Operational Readiness
Setting your capital projects up for success
Operational Readiness sets you up for success right from the start
Operational Readiness is also known as “Integrated Logistics Support” (ILS) – particularly in military and aerospace circles. They know that if you don’t set up support before putting your systems in the field, you will suffer huge losses, including human life.
Imagine a new aircraft were introduced into service in the same way that we turn over industrial operations from EPC to operations. We’d be terrified to fly in any new aircraft!
Achieving fully operational status quickly and sustaining it is not that difficult to do. The best time to do it during the mid and later phases of capital projects. Then, when the system is put into operation, its operators know how to operate it, maintainers know how to maintain it, they are all fully trained, the parts and tools needed are available for them, documentation is complete and accurate …
Many industrial projects simply do not have most of (sometimes any) of that in place when handed over to operations. Consequently, operators struggle to learn how to operate their new systems and maintainers struggle for years to get the parts they need in stores.
Too many failures
70% of organizations have experienced at least one capital project failure in the last year (KPMG). Capital projects are big investments and the future your company can depend on them.
For every $1 billion invested, $122 million is wasted due to poor project performance. Lack of clear goals, poor stakeholder engagement, ineffective risk management and poor communications are all big reasons. A big part of the risk is that the systems simply don’t work as expected, or they cannot sustain performance – breaking down and taking a long time to repair.
Reliability is built in. But you won’t achieve it without Operational Readiness
We have been involved in military and aircraft projects, working with ILS. Both industries have strong motivation to get it right, so they invest in it. Industrial operations, despite investing billions in capital projects, still tolerate long start ups, substantial breakdowns and disruptions as they ramp up, and less than desired performance – sometimes for years.
We first wrote the industrial application of ILS concepts in 2004. That original paper has been updated to reflect today’s realities. You can request a copy here: Operational Readiness
The cost of OR is in the range of 3 – 5% of the capital cost of your projects. You probably spend at least a part of that on “start up spares” already, and another 2% or so on warranties. Between those you can pay for much of this and instead of insuring yourself against failure with warranties, you can actually get it right!
Operational Readiness refers to the preparations necessary to ensure your project (system, equipment) can start up and run reliably in service. It entails having operations and maintenance personnel available and trained for the asset, operating procedures and needed documentation defined and ready for use, the right maintenance defined and planned, special tools or other maintenance support infrastructure ready, supporting spare parts and materials available.
Being ready for operations will cost 3 to 5% of the capital cost for a new project. Annual operating cost savings will be approximately the same as your initial investment (100% ROI) and achievement of designed reliability will usually result in revenue gains that are multiples of the costs saved.
Request for Information: Operational Readiness
