Successful Outage Management Lessons Learned From Global Generation Leaders

Successful Outage
Management
Lessons Learned
from Global Energy Leaders

Geoff Edelman, Director
Global Energy Group
Kepner-Tregoe Inc.
Copyright © 2008 Kepner-Tregoe, Inc. All Rights Reserved 1

Presentation Overview – The Outage Process!

• How to manage outages from the strategic position

• How to focus the outage planning and implementation
process to achieve best results,

• How to troubleshoot the outage project plan to
prevent potential problems,

• How to manage emergent issues through interim and
adaptive actions, and

• How to evaluate completed outages to capture
lessons learned, for the improvement of future
outages

130-20-P262807 Copyright © 2007 Kepner-Tregoe, Inc. All Rights Reserved 2

Signs That Your Outage
Management Process Needs Improvement

• Arguments over the allocation of resources across
competing assets

• Conflicts over performance, cost, and time drivers

• Scope creep and cost creep

• Crisis management dominates

• Too many unanticipated problems arise

• Repeat the same problems outage after outage


The Strategic Role of Outages

Typical energy sector outages:
• Consume up to 50% of annual maintenance budgets
• Employ 2-10 people full time all year
• Contribute 1-12 interruptions (stops) per year
• Increase the normal workforce by 2 to 3 times
• Contribute 20-50% of overall plant unavailability
• May involve new/untested technology
• Attract attention of boards and shareholders


What is Strategy?

“The set of decisions that
define the nature and
direction of an organization”


Generation Strategy / Station Business Plan
Key questions include:
- What is your predicted load and revenue?
- Are you adding or shedding capacity, or holding firm?
- What plants have the highest priority for investment?
- What are the performance and capacity goals?
- What capital monies are available?
- What is the supplier/labor availability for this project?


Generation Level Objectives - Samples

• Maximize Heat Rate

• Reduce Equivalent Forced Outage Rate

• Minimize Cost/Megawatt Hour

• Improve Reliability/Equivalent Availability

• Minimize Environmental Concerns

• Reduce/Eliminate (Zero) Lost-time Injuries

• Reduce Cost of Inventory

• Reduce Maintenance Complexity


Weighted Objectives - Samples

Eliminate all EFOR impacts during implementation – 10
Maximize environmental impact/dollars spent – 10
Minimize payback period (cost vs. annual benefit) – 10
Minimize cost/MW Hour – 9
Maximize estimated in-service life – 8
Maximize heat rate - 8
Reduce inventory costs – 7
Use proven technology (i.e., minimize risk) – 6
Minimize lifecycle changes to unit strategy – 5
Minimize Production/Maintenance impact - 4
Approval requirements locally controllable - 2


Outage Management Process

Run Cycle Run Cycle
Conduct Targeted Maintenance
PROCESS

Establish
STEP

Outage
Scope
Define
(ongoing)

Outage
Project
Plan
Outage
Project Implement
Outage
Project

Shutdown

TIME

Maintain Equipment

Conduct
Targeted
Maintenance
– Have all equipments and components been
(ongoing)

systematically reviewed for concerns?
– What equipment has deviations?
– What are the causes of equipment problems?
– What are the recommended “fixes” for these
equipments, and what are the associated resource
requirements?


Problem Analysis - Find True Cause

Should
Ac
tua Deviation
l

Past Now


Outage Scope

Establish
Outage
Scope
– How does the candidate sub-project list compare to
the station performance objectives?

– What is the overall capacity to perform work in
terms of money, time, and people?

– How will we manage low priority needs that are
beneath our capacity to fix in this outage?


Sub-project Scorecard

Go No Go
Project Project Project Project Project Project
Generation Level
A B C D E F
Weighted Objectives

1 2 3 4 5 6
Strategic Priority
scores and risks
Resources


Define the Outage Project

Define
Outage
Project
– What are the performance outcomes, and the time and
resource constraints for the outage project?

– What is the work to be performed (WBS?)

– What are the resource requirements to perform the
work?


Plan the Outage Project

Plan
Outage
Project
– What are the responsibilities for performing the work?

– How will the work be sequenced?

– How will the work be scheduled on the calendar?

– Who will perform the work?

– How can the plan be protected to ensure success?


Manage Human Performance

Fb
Feedback

C+
S P R
Situation Performer Response Consequences

Performance: A number, or series, of behaviors directed
toward a goal

System: A group of interacting and interdependent
components that form a unified whole


Protect the Outage Plan

Consider areas of the outage plan:
– On critical path?
– High industrial safety impact?
– Most expensive tasks?
– Historically problematic tasks?
– High level of involvement?
– New/not performed previously?


Avoid Potential Problems

Cause Effect
Pre

t
en
ng
ve

nti
nti

Co
ve

Actions

Develop Potential Opportunities

Cause Effect

ng
Pro

i
aliz
mo

pit
tin

Ca
g

Actions


Implement the Outage Project

Implement
Outage
Project
– How will we kick-off the outage project?

– How will we monitor the outage project?

– How will we modify the outage project?


Decision Analysis - Managing Emergent Issues

Cause Effect
Co

tive
rre

ap
ctiv

Ad
e

Action

Interim


Evaluate Outage Performance for Continuous Improvement

Outage Definition
People
Skills

ME

CO
TI

ST
PERFORMANCE
State the Develop Develop Work Identify Resource
– What was outage performance in comparison with
Project Objectives Breakdown Structure Requirements

outage goals?
Outage Planning
– What did Project learn in terms of anticipated problems
we
1.1.

JANUARY
1.2.
1.3.
2.0.
3.1.
3.2.

and emergent issues? Assign
Management START
FINISH
Communication Schedule
Sequence Schedule Protect
Responsibility Deliverables
Deliverables Resources the Plan

– How can we improve the “template” for managing
future outages? Outage Implementation REPORT CARD
1.1
.
A
PERFORMANC
1.2
E
.
C+
TIME
B-
1.3
COST
.
COMMENTS
2.0
.

Technical
GO
3.1
.
START
3.2
.
FINISH
Skills Start to Closeout
Implement & Evaluate
Monitor Project Modify Project


Keys to Successful Outage Management

Success is more than just building a work plan

It involves:
• Understanding the capacity to perform project
work so that resources aren’t overloaded;
• Executing work effectively so that results
happen on time and on budget, and
• Learning from your efforts to promote
continuous improvement.


Outage Management Process

Run Cycle Run Cycle
Conduct Targeted Maintenance

Evaluate Outage Project

Support Continuous
PROCESS

Establish
STEP

Outage

Improvement
Scope
Define
(ongoing)

&
Outage
Project Plan
Outage
Project Implement
Outage
Project

Shutdown

TIME

Process-Approach Benefits

• Capital budget is spent rationally
on the best investment decisions
• Projects are delivered on-time with
intended results
• Internal programs and processes
harness staff capabilities and
experience effectively
• The framework for continuous
improvement delivers predictable
results
• Operations and maintenance
programs achieve reliability targets


KT Global Energy Practice - Profile

The company was founded in 1958 by Dr. Charles
Kepner and Dr. Ben Tregoe.

For over 30 years, KT has supported global power
generation and distribution, and oil and gas refining
across their supply chain.

We provide professional services to
improve operational performance
within budget tolerance.

KT operates in 44 countries
delivering services in 14 languages.


Value of Kepner-Tregoe

Strategic and Operational Outcomes

Rational Thinking

Collaboration

Capability Transfer

Rapid Results

Lasting Value


Geoff Edelman (gedelman@kepner-tregoe.com)
Director, Energy Group

Kepner-Tregoe Inc.


Successful Outage Management Lessons Learned From Global Generation Leaders

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