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Abstract
Purpose – The purpose of this paper is to provide a case study for professionals who are in research
and practice in maintenance engineering.
Design/methodology/approach – This is a case study. Therefore, on-site involvement in the
development of steps for maintenance projects has been included.
Findings – The case study shows that, if project management practice and involvement of external
experts and parties are allowed in the maintenance projects, then issues in maintenance projects can be
addressed more clearly and the cost and schedule for such a maintenance project can also be
optimized. The use of information technology in the whole process can be facilitated not only during
the planning phase, but also during the execution and review process.
Research limitations/implications – Implication of this study can be seen in TAM projects where
time and energy have to be spent to get the best practice. The case study will show a real life example
of TAM.
Practical implications – The paper should help one to understand the implications of starting a
turn-around maintenance project and the issues built therein. The case study highlights that
collaborative planning and execution of TAM are useful. Collaboration could be in terms of internal
parties, such as decision makers and managers, or of external parties, such as external experts and
contractors.
Originality/value – There are only a few studies in the turn-around management process. As oil
refining is an important economic process, learning of cases in one of the major oil-refining plants can
help others to emulate the process so that overall efficiency of turn-around maintenance can be
increased across the industry.
Keywords Project management, Maintenance, Chemical technology processes, Oil industry,
Communication technologies
Paper type Case study
1. Introduction
Project management (PM) techniques are applied to complete various kinds of projects
like new product development, new factory installation, production planning
development, and carrying out operational projects and maintenance of complex Journal of Quality in Maintenance
processes. Pokharel et al. (2006) have mentioned that with increasing complexity of the Engineering
Vol. 14 No. 2, 2008
activities carried out in the projects in recent years, PM has become more important in pp. 109-122
many areas that range from aerospace engineering to oil and gas industries to q Emerald Group Publishing Limited
1355-2511
outsourcing. DOI 10.1108/13552510810877638
JQME In process industry, which is the focus of this paper, PM includes the management
14,2 of new projects such as building a new plant or expansion of existing production plant.
It also includes revamping of projects such as increasing the operating capacity of
equipment for higher output and plant shutdowns for maintenance and repair. Alsyouf
(2007) mentions that maintenance approach in processing industry is of highest order
as it looks beyond reactive and preventive maintenance to totality of a business
110 operation policy, and more emphasis are given in monitoring the product quality and
the condition of equipment.
Maintenance projects, especially in chemical processing industry, take the form of
turn around maintenance (TAM). Such a maintenance process is necessary to avoid
unscheduled breakdowns which can have significant impact on the revenues. A proper
maintenance can lead to increased reliability and technical integrity that leads to a
more predictable workload in the industry and effective maintenance work planning
(Shell, 2003). A news release by Shell on 24th February, 2006 mentions of an
unscheduled failure on a conveyor resulting into a complete shutdown of Muskeg River
Mine Oil Sands in Alberta Canada (Shell.com, ‘a’. www.shell.com/home/ Framework?
siteId ¼ ca-en&FC2 ¼ &FC3 ¼ /ca-en/html/iwgen/news_and_library/press_releases/
2006/unindex/february24_mrm.html).
TAM projects may be considered as maintenance projects that can have significant
impact in the industry. TAM is essential to maintain consistent productivity,
increasing reliability, reducing maintenance costs due to corrective maintenance, and
managing resources more efficiently. Therefore, effort is needed in terms of monitoring
the performance of equipment and business processes in order to achieve stated targets
in terms of processing outputs. They can involve millions of dollars in terms of lost
revenues and cost for maintenance. A recent example by Shell shows that the length of
maintenance in Athabasca Canada required 4,000 workers in its peak, extended
beyond (planned) eight weeks and averaged to the tune of $100-125 million for
maintenance (Shell.com ‘b’, www.shell.com/home/Framework?siteId ¼ ca-en&FC2 ¼
&FC3 ¼ /ca-en/html/iwgen/news_and_library/press_releases/2006/unindex/june
12_aosp_turnaround.html). The use of manpower in various TAM projects is also
given in (Wyatt.com, www.wyattfieldservice.com/projects.htm), which shows the high
requirements of manpower in TAM projects. Therefore, due to the nature of business
and the volume of materials that are processed in a petrochemical industry, TAM costs
can have a substantial impact on the company’s business portfolio. This can have a
considerable impact on the competitive edge of the company.
Details on TAM requirements are given in Duffuaa et al. (1999) and Lenahan (1999).
Duffuaa and Daya (2004) mention that during TAM, three major types of works are
performed. First, work on those equipments which cannot be taken out of operation
unless the whole processing is shutdown. Second, work on equipment that need not be
taken out of operation. Third, the work on defects identified during the operation but
that could not be corrected while the plant is in operation. Among the three TAM
types, the first one is more critical one and requires complex planning of product
outputs, manpower, spares requirement and logistics services to get the material on
time and with the right quality and to maintain the productivity of the industry to a
desired level. The main focus in TAM is to keep maintenance costs at the lowest
possible level and the production efficiency at the highest possible levels (Tu et al.,
2001).
Petroleum and petrochemical industry in Singapore employs more than 7,000 Turn-around
people (about 2 percent of total labour force) and value addition per worker is more maintenance
than $800,000 (MTI, 2006). It contributes to about 22 percent of total output from the
manufacturing sector. It is the world’s third largest oil refining and trading centre management
behind London and Houston. There are three, with a combined capacity of more than
1.3 million barrels per day. Two of the refineries are among the largest in the world
(Wikepedia.com, http://en.wikipedia.org/wiki/List_of_oil_refineries#Singapore). 111
Therefore, even the planned shutdowns of these refineries have impact in nation’s
gross domestic output.
TAM is a multimillion dollar project and without TAM, the capacity of the refinery
can reduce significantly (www.nigeriabusinessinfo.com/nigerian-oil.htm). Further, if
TAM is not properly planned, it may be difficult to recover the productivity and
efficiency of the refinery. In countries like Singapore, TAM becomes compulsory not
only to meet internal maintenance audit requirements but also the statuary
requirements.
This paper describes PM process used in TAM in a petrochemical industry in
Singapore. The real identity of the company has been concealed to protect
confidentiality.
2. Case study
TAM was to be carried out in one of the lubricating oil producing plants in Singapore.
The capacity of the plant is about 340,000 MT/year of lubrication oils in four grades
(HVI 60, HVI 110, HVI 160B and HVI 650). The planning and management of TAM in
the past took longer periods as planning of TAM had to be done internally through
several meetings. All the requirements were developed based on paper. Further, the
maintenance was an intra company affair and therefore, there was no proper
understanding of best practices even among the various refinery units of the same
company spread around the world. This caused delays in terms of planning and
execution, thereby losing productivity of the plant beyond the expected levels.
As in any project, the involvement of management in the planning process becomes
one of the requirements in TAM process as well. The management should be fully
aware of the ground situation and should support a correct TAM process so that
business recovery can be made as fast as possible. With high petroleum price in the
market and increased margins in refining, such shutdowns could prove very costly to
the company.
In the case company, pre-planned shutdown involved high vacuum unit
(HVU3-#1100), propane de-asphalting unit (PDU-#1200), furfural extraction unit
(FEU-#1300), and MEK dewaxing unit (MDU-#1400). The management, however,
decided to add on shutdown of crude distiller plant and platformer during the same
period so that significant benefits can be obtained from the gain of gross refinery
margin (GRM). However, these additions increase the complexity and increase
manpower requirements for TAM.
114
Figure 1.
Detail costing analysis for
each maintenance item
tender package to develop their detailed plans on resources, costs and time. Contractor
was not motivated to propose alternatives to the tender package.
Since the respective departments carried out their own operations during TAM,
sharing of the best practices was limited. This typically resulted in the shutdown
co-coordinator having to “re-invent the wheel” for every TAM cycle. Due to the fact
that details on TAM were not kept centrally, learning from previous TAM was also
limited. Independent working culture resulted in a lack of communication among the
departments, thereby hindering job productivity and efficiency.
3.4 The use of information technology Turn-around
The company purchased a PM software to be used by individual departments for their maintenance
planning and operations. However, the software had limitations in terms of
electronically sharing real time information. Survey of the potential users of such a management
system revealed that only about 30 percent of the staffs were aware of the software
being used in the department and only about 10 percent of them were able to use it
properly. The main factors for not using the software were the lack of adequate 115
features and software performance in terms of report generation and real time data
sharing. The existing software also did not have secured access to data.
Therefore, based on market analysis, another software was acquired by the
company. The new software was to help in integrating data entry and monitoring real
time progress much more efficiently. In order to implement the software, enterprise
project structure (EPS) was developed. Each EPS is a structure made up of roots and
nodes. Each root in the EPS can be subdivided into many nodes (nodes represent
different levels within the specified EPS, for example, within the plant in a particular
location, nodes can represent processes, plant type or other required information). An
example of EPS developed for the case company is given in Figure 2.
Each EPS (as shown in Figure 2) can help in managing the project separately while
retaining the ability to collate and summarize data. It provides better security as
different access level can be assigned for different users. The software breakdown
organizational structure to provide a global hierarchy that represents the
responsibilities of a person assigned to certain project level under an EPS. It also
reflects the company management structure of the project. The organizational
breakdown structure (OBS) hierarchy can also be used to grant users specific access
privileges to project data and various WBS levels within the project.
After defining EPS and OBS, work breakdown structure (WBS) elements were
developed and the information on the owner (Manager) of the work element was also
added. An example of WBS developed for the TAM in the company is shown in
Figure 3.
Figure 2.
Proposed EPS
JQME WBS code is arranged with the equipment tag number. Resource requirements can be
14,2 assigned to each tag number or to each project in WBS. WBS can be shown in terms of
calendar assignments, either in terms of one shift (normal working hours) or in terms of
two or three shifts as chosen by the decision makers. For the particular TAM, 153
equipments had to be captured to develop detail plans on TAM activities. Once EPS
was setup, detailing of such a plan was not a problem with the proposed system. Detail
116 plan for each of the projects could be displayed by the software (Figure 4) for further
analysis or monitoring.
Figure 3.
Work breakdown
structure
Figure 4.
Planning layout
discussions were focussed on three different aspects – plant shutdown, engineering Turn-around
duration (works during the shutdown) and plant start-up. Engineering duration was maintenance
further divided into three parts: replacement of brick lining with stainless steel lining,
removal and installation of heat exchangers in order for the contractor to take it to its management
location for ultra high pressure jetting, and furnaces for replacing refracting materials
and flue ducts.
Fat rat workshops were focussed on discussing specific bill of materials or 117
operations, reviewing the proposed procedure and comparing that with the best
practice, developing new process (methods), if necessary, and infusing new technology.
Series of ‘fat rat’ workshops concluded on duration and budget for TAM. It was
found that the shutdown duration was overestimated by one day (as shown in Table II).
A reduction in one day of shutdown could save $60,000 in terms of base oil and $25,000
in terms of bitumen.
Figure 5.
Resource layout for heat
exchanger cleaning
JQME In the past, real time monitoring of TAM was not possible. The individual team had to
14,2 come up with their respective units’ in process plan to tackle any problem that may pop
up during the process. Such pop up process could prolong critical activities thereby
causing substantial productivity losses to the company. Therefore, the main idea was
to play safe by over estimating rather than losing face due to uncertainty in task
completion. However, when software was used, CTT members and the decision makers
118 were able to visualize real time progress. As a result, they could make quick decision
collaboratively, if required.
During TAM, some of the activities fell onto the critical path due to increased work
scope. For example, upon inspection it was found that a furnace required renewal of its
tubes and therefore, it fell in the critical path. CTT members had to pull the resource to
complete the work to control critical path. The data given in Table III shows that there
were no problems during the shutdown, therefore, the estimation during the fat-rat
workshop was correct. However, estimation of timings for engineering tasks and start
up were lower than actual days due to throughput variances. It should be noted that
the proposed timing, which was developed collaboratively by various managers and
the contractor was ‘much less’ than 40-45 days used in earlier similar instances.
Analysis showed that, in earlier instances, as budget was the main constraint, the
number of activities to be carried out had to fit within the budget. However, the actual
expenditure used to be somewhere between 15-20 percent more than the allocated
budget.
In the new approach, productivity of the plant was the main concern rather than the
budget, therefore, all required activities were planned first and budget were itemized
for each of those activities. Workshops were used to discuss budgets and schedules.
During TAM, new critical maintenance items were discovered. Additional budget
was necessary to cater to this need. Analysis further shows additional costs were
mainly due to mechanical and civil costs. Had there been proper documentation of
these items from earlier TAM, such items could have been budgeted thoroughly. Other
work activities were pretty much within the budget. The overall expenditure was
about $8.4 million, an excess of about 13 percent. Shell (2003) identifies that a correctly
used documentation and analysis can have significant savings in cost and turn around
time.
1 HVU3 15/04/YY, 00:00 hrs 17/05/YY, 22:30 hrs 33.9 Within target Over budget
2 PDU 15/04/YY, 00:00 hrs 20/05/YY, 03:30 hrs 35.1 Topping up C3 was slow Over budget
3 FEU 16/04/YY, 00:00 hrs 19/05/YY, 03:30 hrs 33.1 Within target Over budget
4 MDU 15/04/YY, 01:30 hrs 20/05/YY, 16:30 hrs 35.6 Problem with K1402 start-up Over budget
5 HOS 17/04/YY, 00:00 hrs 20/05/YY, 16.30 hrs 33.6 Within target Within budget
Note: HOS = Hot oil station
Turn-around
management
maintenance
121
Figure 6.
Streamlining TAM
by information tools so that the planning period and TAM execution period
could be shortened and best practices could be implemented quickly for any
TAM process. TAM process has to be a systems process, iteratively altering
between various TAM planning phases. The use of information technology here
was useful to reduce TAM cycle by about three months (from 15 to 12 months)
and increase the visibility of information during TAM execution in order to make
quick decision on resource allocation. In the earlier system, any problem during
the execution could have required additional days. Although planning phase was
reduced substantially, TAM execution could be kept under control with better
information visibility and fast decision making.
The discussion above shows that TAM can be streamlined by following project
management techniques. This process can be facilitated by the use of internet or web
based information technology so that information could be shared for discussion on
each of the maintenance issue. Access to real time information visibility can also help
in monitoring TAM process thereby increasing the efficiency of TAM. Learning from a
TAM should be documented and best practices should be shared so that overall
efficient of maintenance projects can be increased across the industry.
JQME References
14,2 Alsyouf, I. (2007), “The role of maintenance in improving companies’ productivity and
profitability”, International Journal of Production Economics, Vol. 105, pp. 70-8.
Duffuaa, S.O. and Daya, M.A.B. (2004), “Turnaround maintenance in petrochemical industry:
practices and suggested improvements”, Journal of Quality in Maintenance Engineering,
Vol. 10 No. 3, pp. 184-90.
122 Duffuaa, S.O., Raouf, A. and Campbell, J. (1999), Maintenance Planning and Control: Modelling
and Analysis, Wiley, New York, NY.
Lenahan, T. (1999), Turnaround Management, Butterworth-Heinemann, Oxford.
Ministry of Trade and Industry (MTI) (2006), Economic Survey of Singapore, 2005, available at:
http://app.mti.gov.sg/data/article/1962/doc/ESS_2005Ann_Full Report.pdf
Pokharel, S., Yeo, K.T. and Wang, T.Y. (2006), “Value of project management in high tech and
manufacturing operations”, Journal of Chinese Institute of Industrial Engineers, Vol. 23
No. 6, pp. 443-8.
Shell (2003), MERIT – The Holistic Approach to Maintenance and Reliability, Shell Global
Solutions International, Singapore, available at: www.shell.com/static/globalsolutions-en/
downloads/industries/gas_and_lng/corporate_brochures/global_solutions_corporate_
profile_brochure.pdf
Tu, P.Y.L., Yam, R., Tse, P. and Sun, A.O.W. (2001), “An integrated maintenance management
system for an advanced manufacturing company”, International Journal of Advanced
Manufacturing Technology, Vol. 17, pp. 692-703.
Waeyenbergh, G. and Pintelon, L. (2004), “Maintenance concept development: a case study”,
International Journal of Production Economics, Vol. 89, pp. 395-405.
Further reading
Project Management Institute (PMI) (2004), A Guide to the Project Management Body of
Knowledge, 3rd ed., Project Management Institute, Newtown Square, PA.
Corresponding author
Shaligram Pokharel can be contacted at: Shaligram@pmail.ntu.edu.sg