In building new plants, many energy companies fall into the common trap of assuming that by spending millions of dollars on the latest generation of equipment and technology, they will automatically yield better operating performance than they produce at their older units. But research by Solomon Associates, a leading performance improvement company for the global energy industry, indicates that this is not the case.
Based on research, Charles Reith, Vice President of Consulting Services identified, the four most common mistakes that energy companies make in designing new facilities.
Designing for throughput or capacity rather than overall performance
It is easy to focus on a single variable, particularly throughput, in building a new unit. But concentrating on throughput alone can be a recipe for an inefficient facility. It is only one factor to consider in optimising performance. Other factors include energy efficiency, process flexibility, impact on refinery steam and fuel balance, and product specifications.
Failing to include operations personnel in the project team
Often the project team for a new plant includes executives from the company’s corporate office, third party designers, outside consultants, everybody, it seems, except members of the operations team that will actually run the facility once the steel is on the ground. The participation of operations personnel in the project team is critical for a number of reasons. For one thing, operations can offer ground level insights that can improve the unit’s design. For another, the company will be more likely to earn the all important buy in of operations personnel in the new project.
Planning to run the new plant the same way you ran the old plant
Even as they spend millions of dollars on state of the art equipment and the latest bells and whistles, too many operators fail to focus on the nuts and bolts of running an efficient plant. Whilst researching Solomon Associates has consistently found that the performance of a company’s existing plants is the single greatest predictor of the performance of its new facilities. A fourth quartile performer will not become a first quartile performer by opening a new plant, unless it adopts industry best practices in its operations.
Cutting corners on training
Building new facilities is expensive, and unfortunately, sometimes employee training is one of the first items to be cut in trying to meet budget estimates. This is a classic example of false economy. New facilities rarely meet ROI projections if operations personnel are not adequately trained on new equipment and procedures that drive performance.