Remote working proves intensive but extraordinarily successful as workshops are forced to abandon.

Challenged to find further efficiencies in the capital programme for end-of-life asset replacements, with a deadline set within less than 2 months, to identify these efficiencies, this was ambitious planning.
3 projects could be deferred by 3 or more years (execution in or later than 2023) with an asset life cycle cost saving of ~€500k.
6 projects needed funding on short notice for execution in 2020 – 2021 to remediate a total risk of ~€6M if the planned interventions were delayed.
4 projects were identified as being deferrable for one year, Deferrals increased the asset life cycle cost by ~€800k with one year of delay
Contract Objectives

SABIC is a multinational chemical manufacturing company which is active in petrochemicals, chemicals, industrial polymers, fertilizers, and metals. This project focused on the management of aging assets at the Geleen site in the Netherlands. The as-sets included in the scope of the project are diverse covering everything from safety pressure switches and control systems, through to cracker furnaces and large hydrocarbon storage tanks. Some of the assets predate the existing chemical production processes and were originally constructed when the site was a cokes plant and are now >66 years old.

The Woodhouse Partnership was selected to support SABIC’s Asset Lifecycle Management system with an Asset Lifecycle Evaluation decision-making process. With some assets reaching their end-of-life and needing capital investments to mitigate risks on Health-Safety-Environment and/or loss in business continuity, the management team at Geleen had been challenged to find further efficiencies in the capital programme for end-of-life asset replacements With a deadline set within less than 2 months, to identify these efficiencies, it was ambitious planning. Existing risk and business planning methodologies did not account for the rates of change of risk profiles, which were of concern. Fundamentally there was an absolute need to challenge and verify perceived asset knowledge/ risk assessments in which other influencing factors needed to be included. A process was required to justify the best business strategy in a way that would be transparent to all stakeholders.

Activity Description

The Woodhouse Partnership was selected to support SABIC’s Asset Lifecycle Management system with an Asset Lifecycle Evaluation decision-making process. Designed to be applied proportionally to all asset-related decisions from simple common sense asset interventions (low cost, risk, and performance impact) through to complex multi-portfolio programs of work. The decision-making framework takes a blend of a pre-existing tools and approaches and combines these with innovative life cycle evaluation tools and a decision-making process that encourages a culture of collaboration. Cross-functional team working was one of the critical success factors of this project. Technical expert knowledge was delivered by electrical, mechanical and instrumentation engineers, gave insights of the failure modes at the level of detail required. This multi-dimension view of the end-of-life factors proved to be highly effective in breaking down the decision influences. Critical in ensuring stakeholder acceptance of the proposed solution, the final task of the team was to make a recommendation on the solution to be implemented and the timing of the intervention.

Midway through the project, the COVID-19 lockdown came into force; the face-to-face workshop approach was abandoned, as the team changed over to remote working. The project team found remote working extraordinarily successful but far more intensive than face-to-face working.

Contract Project Outcomes

As an organization Geleen learned, how for more complex projects, qualitative information can be transferred to quantitative statements with ranges of uncertainty, to develop business cases which can even change in time. The project was delivered on time, with quantified business cases which showed that some assets needed urgent investment, but for other assets, there were significant opportunities for optimization of the capital program by delaying and/or choosing alternative solutions.

Due to issues beyond the control of the team, 14 projects due in 2020 were deferred. This created a sense of urgency to clarify the business impact and risks at a more detailed level than what was provided by the existing processes and this to justify capital funding.

The results were fully accepted by all stakeholders on site and incorporated in an adapted site business plan.

Out of the 14 end-of-life asset replacement decisions:
• 3 projects could be deferred by 3 or more years (execution in or later than 2023) with an asset life cycle cost saving of ~€500k.
• 6 projects needed funding on short notice for execution in 2020 – 2021 to remediate a total risk of ~€6M if the planned interventions were delayed (Safety-Health-Environment monetized).
• 4 projects were identified as being deferrable for one year, Deferrals increased the asset life cycle cost by ~€800k with one year of delay.

 

“The Woodhouse Partnership asked the right questions to quantify the information of our engineers in such a way that earlier more qualitative risk assessments and capital investment motivations were transferred, with the support of Decision Support Tool (DST) software, into well-motivated and transparent business cases. As a direct result, we were able – and confident – in the reprioritization of the capital program. Several projects were postponed, but others were pulled forward. As an organization we learned how for more complex projects, qualitative information can be transferred to quantitative statements with ranges of uncertainty, to develop business cases that can even change in time. The approach was innovative and highly appreciated by all stakeholders”.

Katleen Switten
Asset Performance Engineering. SABIC Geleen

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John Woodhouse

With 30 years’ experience in utilities, oil & gas, transport and other sectors, John is one of the most widely known experts in integrated asset management projects for some of the largest companies in the world.

John is a Founder and Life Fellow of the IAM; he has written 4 books, chaired the development of BSI PAS55 and represents the UK on the ISO55000 committee.

He also led the international MACRO and SALVO collaboration projects in optimised asset management decision-making.

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