the plant utilizes thousands of pieces of equipment assets. Periodically, these assets need to be maintained – just as you have to periodically change your car engine oil and your gas furnace air filter, every 3 months or so. Plant operators create work orders to track the maintenance that is needed on each equipment asset. Many plants have a number of full-time staff to perform their maintenance work. Some plants retain a primary maintenance contractor to do this work. If the workload is too high for the base maintenance crew, the plant opts to contract the work to qualified contractors to help them get the work done. A turnaround is a project, that has even more work that requires contractor help from multiple contractors simultaneously.

Why we need a Turnaround

Some equipment assets are so critical to the operating plant processes, that a complete shutdown of the process unit or, even the entire plant, is required to perform maintenance on them. For example, if a boiler has to be shut down to be maintained, all of the steam-driven processes in the plant would also be shut down. A shutdown is known as a turnaround in many industries and as an outage in others.
While the unit, or the entire plant, is shut down for the maintenance of the critical equipment assets, plant operators use this as an opportunity to perform maintenance of additional assets. They reason that, while the plant is shut down anyway, this opportunity work can be done at a lower cost than while the plant is running. This additional work results in a backlog of work that exceeds the capacity of the in-house or contracted maintenance team.
In this situation, following detailed vetting and planning of the work scope, the Supply Chain team follows the procedure to obtain additional contractors to help them complete the work during the planned turnaround.
Plants have evolved a 24 month pre-turnaround cycle to help them ensure that they are not surprised by anything that would delay the planned turnaround. A plant that is not running is not making money. It’s that simple.

A Capital Idea

Plant process are constantly being improved via processes known as capital projects. EPCM companies are contracted to help engineer, design and construct these improvements. A logistical challenge, that must be handled carefully, is the integration of the in-house maintenance teams, the turnaround teams and the capital project teams to ensure that they work seamlessly while they are all present on the site at the same time..

Feeling the Pain – Business Processes for a Plant

To understand how we can help an plant owner improve their business process management, let’s examine, at a high level, the ‘pain’ that the Plant’s team has to deal with.
The business process diagram shows a 3 level structure that has: Top Level – the plant’s Mission (like a roof for shelter), sitting on the Middle Level – a support structure of corporate processes (like the walls of a building), which sits on the Bottom Level – a foundation of corporate business procedures.
This implies that the most important piece is the foundation! If this strategy is not well modeled into the fabric of each company, the levels above will be less stable.
Each of the Business Tactical Processes, in the middle level, will deliver their benefit only if the business strategy is included in the tools that these processes employ.
Likewise the top level, which is where most maintenance and contractor people, like planners, operators, schedulers, cost analysts, work has deliverables that depend on the tactical business processes to be well-established and grounded in the business strategy.
Evidence that this grounding is not that good comes from delayed deliveries causing delayed work, poor, or non-existent, communication channels. Pretty much every unexpected or undesirable outcome can be traced to poor or incomplete application of the business processes.

What’s the current situation?

Currently, business processes do exist. They are safely stored in Sharepoint and are accessible to all team members on demand. That’s it. If a team member does not demand, or fails to do so, they simply do not know what they don’t know.
Spreadsheets are employed to provide checklist tracking. One person checks off each row in a spreadsheet, based on what someone tells them the status is in a meeting. No audit trail for the reasons for the checked tem exist. Thus very little in the way of forensic analysis can be done in the lessons learned phase of the work.
Sign-offs are collected on paper! And filing cabinets are full of signed-off documents. This is truly ‘old-school’. Today, there are better ways that cost less and provide more actionable data for analytics.

What’s holding you back?

The low cost of entry to these digital technologies is another reason to not delay in getting started on this journey. The new digital solution can co-exist beside your comfortable paper solution for as long as you need to have the warm, cosy feeling that you have not ‘thrown the baby out with the bathwater’.
Does this mean you should no longer use your trusty Microsoft suite of tools? Of course not. You will simply use them when you need to, instead of because you have to.

In Part 2 we’ll look ‘over the fence’ into how EPCM companies are organized.
In Part 3 we’ll bring these 2 worlds together to see ways that each can organize to improve their interaction with each other.

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