What is the best shutdown labour strategy?
If you have ever been involved in a major shutdown in Australia, you most probably have used a large number of contractor labour. Not specialised labour coming to do a specific task – general trades and non-trades coming to do day to day mechanical and electrical work.
Many companies have gone through cycles with strategies ranging from labour without any supervision or add-ons (bums on seats), to ring fencing a section of plant and utilising a contracting partner to plan, schedule and execute the work as a whole. And then somewhere in between. So what is the right strategy for your business?
Bums On Seats
Let’s start with the ‘cheapest’ (and we will review how cheap it is) option: bums on seats.
In order to get trades and non-trades labour only, without any supervision, your company must have robust planning and scheduling processes in place. The planning must take into consideration and assume that the task will be completed by a qualified person – implying the expectation of a certain level of competency. The task planning must also incorporate environmental and plant specific conditions that even a competent person will not necessarily be aware of, unless he has some familiarity with the area. Your scheduling process must be able to accommodate changes on an ongoing basis.
Lastly, and possibly the most important, you must have exceptional supervisionin place. They will need to ensure all the effort around planning and scheduling is adhered to. A lack of supervision will make the best efforts in planning and scheduling, null and void.
There is a perception that a company’s full time tradesmen can be used as supervision during the execution of the shutdown, but this is flawed. Let me pose the question: would you promote each and every tradesman you have, to the position of supervisor? If not, why would you put them into a supervision role under the most strenuous conditions known to the maintenance organisation, i.e. a Shutdown?
Boots ‘n All
So let’s go to the other side of the spectrum: boots ‘n all.
Ring fence a section of the plant for a contracting partner to come in and do the complete planning and execution. The benefit is your organisation do not need any planning or scheduling processes in place. You could potentially get the best planning and scheduling team together for the work, but this will come at a cost. Remember, for every hour a person works for you, the contracting partner makes a profit. So, the more resources applied to do the planning and scheduling, the bigger their margin.
For this model, you will need exceptional processes around scope compilation and governance with checks and balances in place, to ensure the contracting partner does not feed their own margin with scope creep and additional work.
One potential way of minimising this, is to ring fence the work at a fixed price. The risk then lies with the contracting partner to conduct the work in an efficient and profitable manner, however, the scope will have to be clearly defined. The more unknowns that are present in the scope, the more cost will be added to the fixed price to cater for it.
Somewhere in between
Maybe the solution for your business lies somewhere in between. Evaluate the following:
– Quality and effectiveness of your current planning process.
– Quality and effectiveness of your current scheduling process.
– Do you have the ability to compile detailed work scopes to be tendered as a package?
– What is the quality of your supervision?
– Do you have sufficient supervision for the required ratio to effectively manage labour teams? (Industry benchmark is 8:1 – 8 trades for every supervisor)
– Site and area familiarity – what is your current return rate of labour? If it is low, you will need higher quality supervision or possibly a smaller span of control (5:1). If it is high, you could have lower quality supervision or larger span of control (10:1).
So how do you determine the right strategy for your department? Start by reviewing the above, then determine your Vision for the shutdown. As far as practical, keep it simple, but keep it real.
Everything you do, must be intentional in supporting your shutdown Vision. If it does not support your Vision, question the need to even do it.
So what is the cost?
Everything you do, has a cost.
Let’s review the ‘cheapest option’: bums on seats.
If you inadvertently have this strategy, chances are this was a cost driven outcome based on a ‘distorted’ sense of control. If you control the people you control the cost, right?
To evaluate this look at your safety performance for the shutdown and measure this against your day-to-day performance. If it is worse, what is the ‘cost’ associated with that?
Then review your level of re-work during/after the shutdown. Re-work includes work that was not performed due to a lack of spares/resources/time, as you need to reschedule this while preserving the spares OR re-order the spares for the next shutdown.
Furthermore, you need to evaluate the impact your shutdown has on your team. If they all dread the next shutdown – that is usually a tell-tale sign of an unhealthy milieu.
Although these ‘costs’ are sometimes hard to quantify in monetary value, it is a good measure of the cost of your chosen strategy.
On the other side of the spectrum, if you have a contracting partner that is flourishing, with more and more people on site and no performance KPI’s, chances are you are wasting money on someone else’s profit margin.
The level of your planning and scheduling should suit the labour strategy you have adopted. And your labour strategy should complement the level of planning and scheduling available within your organisation.
Anything else to consider:
Evaluate what other factors influence your shutdown. This may include but are not limited to:
– Local vs FIFO labour
– Mobilisation to and from site
– Hours of work and fatigue impact
– Congestion around camp, mess, training and how that affects personnel
– Level of inductions required
– Site specific rules, conditions or nuances that is not ‘normal’ in industry
Once you sit down, take the time to evaluate all of these and more, you will end up with the best shutdown labour strategy available for YOUR SITE. There is no silver bullet for all – they are site specific.
If you would like us to assist in the facilitation of determining the best Shutdown Labour Strategy for your business, give us a call.