Critical Factors for Commissioning/Startup Success Joel Tremblay, Chevron RT 312: Best Practices for Commissioning/Startup

RT 312 Members Tom Pierie, Ameren Missouri Daniel W. Barrett, ConocoPhillips Mark E. Bennett, Black & Veatch Jonah Collins, Southern Company Tony Ermovick, U.S. Department of Energy Paul Foster, Alstom Power, Inc. Quint Hebert, ConocoPhillips Ron Johnson, Lauren Engineers & Constructors, Inc. Edward McDaniel, CH2M HILL Dale Millsap, The Williams Companies, Inc. Rob Murray, Irving Oil Limited Brian H. Nordmann, Emerson Process Management Mauricio Rodriguez, Smithsonian Institution Michael B. Rugh, Technip North America Elizabeth Shaw, ArcelorMittal Matt Sikstrom, Ontario Power Generation, Inc. Mitchell Suchyta, Barton Malow Company Joel Tremblay, Chevron Dr. James T. O’Connor, University of Texas at Austin Jin Ouk Choi, University of Texas at Austin Matthew Winkler, University of Texas at Austin Speech: Before I get started, I would like to thank my fellow members who over the past 2 years, many late nights and long hours have managed to pull together this final product....Critical Success Factors for Commissioning and start-up success. The team was comprised of 18 members; Representing 453 total years of industry experience; And 572 total projects commissioned and/or started up Breaking news interruption.....

Cases for Action “Trial and error … still seems to be a common approach in the startup of industrial plants.” (Almasi 2014) “Almost half of...facilities had significant operability problems. … Failed projects averaged only 60% of planned production in the first year, with 65% of these suffering long-term operations issues.” (Merrow 2010) 5.7% Cost Growth and 9.0% Schedule Growth on projects … with low implementation of Planning for Startup. (CII Benchmarking 2010) Commissioning cost and schedule overruns occurred in 30% and 40% of all projects surveyed, respectively. (CII 10-10 Performance Assessment Data) Speech: Does this look familiar to anyone here? Has anyone experienced equipment failures during commissioning and initial start-up? Through literature reviews such as: Merrow, Powell and others Lookback on RT 121 findings And a review of the 2010 CII Benchmarking/Performance Assessment We found overwhelming evidence to support a case for action Additionally, there has been no CII research update on CSU in 17 years and with industry changing, project complexities increasing and technologies ever expanding, it was time for CII to re-address the issue of Commissioning and Start-up.

Identify Critical Success Factors (CSFs) RT Objectives & Scope Align on Key Terms Identify Critical Success Factors (CSFs) Assess CSFs impact on Commissioning Performance Show links between CSFs and CII 121-2 Analyze CSU failures … and failed CSF links Identify New Innovative Technologies Speech: The purpose of our research was to better understand effective management approaches and new technologies in order to more effectively achieve successful commissioning and startup of capital projects. Specific objectives of the research include the following : Broaden the understanding of key terms pertaining to commissioning/startup/initial operations. Identify critical success factors (CSF’s) that can offer a step-wise advancement in the planning and execution of project commissioning, startup, and initial operations. Understand the industry’s current extent of accomplishment or achievement of the identified critical success factors and identify relevant barriers to their successful achievement. Analyze project commissioning/startup performance relative to the extent of CSF implementation, thereby gaining an understanding of the relative contribution from CSFs on actual commissioning performance. Show how the critical success factors link to the Planning for Startup Implementation Resource (CII pub. 121-2). And lastly, identify new innovative technologies that can help further leverage CSU performance.

RT Objectives & Scope IN-Scope: OUT-of-Scope: All project phases (Planning and Execution) Focus on industrial facilities OUT-of-Scope: Steady-state plant operations after final performance testing Rewrite of CII publication 121-2 Speech: Our research focused on commissioning and start-up and the applicable activities across all phases of a project (project initiation through to initial operations) Our findings are focused heavily on industrial facilities, such as petro-chemical, power, water/waste-water treatment, and nuclear plants. However, most findings are also applicable to building and infrastructure projects, such as pharmaceutical, hospital, and airport projects Facility operations considerations were limited operational ramp-up periods and up to and including final plant performance testing. Steady-state plant operations issues that occur after final performance testing were outside the scope of this study. Some additions and modifications to CII publication 121-2 (Planning for Startup) have been included in the study, but a comprehensive update (i.e., revision) of that planning document was outside the scope of this study.

Research Methodology: 22 steps Defined Critical Success Factors (CSF) Edit slide: Add animation that blows up CSF box with shadow to show where it came from Speech: Our team applied a rigorous methodology to arrive at its findings which is illustrated here. At the corner stone of our research findings were the establishment of the 16 Critical Success Factors

Other Methodology Highlights Innovative Commissioning Technologies 4 Failure Mini-Case Studies with CSF missing links Timing of CSF Implementation CSF Indicators of Achievement Checklist Tool Edit slide: Add animation make each of the 5 appear individually Speech: Once the CSFs were determined, a number of subsequent CSF-related developments followed. Some of those developments include: Timing of CSF implementation (within project context); Identification of CSF indicators (or tell-tales) of achievement; and Four detailed commissioning failure mini-case studies, that highlight failed links to the CSFs; CSF/Indicators checklist tool. And finally identification of Innovative technologies to support CSF implementation

CSF Development & Screening 139 Potential Factors Survey: Assessment by 40 CSU Experts Edit Slides: Get color pallet, modify green funnel to match Add animation. Make each appear individually as follows: Funnel and 140 Potential Factors Survey assessment 16 critical success factors Speech: The 16 CSFs were established by starting with 140 potential factors Through expert professional input from 40 CSU industry experts, objective data collection, and data analysis with statistically significant results, 140 potential factors affecting a project’s CSU effort were refined down to 16 critical success factors (CSFs). These CSF’s are identified not only by their specific required actions, but are also project phase-sequenced, proving the need for generally earlier planning of CSU. 16 Critical Success Factors

16 CSU Critical Success Factors & Timing 81% of CSFs initiated prior to Construction Speech: The effectiveness and/or impact from the critical success factors is partly driven by proper timing, so it is very important to understand the optimal or appropriate timing of implementation for each of the 16 factors We mapped the CSFs across the project phases Not surprisingly, we found that 13 of the 16 (81%) are initiated prior to the start of construction (with 9 of those 13 completed prior to construction start) The key message is “Don’t delay in implementing the critical success factors.” Our findings clearly show a paradigm shift is needed in the world of project management. Project managers need to understand the impact to overall project performance if commissioning teams are not put in place early in the project lifecycle The short term cost savings associated with a smaller project planning team is far out weighed by the resulting impacts to production attainment, project cost and schedule.

Some CSF Descriptions CSF #4: ALIGNMENT AMONG OWNER PM, OPERATIONS, CSU, ENGINEERING, AND CONSTRUCTION The project and CSU will benefit substantially by getting early alignment among CSU, Operations, Project Management, Engineering, and Construction representatives on the key issues of CSU terminology, CSU success drivers, and CSU strategies. Lack of such alignment may pose a threat to CSU success. Sustained alignment between these entities can only be achieved with effective collaboration throughout the life of the project. CSF #13: INTEGRATED CONSTRUCTION/CSU SCHEDULE A fully integrated construction/pre-commissioning/commissioning schedule is critical to achieving CSU objectives. This schedule should integrate all checks, tests, and approval-milestones for each component and all systems, and show development of supportive documentation. Edit slides Combine next 3 slides into one by adding animations with the 3 key CSFs appearing individually Speech: To give you a flavor of some of the critical success factors identified, I will highlight a few: Starting with early alignment – early alignment between Engineering, Commissioning, construction and operations is key. For example, how a facility will be tested and initially started will influence the design. Questions like “How will this facility be started up?” need to be asked in the design phase with the right people involved to ensure the design can support initial start-up. Project managers need to set this expectation. Fully integrated project schedule - A fully integrated construction/pre-commissioning/commissioning schedule is critical to achieving CSU objectives. The schedule needs to be detailed enough to drive completions at the tag/component level. This schedule also facilitates the transition from area to system based completions. Collaborative Construction/Commissioning handover – Early alignment on handover expectations between construction and commissioning is needed to realize overall better project performance. Silo’d mentalities and drivers need to be replaced with a collaborative approach to systems handover.

CSFs … Less Frequently Implemented CSF #1: CSU Value Recognition CSF #7: CSU Systems Engineering during Front-End Engineering CSF #10: Systems Focus in Detailed Design 65% Speech Through both surveys and analysis of actual project data we identified 6 CSFs that were less frequently implemented. An example of 3 of those “laggard” CSFs are: Value recognition Systems Engineering in FEED Systems focus continued through detailed design These less frequently implemented CSFs represent key commissioning planning activities. Failure to implement these CSFs, greatly increase the risk of poor overall project performance Add data.......For example, for these three CSFs on average, approximately 65% of our under performing projects, did not accomplish these CSFs

Analysis of Project Performance: Commissioning Performance vs CSF Implementation Are these CSFs Valid? Speech: So how do we know these 16 CSFs truly impact commissioning/start-up performance? Are these CSFs really valid? Analyzed 26 projects in depth It is a statistically significant relationship and indicates More than half of variation in project commissioning performance can be explained by the critical success factors Come to our implementation session for more information on this and to see the 45 leading indicators of CSF achievement available for PMs to leverage

26 Projects: Commissioning Performance vs CSF Implementation Speech: So how do we know these 16 CSFs truly impact commissioning/start-up performance? Are these CSFs really valid? Analyzed 26 projects in depth It is a statistically significant relationship and indicates More than half of variation in project commissioning performance can be explained by the critical success factors Come to our implementation session for more information on this and to see the 45 leading indicators of CSF achievement available for PMs to leverage Commissioning Performance: 8 Criteria on 5 pt. scale (CII, pub. 121-2)

5 Innovative Commissioning Technologies Timing of Application Simulation-Based Virtual Commissioning & Operator Training Costs savings through shortened operator training and reduced startup time. Edit slide: Add fly in of benefits to leveraging the technologies Speech: Another key finding from this research was the identification and characterization of five innovative commissioning technologies. Each of these technologies facilitates CSU information management in ways that can significantly leverage the effectiveness of CSU teams and their efforts. Here you can see them mapped over relevant project phases These tools can increase the effectiveness and efficiency of your commissioning team in a variety of ways. You will hear more about these in our implementation session

CSF Links to Planning for Start-up process Speech: Another key finding from this research was the determination of the linkages or connections between the 16 CSU critical success factors and the Planning for Startup activity flowcharts, which were modeled by CII Research Team 121 in the late 1990s and published in Implementation Resource 121-2. RT 312 was motivated to identify these linkages for several reasons: The research products of RT 121 and RT 312 better serve industry if they provide a clear, cohesive path-forward approach. Two entirely stand-alone disconnected models of industry best practice would run the risk of incompatibility, incongruity, conflict, etc. Understanding the linkages between the two best-practice models could serve as a form of cross-check of the CSFs with regards to frame-of-reference and industry relevance. All 16 CSFs were mapped to the existing planning for start-up model

Other Research Findings CSU Terminology, Milestones, & Organization Functions CSF Indicators of Achievement Learnings from 4 mini-case studies Barriers to Less Frequently Accomplished CSFs Links between CSFs and Quality/Safety Speech: Some of our other research findings included: CSU terminology, milestones & organization functions CSF indicators of achievement Learnings from 4 mini-case studies Barriers to “laggard” CSFs Links between CSFs and Quality/Safety Interruption!!

Come to our Implementation Session News Story: Shlock Asbestos Mfg. commissioning mistakes Session Participants WCSU news team: Dale Millsap, Liz Shaw, Tony Ermovick Shlock Mfg. Commissioning Mgr.: Mauricio Rodriguez RT: Tom Pierie, Jim O’Connor, Brian Nordmann CSF Implementation Checklist Speech: Oh yeah, that reminds me, please come to our implementation session where you will hear more on this shocking commissioning disaster story that is developing at Shlock Asbestos Mfg. Inc. The WCSU News team anchored by Dale Millsap, supported by exquisite reporter Liz Shaw and Tony Ermovick will be covering the story live including interviews with the Shlock Mfg. commissioning mgr.: Mauricio Rodriguez, RT-312 Research team members Tom Pierie and Brian Nordman as well as RT-312 principle investigator Dr. James T. O’Connor. Input time and room # In addition to live coverage of this disaster story, you will be introduced to our CSF implementation checklist. This simple tool conveys four types of information: Critical success factors Indicators of CSF achievement Timing of implementation of CSFs Innovative commissioning tools and their timing of application