STO Execution Excellence ??

Heavy Industry Shutdown | Turnaround | Outage Performance ??

Let's begin with the spend—I know, right, it's always about the money; I get it, but it does keep the business world turning, and it does create millions of jobs, directly, and indirectly, worldwide. Unfortunately, it also eats profits if you're not paying attention??, which is neither good for business nor, for the job opportunities. Let's investigate.

Whoever optimizes scope, controls the budget, and manages the cost of heavy industry STO events, without compromising the asset owner's business drivers, will be generously rewarded!

Here are some key budget and cost definitions for your consideration regarding cost performance on heavy industry shutdowns, turnarounds, and outages. Use these to gain a better understanding of where the money goes, how budgets are created and controlled, and how costs are managed. Note: you can't go wrong if you focus on the money, without compromising safety, or brand recognition:

• Spend: Asset owners spend money for two reasons: 1) Risk Mitigation, and 2) Return on Investment (both require a direct investment and substantial indirect/overhead burn).
• Invest: An AFE (Authorization for Expenditure) is issued by the AMT (Asset Management Team) to either mitigate risk, e.g., Shutdown/Turnaround event, Outage campaign, or safety-related issue, or, to improve business performance, e.g., increase product throughput, create new marketable products, reduce transportation costs, and so on.
• Burn: This is where it gets ugly. No one wants to burn money, right! But the fact is, we burn money when we're not investing. In other words, if the physical effort required by the direct workforce is not performing, not turning wrenches, as it were, and commodities/materials are not being installed, we're basically burning money (as indirect costs). Simultaneously, we're fanning the flames with excessive overhead and costly float burn.

Many asset owners are technology rich, but data poor. The value of ones-and-zeros in budget control and cost management for heavy industry STO events cannot be overstated!

??Here's a tool you can download from www.iapscc.com if you're registered as a Sustaining Member. The iCAT? (indirect Cost Adjustment Table?) ??

• Direct: Associated with the investment in physical effort expended to operate, maintain, or construct physical production assets. Referred to as DFL (Direct Field Labor), we classify direct as any work that disrupts the availability of a physical production asset, or any work that creates physical asset availability, i.e., new construction and commissioning,
• Indirect: Associated with the support required by direct resources to execute physical work, e.g., cranes, supervision, admin, safety, inspection, scaffolding, and so on. ??The ratio of indirect vs. direct is important; significant cost-saving opportunities exist when you minimize this ratio, without compromising safety or quality ??
• Overhead: Refers to the cost of keeping the lights on, as it were. For example, temporary office trailers, janitorial, power, taxes, permits, and a host of operating/non-operating expenses required to support a STO event.

• Brand Recognition: Asset owners are very protective of their brand, and for good reason; shareholders love to invest in a recognized, profitable brand, and nowhere can this brand be protected more, enhanced, even, than thought the effective and efficient execution of a scheduled STO event!

How much can you save on your next STO event? Join us in Baton Rouge, LA in October to find out! Register today for our unique 3-Day STO Execution Excellence Workshop in Baton Rouge, LA | October 15-17, 2024

—EJ (Ted) Lister | Founder & Chairman | iAPSCC? international Association of Planners, Schedulers, and Cost Controllers.