AXIS GLOBAL CONSULTING SERVICES, LLC

2010 NPRA Maintenance & Reliability Conference; Technical Paper

2010-06-01T09:17:00.002-05:00

the link above should take you to the technical paper I presented at this years NPRA Maintenance & Reliability Conference. If this link doesn't work for you leave me a comment or e-mail me and I will gladly forward it to you.

Petrochemical Fire / Explosion Emergency Response: Project Management Techniques

2010-04-29T11:20:00.004-05:00

Over the next few months I will publish a series of articles discussing how to respond to a petrochemical fire / explosion .. based on my experience in fire rebuilds as a Project Manager I have developed some thoughts on how to approach the organization, scope development and execution of these "ultra fast-track" projects. One thing I learned is that there is no manual on how to manage a fire rebuild project, but hopefully some of my ideas may help.

I will break down the discussion into four areas;

1. Project Development
2. Project Management
3. Project Objectives
4. Scope Development
5. Project Controls

This entry will discuss the first two topics .... as always, these are just my opinions.

Fire Rebuild Project Development

In normal operations, an organization will fully develop a project through a well defined and thought out exercise, risks have been identified early, plans have been made to mitigate these risks and the PMT has a clear expectation for the project and final post-project condition.

However, in the unfortunate event of an explosion and fire, these operating “norms” for project development become extremely compressed. It would be an understatement to categorize the compression as “fast track.” More accurately, the recovery effort will be conducted at a “killing pace” where all phases of project planning and preparation are overlapped in such as manner that the boundaries between them are not visible.

In the initial stages of a fire rebuild interests are often divergent; the initial focus is on unit decontamination, remediation of environmental concerns, unit isolation and gas-freeing to make the unit safe for entry.

Focus then transfers to the incident investigation, Insurers needs for potential subrogation activities as well as the concerns of Local, State and Federal authorities. Each party has their own list of priorities, area of responsibility, interests to protect and expectations for the project.

These competing interests are a major distraction to the Owner organization’s efforts in developing the project with any sense of normalcy; such as identifying project requirements, establishing clear and achievable objectives while balancing the competing demands for quality, scope, time and cost.

Eventually the interests become aligned over time as the number of stakeholders decrease to the Owner organization and the Insurer. At this time the project requirements become simplified; to proceed safely, to rebuild a reliable unit and to rebuild the unit as quickly and efficiently as possible. Typically the Owner will align all other objectives towards these goals. Even though the Insurer announces that they will be aligned to these goals, their focus is typically limited to demands for scope, cost and schedule control.

A normal project life cycle would allow for a disciplined phase approach that would ensure alignment prior to proceeding to the next phase of the project. However, the natural time line for balancing competing demands and conflict resolution becomes too time consuming for a fire rebuild project. Thus creating a competition between the costs for the repair of property damage and mitigating business interruption.

Further compounding this complexity is that the cost profile for a fire rebuild project is exponentially more aggressive than a “normal” project and the time window of influence is much narrower.

Although there is no single “best” way to manage a project, all projects should apply project management skills and process to achieve the desired performance. Just because the project is "fast track" and someone believes a particular process is not required doesn’t mean that it is not neccesary. It is the responsibility of the Project Management Team to address every process and ensure that all required processes are implemented as well as the level of implementation for each process.

This aspect is especially true in the case of a fire rebuild effort; the decisions made earliest in the project will have the greatest impact on the final outcome of the project. The window for these decisions is critically narrow due to the time compression of the project life cycle.

As the organization progresses through the various phases of the fire rebuild categories of risk are identified and are either eliminated or plans are made to mitigate the risks. The ability of the organization to affect any impact on these risks is in direct proportion to the influence; risk management capabilities decrease as the timeline progresses.

Missing this window of influence is usually manifested in cost and schedule creep.

Typical “fast track” projects are a method of implementation where construction and design are overlapped to expedite completion of the project. It is not only an activity that is done fast, but more than that, refers to an overlap on stages of design and / or construction before the preceding stage is complete. Fast tracking of projects has become popular in the industry and can bring advantages such as;

1. Realize investment opportunities more quickly
2. Reduced time for implementation
3. Lower cost
4. Reduced burden on Owners by single source contracting for EPC

On the other hand, fast track projects have inherent challenges;

1. Timeline is compressed for procedural approval
2. Transfer of information, feedback and evaluation of documents
3. Requires strict cash flow, prompt payment and extensive capital resources
4. Requires strong and experienced manpower resources, especially in project management
5. Influence window is severely reduced
6. Higher risk profile for scope, cost and schedule creep

Fast track projects are also inherently unstable because construction has begun before engineering and design is complete. The risk profile for increased cost due to design delays, errors, omissions, scope growth through discovery is extremely high.

In the case of a fire rebuild project, executed at an ultra-fast track basis (where even the normal luxury of planning for a normal fast-track project is absent), the organization does not have the luxury of time to focus upon a fully developed, risk free plan that satisfied the interests of all stakeholders.

The Owner and Insurer organizations must understand that a fire rebuild is no normal operating condition and they will not be able to fully develop the project through a well defined exercise; where all risks had been identified early, plans had been made to mitigate these risks and all stakeholders have a clear expectation for the project and final post-project condition.

The Owner and Insurer organizations must accept the known risks and potential risks of an ultra-fast track fire rebuild project and make preparations to establish processes that would mitigate these risks.

The project must have clearly stated objectives, widely published and understood and all decisions must be balanced against the objectives.

Project Management

There are a series industry accepted best practices, tools, techniques, methodologies, resources and procedures used to manage a project. Most organizations consolidate these sets of process in to a unified, integrated comprehensive plan called the Project Execution Plan, Project Management Plan, Project Management System, or some other similar designation. For this report we will refer to the set of process as the Project Management Plan (PMP).

The PMP dictates how the project will be managed and serves as an ongoing aid in effectively managing a project to completion; it defines how the project will be executed, monitored, controlled and finalized. The PMT agrees that this is the set of guiding principles for the control and maintenance of the project.

The PMP documents the collective input of the Stakeholders and in part includes;

• The various project management process selected by the PMT
• Level of Implementation of each selected process
• Descriptions of the tools and techniques used to accomplish each process and interactions with other process
• How the work will be executed to meet the project objectives
• How changes will be monitored and controlled

With a fire rebuild, the Project Management Team must develop a plan that will balance the demands of scope, time, cost, quality, resources and risk. The Owner and Insurer should develop a joint project management plan (Loss Management Plan) which identified the critical areas to address and protocols for tracking and reporting.

While the Owner should rely on as much in-house processes as possible, they may have to rely on their main mechanical contractor to augment their processes and procedures for the fire rebuild effort.

This is a perfectly reasonable approach and reliance upon contractor management capabilities is actually a very prudent category to include in contractor selection. Many Owner organizations will contract these skill sets but maintain management oversight. The Owner will soon realize that they do not have enough resources within their in-house organization with the requisite experience to solely manage an effort of this size and chose to rely on their main mechanical contractor to provide a significant portion of project management tools for the rebuild project with the Owner continuing to maintain management oversight.

Most experienced project managers know that there is no single “best” way to manage a project as each applies their own knowledge, experience, skills and processes in different order and degrees of rigor to achieve project goals. However, this is not to say that there aren’t certain categories of project management principles that should be taken into account for all projects regardless of size, complexity or timeframe for execution, such as;

1. What is the objective of this project?
2. How will we develop the scope of work to meet this objective?
3. Once we know our scope of work, how will we design, execute, manage, monitor and control the project work?
4. What processes will we use to identify, track and control changes to the project?
5. How will we report the project?

These processes must be decided upon and implemented early in the project. The expectations for timing, level of accuracy, processes, roles, responsibilities, etc must be widely communicated and understood.

My next post will discuss how to develop the project objectives and conduct fire rebuild scope development.

Internal or External Management?

2010-02-10T07:32:00.002-06:00

How do Owners organizations strike a balance of managing from within as much as possible without external service providers?

I see this debate quite often in the industry and I discuss this topic quite often with my clients.

The economic climate of the past ten years or so has forced the global industrial community to become increasingly specialized and Owners organizations have become very lean (reduced internal headcount and increased specialization).

Because of this, industrial knowledge in TAR and Capital Project management have migrated out of the Owners organization and now Owners are faced with two main issues; they no longer posses the specialized knowledge & expertise or they have an unhealthy reliance on external contractors.

In my opinion, the Owner has to strike a balance between internal headcount and external support, there isn’t a simple formula to figure out what is correct, as each organization is unique in their needs.

The primary drivers are the size/complexity of the work load as compare to the capabilities of the in-house organization. Owners should always seek to migrate knowledge and subject matter expertise into their organization in order to protect their interests on smaller/routine work and use external resources when the workload or complexity of the work overloads the in-house organization. The key is to recognize (honestly) what the organization is capable of managing efficiently and effectively.

This situation has become critical in the recent economic condition; many Owners organizations have cut back on the utilization of external resources in order to reduce costs. However, we have found that because of the lack of “in-house” specialized knowledge the Owners have been unable to properly execute their strategy … resulting in increased costs, reduced profitability, etc.

I also firmly believe that the more proficient our clients become in our industry, the farther we can take them into the detailed intricacies of our expertise. Thereby allowing our clients to gain more substantial improvements though a higher power of knowledge.

Contracting Stratgey

2009-08-24T12:03:00.009-05:00

Well I have to apologize to those of you following this blog .. things have been a little hectic this summer and I have been remiss in my commitment to post a new subject every month. Between a son graduating high school, summer vacations, conferences and business commitments I have fallen behind.

One of the major activities for this summer was our sponsorship of the Marcus-Evans Turnaround / Shutdown Management Conference held in early August in New Orleans. It was a productive conference from our view point, the speakers were very informed on their subject matter, what I especially liked about the conference were two things; 1.) attendees were 90% from Owners organizations and 2.) the setting was very intimate in that the setting allowed for an excellent exchange of thoughts and ideas.

As a sponsor we were allowed to present a "white paper" and with Marcus-Evans we thought that a presentation on contracting strategies for turnarounds would be appropriate for the conference. So this months blog will be to post the presentation for everyone to view and question.

Please do remember that discussions are welcome here .. so post away!!

TAR Scope Development Process

2009-06-17T10:18:00.003-05:00

The past few months we have focused on some high level activities to prepare for the strategic development of a turnaround, the turnaround management system and some typical factors of a turnaround ... this month I thought we could discuss how do we actually develop the "right" scope of work that is in harmony with our strategic business plan.

The thing or "key" point is this ..... the turnaround is an investment with an expected return on that investment. This is radical thinking, you wouldn't think so, but it is.

Most organization pull up the past work list from the previous turnaround, then look at open turnaround priority work orders in their CMMS, then spend a month or so polling the organization to open new TAR work orders for items needing repair. After struggling to get information from each organization, they finally set their scope as frozen and begin planning.

What is the problem with this? Well for one, there is no organization of the scope development around the organizations principles for reliability, availability and maintainability. The scope is preferential, un-focused, late in development, provides a band-aide approach and does nothing to improve the facilities long term systemic issues.

We think that the industry needs to change their way of thinking by putting focus, energy, and commitment to the scope development process and develop the TAR scope of work that ensures facility reliability, availability and maintainability. Every scope item must be justified against the strategic business plan and calculated ROI for executing the work.

The flow chart below illustrates the process

The starting point for scope development is to develop the premise by which the turnaround scope of work will be developed. The premise document should be developed by the T/A Steering Team and is intended to be widely distributed and supported by facility management. It should be reviewed with the T/A Core Team during their initial formation.

The premise should be developed utilizing the following major categories:
1. Background & Strategy

Why is the turnaround necessary?
Position in the long range business strategy

2. Premises / Basis

Units to be considered for inclusion in the subject turnaround, premised for a safe, reliable and regulatory compliant operation. Desired run length post turnaround to the next turnaround timeframe with no unplanned outages.
Utility systems to be included (i.e. steam, air, fuel gas, electrical, cooling water, etc.) that should be premised for a safe, reliable and regulatory compliant operation. Desired run length to the next turnaround timeframe with no unplanned outages.
NOTE: Utilities typically require full plant turnarounds as they are not usually independent systems. Utilities turnarounds normally require longer intervals between T/A's
Possible units or specific scope items deferred that would normally be included in the turnaround.

3. Scope Development Basis

Scope will be developed via a risk assessment methodology, defined by an evaluation of probability and consequence of an item in relation to the premise used for the unit being reviewed.
The evaluation will be performed by the T/A Core Team.
T/A work items can be categorized into “Tiers” for analysis and review (contact us for more info, this is addressed in our TAR Manual, section 2.7.3.1 Budget Segmentation)

4. Cost & Duration

Expected cost based on the long range business plan, basis by which any ROI will be justified
Expected duration based on the long range business plan. Serves as the basis by which added scope, high risk scope and the critical path will be analyzed against.

5. Sensitivities & Risk

A brief description of the sensitivities and risks to successful execution and subsequent operation post turnaround
The premise should include the basis by which the Mechanical integrity related work will be developed

Management Systems

2009-05-13T10:32:00.005-05:00

What are Management Systems?
Management (development) systems are processes designed to improve decision-making and execution of investment initiatives by fostering better planning, collaboration and communication. Use of these guidelines will help the Team to select opportunities well and execute with excellence, therefore increasing the probability of business success.

What is the Purpose of a Management System?
To Improve Probability of Business Success. The ability to improve the probability of business success depends on the application of “positive” influence early in the project / turnaround life cycle.

Increase Influence & Decrease Investment
Followers of this blog have seen the chart above, this chart, however shows the influence time frame for TAR's and Projects. Influence is greatest in the beginning of any business initiative; staffing & expenditures are low. As time progress; the ability to influence a positive outcome decrease and expenditures increase.

How to Increase Influence?
Develop a Management Systems that;

Establish organizational responsibilities for the Team
Provide a basis of understanding for Team Members
Improve the effectiveness of the Team's performance
Provides guidelines and procedures for uniform preparation
Serves as an Aid to the preparation to improve execution efficiency

Expected Results of Management Systems?
A well developed Management System will improve Team influence by;

Placing decision making to the front end of development
Fostering communications & collaboration between Groups
Improving decision making & execution
Maximizing probability of success
Reducing execution costs & timeframe
Improving the availability of products for sale

Typical Factors of a Turnaround

2009-04-11T11:53:00.004-05:00

This post is a simple presentation of the factors typically associated with turnarounds ...

Not treated as an investment with expected return on the investment
The frequency and duration of T/A’s are traditionally “set in stone”
Execution is arbitrarily adjusted to meet predetermined duration
No incentive to do in less time
Why do we need detailed plans when we know what we have to do?
2-3 day delays are considered normal
Work list grows during the turnaround (TA) execution
Turnaround work costs 2-3 times more than routine
Lost Profit Opportunities are realized but not accounted for
Mechanical availability decreases
Most serious accidents occur during TAs
Usually loosely defined scope
Scope is dynamic. Many changes occur as inspections are made.
Planning and scheduling cannot be finalized until the scope is approved, generally near the shutdown date.
Turnaround work requires extensive permitting every shift.
Manpower staffing requirements change during execution due to scope fluctuations (from discovery work).
Turnaround schedules must be updated every shift, daily.
Turnarounds measure time in hours or shifts.
Turnaround scope is flexible. Usually a large percentage of work can be postponed to a later window of opportunity if necessary.
Turnaround schedules are compressed. There may be little or no opportunity to correct the critical path by accelerating the schedule.

What are the characteristics of a Pacesetter Turnarounds?

All surprises are eliminated so that anything that CAN go wrong has been predicted, accounted for and plans implemented to eliminate the risk

Spend 7-10% of total man-hours planning
Improved communication
Lowest possible cost
Shortest possible downtime
Higher morale
Higher productivity
Anticipating problems
Lower emotional drain

Systems are in place to instill contractor buy-in and delivery of the Turnaround objectives

Effective contracts can save up to 20% of turnaround costs

Operations / Production spend as much time planning for their critical path activities to ensure the facility is handed over and started up flawlessly

Eliminate historical 2-3 day delays (LPO per day x lost time)

Results of a Pacesetter Turnaround?

Improve decision making
Select the right opportunities
Improve the overall T/A outcome
Utilize identical processes
Archive turnaround
Continual optimization
Reduce the costs of turnarounds.
Decrease the lost volume of products
Increase mechanical availability
Increased intervals between turnarounds

Turnaround Organization Development

2009-03-11T08:07:00.011-05:00

The following is an abbreviated excerpt from the Axis Global Turnaround Planning & Execution Process (TPEP). Documents are copy right materials and are not to be reproduced or distributed without the written permission of Axis Global Consulting Services, LLC.

Axis Global Consulting Services, LLC

1100 Poydras, Suite 1300

New Orleans, LA 70163

Overview

Most turnaround problems typically stem from two distinct causes; the first being inappropriate assignment of roles & responsibilities and the second is an inadequate exchange of information between participants. These two factors combine to inhibit the collaborative effort required to meet the complex challenge of managing efficient turnarounds.

The key elements to providing continuity, consistency and alignment is the formation of a dedicated management organization. This entry will discuss the recommended best practices for the formation of the Turnaround Management Organization.

The key elements to success are the formation of a T/A Steering Team and a cross-functional T/A Core Team. The Steering Team is responsible for maintaining high-level oversight of the T/A efforts in accordance to the long range strategy.

Below is a sample Steering Team organization chart (generic)

The Core Team is responsible for the detailed planning and implementation of the established strategy. The Core Team must work together as the scope, schedule and execution plan come together.

The functions represented on the Team provide checks and balances as the full scope and plan is assembled. The end result is a Team plan, not a sum of several parts.

The Core Team members are responsible for prioritizing and bringing their departmental action items generated during the planning phases to the respective parties in their department. They should report and follow-up on these actions items.

The Core Team must have a functional leader or facilitator. This person schedules the Team meetings, keeps the master scope, schedules, etc., and develops the agenda for meetings (with presenters) for updates to the Steering Committee. This functional leader is normally the Turnaround Manager.

Below is a sample Core Team organization chart (generic)

Strategic Development

2009-01-29T12:44:00.014-06:00

Strategic development focuses on selecting the “right” opportunities early enough in the process to ensure that success options are leveraged. The graph below is a simplified illustration of the relationship between influence and investment; influence is never greater than during the strategy phase, as time progresses the baility to influence decreases and investment (cost) increases.

Influence is greatest in the beginning of any improvement initiative; expenditures are low. As time progress; the ability to influence a positive outcome decrease and expenditures proportionately increase.

Axis Global works with their clients to review their strategy for their projects, turnarounds or maintenance practices. The purpose of the strategic review is to assess and optimize existing strategies and assure that it is consistent with the business objectives.

Axis Global helps their clients increase their ability to influence a positive outcome to their improvement initiatives by focusing on developing the right strategy. Resulting in less expenditures over the life cycle of the initiative.

Strategy’s must be target oriented, consistent with the business objectives and have clearly defined short term / attainable goals that are also sustainable. These goals are implemented via change management within the organization. The long term systemic goals will be achieved as a product of system implementation.

To illustrate, consider the development of a turnaround strategy either at the facility level or across multiple business units.

Turnaround strategy development is a structured process designed to investigate and identify the reasons and drivers for TAR’s based on;

Business drivers for shutdowns and TAs
Mechanical integrity drivers for TAs
Process / operations reasons (i.e. catalyst life, fouling)
Legislative and corporate requirement
Capital investment opportunities
Interactions with other units and plants

The facility must consider the sources for input during strategy development in order to account for all perspectives that influence the outcome. Alignment to the strategy is crucial to success; most business initiatives fail due to inadequate alignment within and across departmental boundaries.

The strategy should consider each sources output that defines the complexity and drivers (reasons) for the initiative. This system is cyclical and should be readdressed each turnaround cycle.

In the end, the strategy should deliver and provide;

Increased Mechanical Availability and Optimized Run-Life
Decreased Lost Profit Opportunities
Ensured value for the work that is carried out
Aid to the preparation in order to improve execution efficiency

Our Company

2009-01-29T10:21:00.007-06:00

Axis Global Consulting Services, LLC was founded in 2007 in order to provide in depth and hands on consulting for the management and control of maintenance, turnaround and capital projects for the refining and petrochemical industries. Axis Global has a unique suite of systematic process and tools that have been developed to improve their clients efficiency in choosing the right strategies and tactical measures to increase productivity and increase profitability.

Axis Global helps their clients leverage or enhance their own capabilities by offering the following services;

Maintenance Management & Execution
TAR Strategic Development, Planning and Execution
Scope Development and RBWS
Capital Project FEL Planning
Conceptual and Detailed Estimating
Risk & Readiness Assessment
Project Controls

Axis Global provides professional expertise to implement and manage these services along with their systems, tools, process and procedures as part of the Owners management organization. Axis Global can provide this either in a consulting format or as an integrated member of their organization through the provision of;

TAR Managers
Project Managers
Project Controls Managers
Senior Planners & Schedulers
Senior Cost Engineers
Cost Analysts
Contract Administrators
IT Specialists
Coordinators

Welcome

2009-01-29T10:00:00.003-06:00

Well here we go ... the first official entry into the Axis Global blog.

I wanted to start this so that I can share experiences, thoughts and really any general thought that comes into my mind about the industry we serve. Kind of informal but hopefully educating.

I welcome feedback and discussion ... no one has all the answers, silver bullet, panacea or choose the cliche' of your choice. So I don't claim to have all the answers but I do have the wisdom and experience to investigate and come up with the best answer for any particular situation.

So here we go!!