Operational Readiness: Bridging the Gap Between Construction and Operations for New Capital Assets

Operational Readiness: Bridging the Gap Between Construction and Operations for New Capital Assets


It traditionally has been the case that significant leakage of anticipated project value occurs during the turn-over/commissioning and ramp-up periods of the new asset lifecycle. 


Case studies have measured this leakage to be as much as 30% of the value that was anticipated during the early stages of the total lifecycle.


The early stages consume the first three to five years and include the engineering, design, construction, commissioning and ramp-up phases. The ramp-up phase is usually the first year after commissioning-often a painful period of unstable operations, with significant lost revenue and profit opportunities due to unexpected and extended downtime. 


Of equal and often greater significance, the actual operations and maintenance costs (O&M) of the assets during the longest portion of the total asset lifecycle-the operate/maintain stage (often 30 years or more)-typically are 1% to 2% higher (conservatively speaking) than the expected total lifecycle costs assumed in the initial business case-and this does not include the operability value destroyed because of poor design choices, unprepared operators and maintainers, antiquated maintenance strategies and a lack of necessary documentation. 


Choices made during the early design and construction phases set in place the long-term operating performance, as well as the long-term operations and maintenance costs for the more than 30-year life of the asset. 


Poor choices can doom the organization into incurring unnecessary lifecycle costs, reaching into the hundreds of millions of dollars for some large projects.


Read more at   
http://reliabilityweb.com/index.php/articles/bridging_the_gap_between_construction_and_operations/