Why Shutdowns, Turnarounds and Outages (STOs) Need a Digital Thread
Did you know that shutdowns, turnarounds and outages (STOs) can consume up to 50% of a plant’s annual maintenance budget? That's according to a report by the Boston Consulting Group.
STOs are among the most complex and high-stakes events in industrial operations. They're costly, especially when executed poorly. But that's not the only downside. Safety is also a major concern. One survey found, for example, that 40% of plant incidents occur during startups, shutdowns or shift handovers—making them some of the most hazardous moments in industrial operations.
But what if an STO is done right? A well-executed shutdown can rejuvenate a plant and set it up for years of efficient, safe operations. Yet, the survey referenced above by BCG states only one-third of turnarounds meet their objectives, finishing on time, on budget and completing all planned tasks.
So, how can organizations ensure their STO objectives are met? In this blog, we'll explore how the right preparation, culture and digital tools form a digital thread that’s critical for planning and executing successful STOs.
Understanding Why STOs Often Fail
A study by global engineering consultancy AFRY in the Nordics sheds light on why shutdowns frequently fall short. “The shutdown is generally understood to be the single most important event during the year, but it is not managed according to that importance.”
A very common challenge, the study notes, is that STOs are massive, one-of-a-kind projects that often function as a set of disconnected sub-projects. Engineering, procurement, operations and maintenance teams work in silos, each with their own priorities, tools and data. This disconnect creates inefficiencies, scope creep and cost overruns.
Financial planning is a prime example. STOs require significant funding, but capital expenditures (CapEx) and operational expenditures (OpEx) are often budgeted separately. Meanwhile, maintenance and capital project managers use different systems with little interoperability, making it difficult to optimize workforce allocation, minimize risks or run what-if scenarios.
Working in silos also increases the likelihood of scope creep and delays. A 2020 paper found that 73% of STOs saw the scope evolve as the shutdown went on, leaving teams with the uneasy choice to prolong the shutdown or fail to deliver on the shutdown’s everchanging goals. The problem is compounded by the fact that STO events routinely entail tens of thousands of activities and often experience unexpected scope increases by up to 50%, which subsequently adds to delays and cost overruns.
Breaking Silos Between Projects and Operations
These challenges show why broad advice like ‘plan early and meticulously,’ while true, fall short. If engineering, procurement, operations and maintenance teams each work with their own priorities and tools, no amount of preparation will guarantee success.
A key issue is the lack of an integrated digital thread that can provide end-to-end visibility across the STO. STOs sit at the intersection of asset maintenance and capital projects. Yet, organizations often try to manage them with separate toolsets. Unless all STO-related systems are integrated, the teams that use them will remain uninformed and siloed within their own focus without proper context, which creates costly misalignments.
What’s needed is an enterprise-wide, integrated STO management system that connects maintenance, capital projects, financial planning and risk management on a single digital platform. Enterprise Project Performance (EPP) solutions break down these silos, acting as a single source of truth for every facet of an STO by connecting projects with maintenance and operations to maximize success.
Do Your Digital Tools Set Your STOs Up for Success?
If you are looking to improve your toolset and the effectiveness of your STOs, here are four crucial capabilities to look out for:
1. Strategic Long-Range Planning
A robust STO management system enables multi-year planning, helping organizations move away from reactive budgeting.
For example, an EPP system provides tools like conceptual estimating that let companies forecast costs based on historical data, adjusting for market conditions and escalation factors. Instead of treating each STO as a standalone event, companies can map out a 5-to-10-year STO strategy, optimizing scheduling across multiple facilities.
With an EPP solution, companies can create a roadmap that estimates future shutdown costs and ensures that those estimates are grounded in historical data and adjusted based on current market conditions. This long-term view prevents cost overruns and helps companies allocate resources more efficiently across multiple shutdowns.
2. Real-Time Collaboration and Data Integration
Relying on fragmented homegrown spreadsheets and databases can have significant adverse effects on projects as complex as STOs, which can involve thousands of individual activities. The sheer number of moving pieces means that even small misalignments or delays in decision-making can cascade into significant cost overruns and schedule slippage.
Additionally, many organizations are grappling with the complexities of 'different colors of money,’ where expenses are categorized differently across departments and projects, which hampers the alignment of expenditures with overarching business goals.
An EPP approach addresses these challenges head-on with its STO Portfolio Management solution by providing a centralized platform across engineering, procurement, operations and finance where all stakeholders can access the same data. This improves coordination and decision-making, ensuring maintenance schedules align with capital investments.
3. Robust Integrations and Interoperability
Large STOs involve dozens of vendors and thousands of purchase orders. Integration with ERP systems, alongside time and cost management systems, are essential to manage financial, human and equipment resource plans effectively.
This integration ensures that the company can obtain all the benefits of automation and real-time data-driven decisions by automatically extracting cost, schedule and progress data rather than relying on manual exports and spreadsheets.
Another crucial integration is with asset management platforms. EPP solutions integrate with a wide array of critical STO systems, like an Enterprise Asset Management (EAM) software, which allows the customer to associate operational and maintenance capabilities—such as labor and contractor management, parts inventory and scheduling—with critical capital projects features.
4. Risk-Driven Budgeting and Execution
STOs are inherently risky, but a digital thread helps companies quantify and mitigate risks before they become problems.
First, a risk-based approach is essential to prioritize which events should be in scope and which should be deferred. Organizations can also use predictive analytics to identify potential bottlenecks, plan contingencies and ensure safety compliance at every stage.
Before and during the event, adaptability is key. The right platform should be able to identify and manage issues, risks and changes with consistent STO management procedures, reevaluate forecasts based on progress and performance, and adjust work plans and resource management accordingly.
Such a risk-based, adjustable approach is essential because many failed shutdowns follow a similar scenario: unforeseen complications occur early on, derailing rigid plans and leading to extended shutdowns or incomplete tasks.
Adopting an effective digital infrastructure that meets these four criteria brings short- and long-term benefits.
In the short term, organizations manage to do more within the given time frame, reduce risks and maximize the value of their shutdowns and turnarounds. Well-executed shutdowns ensure plants are running at peak performance for years to come, preventing unplanned downtime and optimizing asset longevity. In the long run, these events become opportunities for continuous improvement, capturing lessons learned, refining future STO strategies and integrating insights into enterprise-wide asset lifecycle planning.
Driving STO Success with Enterprise Project Performance
Looking to improve your STO management with long-range planning and strategic budgeting? EcoSys™, a state-of-the-art Enterprise Project Performance solution, transforms STO management by enabling strategic long-range planning and comprehensive budgeting across multiple facilities. See how your organization can align STOs with business objectives while delivering them on time and on budget armed with EcoSys.