Optimize Maintenance Operations to Reduce Operating Costs

by Guy Barlow, Oracle

The impact of maintenance on the bottom line has never been greater. By skimping on maintenance, you run the risk of increased downtime and decreased revenue generation.

Millions of dollars and the success or failure of critical projects are on the line every time a skilled craftsman lays a wrench on an important piece of machinery.

Similarly, maintenance is tasked with keeping equipment running longer and more efficiently as the combination of an aging infrastructure and many new plants coming online challenge a diminishing maintenance work force.

As a result, maintenance and reliability teams are being asked to do more with less.

Labor represents most maintenance expenses and is naturally a target for efficiency improvements.

In an emergency or reactive type of maintenance organization, craft workers are usually only 20 to 40 percent productive, according to “Physical Asset Management for the Executive,” a study by Howard Penrose.

The basic problem is that too much time is spent waiting for instructions, traveling to the job, waiting for parts to be delivered or finding the right tools.

A good enterprise project portfolio management (EPPM) solution, however, can help improve key financial and operational results such as return on assets (ROA), operating margins and maintenance costs by helping keep vital equipment operating, reducing shutdown and turnaround time, matching resources to the workload and improving maintenance crew productivity.

Ensuring that qualified resources are available in the right numbers and at the right time can help keep maintenance projects on track and avoid unnecessary rework and overtime expenses.

Companywide visibility of project-level information enables effective management of enterprise-level metrics as well as the development of best practices across divisions and groups for executives and project teams.

Routine and Complex Maintenance Challenges

Maintenance challenges typically arise in two main areas: daily, or routine, maintenance and more complex plant and facility shutdowns, turnarounds and outages.

Routine maintenance involves many tasks that typically are not complex but can present issues in scheduling, allocation and tracking of resources.

There might be a 4- to 8-week maintenance cycle that covers everything from performing routine maintenance on machinery to trimming vegetation around power lines. The challenge is making certain that qualified resources are available and allocating them to the right job at the right time to ensure more productive, efficient and safer use of human resources.

Generating the necessary work orders is also a vital routine maintenance function and is well-suited to enterprise asset management (EAM) solutions.

Yet, EAM solutions typically fall short in resource management and visibility.

Specifically, schedulers can assign jobs easily to crews but often do not have an easy way to determine whether crews can complete jobs on deadline.

Balancing and leveling resources across multiple plants or divisions becomes a challenge. As a result, utilities that rely exclusively on EAM tools often have difficulty forecasting and managing resources resulting in increased costs and delayed projects.

On the other hand, EPPM software can improve scheduling and resource allocation dramatically for asset-intensive companies such as electric utilities by providing a clear, high-level picture of the project status and the ability to drill down to any desired level of detail.

Moreover, the software can scale to handle anything from the smallest projects to the entire preventive maintenance and shutdown and turnaround requirements of large, multinational corporations.

These solutions provide the tools management needs to maximize the positive impact of the maintenance function on a utility’s bottom line.

For example, a U.S. electric and natural gas distributor serving nearly 3.5 million customers loses revenue when it takes a generating unit out of service for major maintenance.

It needed to minimize risk and financial exposure during the outage process and plan 3,000 different tasks and coordinate 900 workers, most of whom were contractors.

By standardizing on an EPPM solution, the utility was able to create a project management process that enables internal and contract resources to coordinate and execute major maintenance programs better.

It was able to generate one master schedule, even though it relied largely on external contractors.

The EPPM system integrates contractors’ schedules, reducing errors, delays and costs and improving project status visibility from the boardroom to the field.

As a result, the company realized a 10 percent reduction in outage time and recouped revenue that positively impacted the bottom line.

Large or complex turnaround or shutdown projects often involve thousands—sometimes tens of thousands—of activities that must be completed within a tight, fixed time window. For example, thousands of internal and contractor workers might come together to overhaul a boiler and retrofit a scrubber in a power plant.

Every day the plant is offline, millions of dollars of revenue are lost. Resource utilization must be leveled out so the number of people in each specialty remains optimized, but resource leveling alone only begins to address the enterprise scheduling challenge.

A large utility, for example, might have multiple major maintenance projects underway at any time and potentially thousands of day-to-day preventive maintenance activities in combination with several new construction projects or plant expansions, as well.

Profitability depends on being able to schedule and deploy resources in the most efficient manner throughout all these activities, between different turnaround projects, between preventive maintenance and turnarounds, from plant to plant, product line to product line or division to division.

If a turnaround in one plant is completed ahead of schedule at the cost of diverting resources that force a shutdown in production of a highly profitable product, then profitability as a whole will suffer.

Traditional project management tools are limited and don’t provide the necessary visibility to allocate resources properly.

For example, taking a generating unit out of service for major maintenance means lost revenue for an electric utility. One such company decided to standardize on an EPPM solution to minimize risk and financial exposure during the outage process, plan 3,000 tasks and coordinate 900 workers. The company created an enterprise project management process that enabled internal and contract resources to better coordinate and execute major maintenance progress.

As a result, the company reduced outage time 10 percent, which positively impacted the bottom line.

The integration of contractor schedules helped reduce errors, delays and cost and extended project status visibility from the field to the boardroom.

An Enterprise View of Maintenance Projects

EPPM provides a complete solution for improving the efficiency of routine and shutdown and turnaround maintenance operations and for managing the risk of maintenance activities by providing visibility into the tools needed to manage projects and resources at the crew, area, division and enterprise levels.

An enterprise view of resources enables a command center to coordinate teams around the globe, making it possible, for example, to spot an imbalance of work between areas so crews can be reassigned from one project to another.

At the same time, managers can track resource requirements enterprisewide to determine the overall balance between the workload and available staff.

This all drives toward a heightened ability to deliver better financial results for the company.

Projects in all areas of a utility can be measured against one another to determine which are delivering the anticipated results and which ones are falling short. For example:

  • Resource demands, time and cost estimates, cash flow requirements and organizational constraints all can be measured and forecasted enterprisewide while retaining the ability to drill down to any required level of detail.
  • Cost, schedule and earned value thresholds can be set to generate issues automatically when projects exceed specified limits.
  • Negative trends can be identified early so necessary course corrections can be made by performing what-if simulations to determine the schedule and cost exposure of project risks.

Additional Benefits of EPPM Solutions

In addition, EPPM solutions integrate resource, scheduling, materials and financial information between enterprise resource planning (ERP) and EAM solutions, enabling easier and more accurate project, portfolio, materials and resource management across the enterprise.

By leveraging user-friendly EPPM applications integrated with ERP, plant asset, maintenance and materials management solutions, organizations reduce project risks and meet critical delivery dates by effectively forecasting and managing costs, schedules, materials and resources across the utility or at a single site.

Risk is inherent in maintenance projects, especially turnaround and shutdown operations where delays generate revenue shortfalls.

Traditional approaches to risk management put managers into the role of firefighters who race around responding to problems.

A new generation of risk management solutions, however, integrates with EPPM solutions to analyze fully the risk sensitivity of the project so the impact of risks are understood.

The effects of alternate mitigation strategies can be evaluated at any stage of the project, ensuring the project is proactively managed to avoid the most damaging risks.

This big-picture view combined with the ability to drill down to the details when needed provides management with the tools they need to optimize maintenance activities to deliver the highest levels of availability and reliability at the lowest possible cost.

Author

Guy Barlow is industry strategist for power, energy and process industries for Oracle’s Primavera Global Business Unit. He has more than 15 years of experience working with and marketing to global enterprises in the utilities, oil and gas and chemicals industries.

 

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