1. Why Turnarounds Fail
to meet management expectations
David Mathews
TGE Industrial Services
Cell: 281-507-9386
Office: 281-867-9949
2. TURNAROUND FACTS
ACCORDING TO CII STUDY
Over 80% of turnarounds
experience cost overruns
Approximately 50% of turnarounds
suffer schedule slippages
90% report scope growth
from 10% to 50%
Unplanned additions cost 30% to
50% more than planned work
Critical part method scheduling is
implemented on less than
20% of all turnarounds
Cost control and forecasting is
implemented on less than 20% of
all turnarounds
Turnaround staff experiences
minimal training in modern
management concepts
Over 90% of critique
recommendations are never
implemented
MOST TURNAROUNDS FAIL TO MEET
MANAGEMENT EXPECTATIONS
3. Why Do Turnarounds Fail?
Failure to start early enough
Failure to treat as projects
Failure to apply Best Practices
Failure to assign professional
turnaround management team
Failure to control scope
4. Why Do Turnarounds Succeed?
– TURNAROUNDS CAN BE MANAGED
SUCCESSFULLY
– SCHEDULES CAN BE MINIMIZED
– COSTS CAN BE REDUCED
MANY BY 10% TO 30%!
– 1st
QUARTILE PERFORMERS DO IT
– WHAT DO THEY DO?
5. WHAT DO 1ST
QUARTILE
PERFORMERS DO?
– START EARLY
– RECOGNIZE AND MANAGE TURNAROUNDS AS PROJECTS
– IMPLEMENT BEST PRACTICES
– STRONG MANAGEMENT SPONSORSHIP
– TURNAROUND PHILOSOPHY – DEFINITION & PURPOSE
– RECOGNIZE AND MANAGE THE TURNAROUND PROCESS
– STRONG EMPHASIS ON FEL
– COMMITMENT TO PROJECT CONTROLS
– APPLY THE RIGHT MANAGEMENT RESOURCES
– APPLY ENOUGH MANAGEMENT RESOURCES
– AGGRESSIVELY MANAGE AND CONTROL SCOPE
– AGGRESSIVELY MANAGE AND CONTROL PERFORMANCE
– BENCHMARK FOR CONTINUOUS IMPROVEMENT
8. Ability to Influence
Performance
HighHigh
Ability toAbility to
InfluenceInfluence
PerformancePerformance
Start Complete
LowLow
HighHigh
ProjectProject
ExpendituresExpenditures
LowLow
Time
Scoping
Planning &
Scheduling
Turnaround
Start-up
Conceptual
Planning
Pre-T/A
Problems Here:
Are the result of
Failings Here:
Not enough Welders? Then didn’t
adequately plan the welding work!
80% Impact! 20% Impact!
9. TURNAROUND PROCESS
- ABILITY TO INFLUENCE PERFORMANCE
Conceptual Development
TIME
Months
90%
80%
70%
60%
Scope Development
Pre-Turnaround
Turnaround
Execution
&
Control
Post-Turnaround
50%
40%
30%
20%
10%
C
O
S
T
Detailed Planning & Scheduling
Contracting Strategy
Buy Long
Lead Items
Resource
Leveling
Contractor
Selection
I
N
F
L
U
E
N
C
E
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
Form Turnaround
Team
10. Start Early
The Planning Process on most
turnarounds should begin 12 to 18
months prior to Turnaround start.
Pre T/A activities should be scheduled
and tracked just as aggressively as the
turnaround activities.
Virtually ALL Failures during
Turnaround Execution can be traced to
a failing in the Pre Turnaround Process.
12. 05/23/16
Turnaround Mission,
Objectives & Customer
Establish clear, objective, written mission and
objective
Return the unit to “as designed” condition
Implement approved capital projects
The “customer” of a turnaround team should
be the unit, the asset or the corporation, as
opposed to the traditional view that
operations or some other group is the
customer.
14. Project Management Approach
-Application of CII Best Practices
Alignment
Benchmarking and
metrics
Change management
Constructability
Design effectiveness
Disputes prevention &
resolution
Implementation of
products
Materials management
Partnering
Planning for startup
Pre-project planning
Quality management
Team building
Zero accidents
techniques
15. Additional Best Practices for
Turnarounds
Defined turnaround
“purpose”
– What it is
– What it is not
Strong management support
Robust scoping process
Aggressive change
management
Start early – with adequate
resources
Documented project
execution plan
Documented roles &
responsibilities
Develop Alliances
Archive historical data
Build templates by
equipment
Emphasis on project controls
All activities scheduled
Pre-turnaround schedule –
and accountability!
Involve all parties – early –
including contractors
Conduct schedule reviews
Conduct risk analysis
Conduct readiness reviews
Documented pre-turnaround
milestone schedule
Capital & maintenance fully
integrated
Lessons learned
18. Scope
#1 Cause of cost over runs on projects?
– SCOPE CREEP
#1 Cause of cost over runs on
turnarounds?
– SCOPE CREEP!
19. Scoping Process
Scoping process aimed at eliminating all non-essential, non-
turnaround scope items.
Scoping team comprised of engineers, designers, operations
personnel and others to assess the condition of unit equipment
and to identify gaps between current condition and as designed
condition.
Apply a comprehensive scope quantification, control and change
process during the course of turnaround planning & execution.
Plant turnaround scoping processes are often ineffective and can
represent the primary source of cost and schedule over runs.
Loop-holes in the scoping process can allow for significant scope
growth after the scope freeze.
21. 05/23/16
Turnaround Project Controls
Implement a comprehensive project controls
system to include estimating, planning, cost
engineering, CPM scheduling, software etc.
Develop standard estimates, work packages
and schedules to be utilized across multiple
sites.
Most turnaround project controls are
fragmented, ineffective and do not effectively
utilize modern project controls software and
methodology.
22. Resource Leveling
Allows work to be done by fewer people over
the entire time.
Avoids hiring, screening and processing
people for a short period.
Supports Supervision Buy-In
Maximizes Use of Tools and Equipment
Promotes Better Use of Management Support
Minimizes the “infrastructure” required
26. Risk Analysis (Primavera Risk)
Provides accurate probability of success.
Identifies potential problem areas.
Basis for critical management decisions.
Develops list of key milestones.
Establishes best and worst case scenarios for
both cost and schedule.
Increases confidence in schedule/budget.
Supports subcontracting evaluations and
decisions.
27. Turnaround Cost Control
Earned Value Management System
Earned vs. Actual – Productivity Factor
Cost Variance
Schedule Variance
Real Time Information
The Objective should be “Decision Quality
Information” not necessarily Accounting Level
of Accuracy
29. Procurement and Sub-Contractors
Turnaround Procurement strategy to include
early procurement management involvement
in the FEL stage.
Develop contractor selection process aligned
with performance objectives of turnaround.
Standardization of materials, services,
procedures, specifications; and multi site
vendor/sub-contractor alliances.
Turnaround procurement is often reactionary,
fragmented and sub-optimized. Procurement
decisions are often made at a management
level, and a late date that is not conducive to
producing low cost solutions.
31. Execution Methods – Example Areas
Productivity Management
Safety Audits & Management
Permit Management Process
Schedule & Cost Control
– Status each shift
– Daily Status Meetings & Reports
Small Tools & Mobile Equipment
Work Hours
QA/QC Process
Flange Management Procedure (Leak Free
Start-up)
33. Safety
Implement aggressive Safety
Management program in FEL stage.
Incorporate Safety considerations in all
phases of scoping, planning, scheduling
& execution.
Control execution to plan to avoid
unplanned work.
34. Turnaround Critique
“Lessons Learned” Meeting
Identify “Well Dones” & Opportunities for
Improvement
Produce Final Job Report
Serves as Basis for Continuous Improvement
Implement “Lessons Learned” on Future
Turnaround
36. How DoTurnarounds Succeed?
Start Early
Treat Turnarounds as projects
Apply Best Practices
Assign Professional Turnaround
Management
Control Scope
37. 05/23/16
OPPORTUNITIES FOR
TURNAROUND IMPROVEMENT
Contractors and
Manpower:
Just the Tip of the
Iceberg
-Scope Control/Optimization
-Program Management
-Project Controls
-Procurement &
Subcontracts
-Contractor Selection
-Best Practices
-Productive Planning
-Safety Management
-Materials Management
-Resource Leveling
-Schedule Optimization
-Sub Contractor Management
-Execution Methods
-Turnaround Critique
The Real Opportunities:
38. ADDITIONAL INFORMATION
The following slides are excerpts from
another presentation that details the
different stages of turnarounds and
some of the activities that should be
executed at each stage.
39. Conceptual Development Activities
Identify Turnaround Sponsor
Form Management Team and define responsibilities.
Define turnaround philosophy and goals.
Review previous turnaround history.
Review lessons learned from past turnarounds.
Establish major work items, both expense and
capital.
Develop scope criteria based on the philosophy.
Develop contractor strategy.
Create turnaround preparation milestone schedule
Develop cost control and tracking process.
40. Conceptual Development Deliverables
Turnaround Execution Plan
Preliminary work list.
Basic cost estimates (±30%).
Estimated duration.
Turnaround preparation milestone schedule.
Manpower forecast for turnaround planning
resources.
Organization structure.
Quality assurance, quality-control requirements.
Completion of this stage can be 12-15 months before
starting the next turnaround.
41. Scope Development – Sources
Work order system.
Capital works.
Compliance items.
HazOp study outputs.
Operational requirements.
Process engineering requirements.
Environmental, safety, and health needs.
Maintenance requirements.
Maintainability, reliability, and constructability reviews.
Resolution of conflicting needs.
Long lead-time material procurement.
42. Scope Development - Deliverables
Work development deliverables include:
Integrated plan (schedule, equipment, and
resources).
Preliminary critical path schedule.
Refined budget estimate (±20%).
Updated preliminary and approved work list.
Long lead-time materials ordered.
Critical lift plans.
Additional work approval process.
Work scope frozen.
This stage should be completed 12-15 months before
the shutdown.
43. Detailed Planning & Scheduling- Activites
Final work list.
Work Packages.
Final plan for equipment cleaning and personnel entry.
Contracting plan in place and all major contracts let.
Critical-path schedule.
Detailed execution plans.
Detailed safety plan.
Additional work approval process.
Turnover of all capital work.
Completion of materials procurement plan.
Final estimate.
Definition of format and frequency of performance and progress
reports.
44. Detailed Planning & Scheduling - Deliverables
Integrated execution plan (finalized on critical
and sub-critical work).
Final budget estimates (±10%).
Final work list.
“What if” scenarios.
Lifting plans.
Mobile equipment requirements.
Detailed shop loading plans.
Risk Assessments.
complete this detailed planning stage 4-6
months before the turnaround.
45. Pre-Turnaround Activities
Safety plan implementation.
Operations training.
Maintenance and contractor training and orientation.
Team building.
Environmental, safety, and management of change (MOC)
requirement review.
Beginning the prefabrication work.
Beginning the on-site pre-shutdown work.
Detail of shutdown and unit clean-out sequences.
Prepare temporary connections.
Identify blind locations and hang the blinds.
Install temporary offices, stores, and tool houses.
Mobilize the execution team.
Cost tracking and reporting.
Detailed execution plan.
Shutdown and clean-out plan.
Work performance.
Turnovers.
Start-up plan.
46. Pre-Turnaround - Deliverables
Final execution plan.
Completion of pre-shutdown work.
Training the execution team.
Developed turnaround organization charts.
Creation of a reporting plan.
Completion of field mobilization.
Finalized shutdown meeting procedures.
Beginning of communications-alignment
meetings.
47. Turnaround Execution - Activities
Unit and equipment shutdown and preparation for entry.
Daily turnaround meetings.
Schedule reviews and updates.
Daily cost tracking and reporting.
Documenting MOC requirements.
Additional work review and processing.
Tracking additional work and scope changes.
Ensuring that records reflect as-found conditions.
Documenting all repairs.
Documenting all inspections.
Prestart-up safety review.
48. Turnaround Execution - Deliverables
Turnaround executed per the plan and
Schedule.
Objectives met.
Contingency plans reassessed as
needed.
Prestart-up safety review.
Start-up on schedule.
Release to operations.
49. Post Turnaround - Activities
Demobilization of contractors.
Post-turnaround unit and lay-down area clean up.
Resolution and disposal of excess material.
Repair and inspection history reports.
Updating the turnaround historical database.
Post-turnaround MOC requirements.
Freezing the turnaround accounts.
Issuing the final cost report.
Lessons learned and recommendations for future
turnarounds.
Preparing the final turnaround report.
50. Post Turnaround - Deliverables
Post-turnaround unit and lay-down area clean
up.
Planned run length.
Improvement opportunities.
Final reports.
Final audit report of performance and
adherence to the work process.
This stage should be completed 1-2 months
after the turnaround.
Editor's Notes
Exercise - 38 people from the audience stand up to use as an example during talking point.
Primavera P3 or P3E – Current industry standard.
Critical Path Reviews
Schedule Reviews
Risk Analysis
Resource Leveling.
Rescheduling During Turnaround.
