Scope Growth in Turnarounds

Scope growth is a critical aspect of turnaround (TA) preparation that is often acknowledged but frequently not given the necessary attention. While everyone understands the importance of managing scope growth, it tends to be overlooked. When inquiring about scope freeze practices at many sites, the response often includes a casual admission that scope is never truly frozen; it merely thaws over time.

Only a handful of places grasp the extent of their scope growth accurately. While there may be occasional goals, expectations, and key performance indicators (KPIs) related to this aspect, there is a pervasive sense that this process could be managed more effectively.

Scope growth is an inevitable occurrence, happening both between the scope freeze date and execution and through discovery during execution. The objective is to transform it into a controlled process. I firmly believe that only by making it visible and establishing goals can we restrain unchecked scope growth. Aiming for an industry average or slightly above is a reasonable starting point for this endeavor.

Depending on the level of commitment, there are several options for calculating scope growth.

For one of the largest US refiners, scope growth calculations are a dynamic process. Initially, it is computed as a percentage of the Long-Range Operation Plan (LROP) budget, then recalibrated to the approved Expenditure Request (ER) budget. Consequently, as estimates become more refined and costs better defined, the figure may vary slightly, typically decreasing when the final ER value is used, although costs may not always escalate.

The numerator in the percentage calculation represents the dollar cost sum of the Turnaround Additional Work (TAW) approved between the scope freeze and pull feed dates. This figure is recalculated and utilized moving forward, with retrospective adjustments seldom made unless there has been a substantial budget alteration.

The scope growth percentage can be expressed as follows:

Alternatively, the AP-Networks calculation involves dividing the actual cost of added scope by the sum of actual materials and Direct Field Labor (DFL) hours for the event. The DFL and material costs encompass both maintenance-related expenditures and those associated with capital projects within the turnaround’s feed-in to feed-out window.

For this calculation:

• The numerator includes direct labor, indirect labor, materials, rentals, and any other costs planned for each added scope work item.
• The denominator comprises the sum of the final DFL and material costs reported upon completion of the turnaround.

Finally:

Shell opts for calculating additional costs but also favors manhours as a preferred metric. Added manhours as the percentage of manhours at the scope freeze date.

Definition of Scope Freeze

Once goals and KPIs are established, the next crucial aspect is understanding the concept of scope freeze. It’s imperative that the entire plant aligns on this process.

An example of a possible definition is as follows: Scope freeze is considered to be in effect when:

Fixed Equipment

• Items are identified on the worklist, specifying inspection type, quantity, and repair/replacement probability.

Underground lines slated for hydro-testing are identified.

Machine

• Items are identified on the worklist, specifying inspection type, quantity, and repair/replacement probability.
• Underground lines slated for hydro-testing are identified.

Instrument

• Instruments are identified on the worklist, detailing the work scope (overhaul, service in place).

Electrical

• Permanent downhole gauge (PDG) devices are identified on the worklist.
• Long lead items for power and lighting are identified.
• Devices are listed on the worklist, specifying the work scope (overhaul, service in place).
• Tickets are identified on the worklist and documented in the database.
• Procedures are complete with electronic MOCs and issued.
• Repair plans are identified for individual BOVs.
• Chemical cleaning systems and methodologies (wet/dry) are specified.

IM

• Critical alarms and disaster valves are listed on the worklist.
• Logic systems and PDG devices are identified.
• Safety valves (HP/LP) and check valves are identified on the worklist.

Projects

• All projects in the Execute Stage.
• All issued for approval (IFA) Drawings issued.
• A preliminary Instrument Index is issued.
• A Project Execution Plan is issued.

Stakeholder Involvement

Effectively managing scope growth after the scope freeze requires the active involvement of key stakeholders, including the steering committee, TA manager, OPS manager, and Inspections. The process for approving additional work post-scope freeze must be rigorous and somewhat cumbersome. This approach serves as a catalyst for cultural change within the organization. Individuals will come to recognize the importance of submitting scope changes on time, understanding that a thorough approval process is essential for project success.

Furthermore, it’s crucial to foster an environment where the TA team feels empowered to challenge every aspect of the project without taking it personally. This mindset ensures that all decisions are rigorously evaluated and contributes to a culture of accountability and excellence.

Risk Management

Risk management is the systematic process of identifying, assessing, monitoring, and controlling risks within a project. It provides a structured approach to maximize project opportunities while minimizing threats by managing the probability of risks occurring and their associated consequences. This process is particularly crucial when dealing with unexpected discoveries during project execution. Therefore, it is imperative for the planning team to thoroughly consider all potential mitigations and contingencies before project execution commences.

Mitigation Approaches

• Preventive actions are taken when the risk is deemed imminent, or the potential outcome is too costly to bear. The following mitigation approaches can be employed:
• Rebuild: Rectify the current item to address the risk.
• Enclose with external structure: Shield the item with an external protective structure.
• Line internal structure with enclosing material: Add a protective layer to the internal structure.
• Replace: Substitute the risky element with a safer alternative.
• Re-engineer: Modify the design or structure to mitigate the risk.
• Remove / Abandon: Eliminate or discontinue the risky component.
• Use alternative sources of produced materials: Employ alternative suppliers or materials to mitigate supply chain risks.

Contingency Approaches

Corrective actions are implemented when the risk is considered manageable, given the available options. The following contingency approaches can be utilized:

• Repair: Address any issues or problems that arise promptly.
• Replace: Substitute the affected component with a functional alternative.
• Bypass / Disable: Temporarily bypass or disable the problematic feature.
• Waiver / Variance: Seek waivers or variances to mitigate regulatory risks.
• Modify operating conditions/derate: Adjust operational parameters to mitigate risks.
• Document risk and do nothing: Acknowledge the risk but opt not to take immediate action, contingent upon further developments or monitoring.

By implementing these mitigation and contingency approaches effectively, project teams can proactively manage risks and enhance the likelihood of project success.

Conclusion

In my experience, every workplace I’ve been a part of has implemented a process for managing scope changes after the Scope Freeze date. While the quality and detail of these processes varied, they were universally present. However, many organizations encounter scope growth issues because they fail to adhere to these established procedures. Often, the problem arises due to a lack of holistic understanding, as additional scope tends to trickle in gradually, seemingly inconsequential without proper cost tracking. Furthermore, there’s often a lack of comprehension regarding the implications of both added and removed scope on schedules, costs, and workloads. Addressing scope challenges post-freeze is just as crucial as before the freeze. By furnishing decision-makers with more comprehensive data and fostering a cultural shift towards cautious scope addition, we can expedite the recognition that only indispensable scope should be considered post-freeze.

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Cezary Goch

Global Implementation Lead

Project Control and TA SM

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