Wednesday, 16 January 2013

Post-Operational Readiness Project (Continuous Improvement)

With the growing world, the mega projects keep coming. With mega projects comes the need for certainty to the investor. In the world of plant maintenance, the certainty comes from Operational Readiness Project. To some, it is a common phase of a project, to some parts of the world, it is an alien that they have never heard before, that includes experienced multinational EPCM contractors.

If you are deciding on the OPEX of a project, and your EPC or EPCM contractor gives you a cost projection that says, oh, it's 3-5% of capital cost. Ask them where that figure comes from, chances are they'll say it's an estimates from historical data. I can also tell you the figure is INCORRECT. Why? It is because your operating cost depends on the quality of your equipment too! Not in linear, or able to be defined by any mathematical algorithm model! It has to be painstakingly compiled, equipment by equipment, building up to the complete plant! A simplified example, a Japanese car OPEX will be very different from a German car OPEX. They have different service intervals, differing coping ability in operating bandwidth & context, difference in material cost, different in complexity. In some cases, higher capital upfront is justifiable! This has to be evaluated on a case by case basis in details.

Planning and budgeting an Operational Readiness to get your master data up to standard, and having all your equipment registered is essential to every process plant. Once up and running, the OEM recommended maintenance plan has to be put in. No, the process does not end here. You need your reliability team to continually manage the plant changes, and it has to update the master data to reflect the changes occur over-time. As the equipment fails in service, reliability engineers need to assess and evaluate your maintenance task to optimize the time and cost for improvement in reliability, increase in production and reduction in cost. This is an on-going task that cannot be neglected.

From experience, a neglected Master Data can cost upwards of $10 million dollars or more to clean up in a brownfield project and a trailing $1 million dollars a year of labour to keep it clean as they go. If a dedicated person acting as the gate-keeper since day 1 at a price of $150,000 a year, imagine how much less money needs to be re-invested to maintain the original business case projected reliability figures!

A lesson for the Executives out there, Operational Readiness does not guarantee you the reliability outcome. Reliability is a culture and an on-going continuous process. Invest in your reliability team!

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