Operational Excellence framework helps secure ROI of projects
Many projects do not pay enough attention to on going operations, but this can be a costly mistake. Chris Hamlin, Director Global Industry Consulting at Emerson Process Management, explains how the firm’s Operational Excellence framework, part of the Project Certainty approach, can boost return on investment by ensuring Top Quartile operating performance.
Discussions about project performance usually focus on investment, specifically on time, cost and risk. But there is another dimension that all too often takes second place, if indeed it is considered at all; securing the return on that investment.
It is universally acknowledged that projects pay insufficient attention to on going operations, but most people would accept that the operating returns from the asset are economically more important than the up-front cost. So why does this behaviour persist and why don’t we learn from our collective experience?
The operations of Top Quartile performers rely on a unique combination of advanced technologies, complex processes and capable people. But unique combinations of advanced technologies and complex processes are the last things project managers want to hear – they can only move time, cost and risk in the wrong direction. Project teams design and build the simplest possible plant that can meet the performance objectives of the project (defined in terms of throughput, yield and efficiency). Discretionary technologies that enable high-level performance and continuous improvement inevitably get excluded in the later stages of most projects.
Consequently most plants go through a 3-5 year period of ‘just good enough operation’ after start-up. During this time the new operating teams start to define and implement the practices and enabling technologies that will eventually get them to Top Quartile performance. This performance gap is horribly expensive from a return on investment and cash flow perspective. Wouldn’t it be great if we could accelerate the realisation of Top Quartile performance without significantly adding to the time, cost or risk of the base project?
The idea that control infrastructure acts as the ‘central nervous system’ of a production facility has almost become a cliché, but it remains a great metaphor. Consider some Top Quartile operator characteristics. We are finally seeing the long promised realisation of predictive and preventative maintenance. Leading performers proactively monitor the condition of their assets, compare performance against rigorous and empirical models and take action before anything breaks or production is impacted. The whole process industry is moving from the traditional model of reactive, periodic planning to continuous monitoring and refinement of production plans. Specification of the right system architecture, measurements and controls delivers fundamental competitive advantage, providing ultimate flexibility to respond and grow.
Emerson’s Operational Excellence framework provides a model of all the factors that impact on overall effectiveness. We use it in the early stages of project design to make sure that the automation infrastructure that is delivered can actually deliver the level of operational performance necessary to meet or exceed the anticipated return on investment. Furthermore, by identifying programmes that will deliver a step-change in economics, capture demand, or address foundational issues that hold the enterprise to ransom, it enables the transition from ‘good enough’ to ‘Top Quartile’ to start on day one of operation. Emerson has also developed a group of Operational Excellence specialists who are skilled, experienced and qualified consultants and are supporting and guiding many of our clients through this process.
