Indeed Reviews >
By: Rick Wheeler, Vice President of Professional Services at Life Cycle Engineering
As published in North American Executive
You’ve decided on a location for your facility. You’ve got the bricks and mortar going up. Maybe you’ve hired some workers, and your assets are in place. It all comes down to this – as the last 100 yards to the finish line quickly approaches, you need to get this plant up and safely running, producing products, and generating profits.
How confident are you in meeting your timelines? If you haven’t thought of an operational readiness plan, you’ve missed the mark. There’s a reason why only a handful of new plants succeed in their ability to build on time, on budget, and meet target production goals. A recent article published by PwC’s strategy+business magazine says that ‘a staggering 91.5 percent of projects go over budget, over schedule, or both.’
For them, the finish line is cutting the ribbon in front of the new facility. They’re embodying the ‘if you build it, they will come’ mentality. But the project isn’t ready for operation if people, processes, and technology aren’t also prepared.
Early decisions around managing risk and asset reliability are crucial. Are you ready to beat the odds and build a plant that can withstand future economic and supply chain challenges?
Best practices to ensure your plant starts effectively and efficiently
Resources and budget for addressing a plant’s operational readiness are often an afterthought – project and operations managers then struggle to fill gaps in the later stages of the project. Think about the longstanding benefits of hiring workers with the right knowledge and skill set from the start. Or having a holistic asset management plan that includes operating and maintenance strategies, and documented procedures.
Many new plants fail to do this – and the consequences are real. Last year, a microchip manufacturing plant in Phoenix, Arizona, announced it would push its opening date from 2024 to 2025 – citing skilled labor shortages along with other disorganization and safety concerns. A year or more of lost productivity is not a place anyone wants to be.
It’s a given that every plant wants to operate on time, at peak performance with the lowest risk and minimize the total cost of ownership, but if you don’t implement best practices early on, it’s unlikely you’ll achieve this. This early stage is the ideal time to work with a consulting firm that can help develop the integrated master plan and work with your team to implement and execute.
Assess your risk and develop a plan
Here’s a common scenario: $400 million invested to build a new plant. Commitments made to the board of directors that the facility is going to operate effectively and start turning a profit by a certain date. How can you be confident your project is going to come up to speed and deliver the business returns it’s supposed to? Building a risk-based asset management plan during your plant’s design phase and deploying those asset management plans during commissioning and start are crucial.
This means understanding your risks early on – there could be thousands at any given time, all changing throughout the life cycle of the project. A risk plan can help prioritize investment (and spending) on new assets by first identifying the most critical assets and the risk they pose to the bottom line in the event of a major failure.
Your people aren’t an afterthought
Employees with valuable skills are scarcer than ever, yet recruiting is often left to the project’s later stages. It can take a long time to hire and train workers. The last thing you want to do is stumble across the finish line because you don’t have the right people in place.
You can start this process by developing a comprehensive training strategy. You may have employees who lack the experience needed to operate and maintain your assets effectively or may not understand how to solve problems – this can be a costly, production-halting failure if left unaddressed.
This is also a good time to take an honest look at any existing cultural elements that may not help attract and retain the skilled employees you are looking for. Once you’ve got your workers, you’ll need a plan to reskill, upskill, and retain your labor base.
Setting your plant up for digital manufacturing success
Some would say the solution to our problems is technology – implementing AI programs, sensors, virtual reality, or automation certainly sounds appealing. But technology itself isn’t the fix; it’s the accelerator. The most important part of your digital transformation goals should be putting the right foundations in place. And what better time than before your plant gets up and running?
This means defining how you will manage the life cycle of your assets. Any AI or machine learning technology needs to be trained to optimize results – it needs the correct data and ‘experience’ to calibrate and monitor the contextualized data, and then draw accurate conclusions. This means you can’t simply ‘set it and forget it.’ If you don’t provide the context or calibrate your technology, you won’t set your employees up for a smooth start up.
Shaping the economic landscape for years to come
We’re seeing billions of dollars funneled into building new facilities across the country and manufacturers are being encouraged to relocate their operations back to America. But the decision to build a new plant requires a careful and deliberate assessment of the advantages and risks.
Success stories do exist – large companies that built a new facility, expanded their manufacturing capacity, found and/or retrained workers with the right skills, and created well-defined processes based on years of experience and lessons learned. Other companies may find themselves with little or no experience and unsure of the path forward. If you’re in the latter category, find a consulting partner who has the right knowledge, experience, and tools to help guide you through the process.
For a list of the sources used in this article, please contact the editor.
Rick Wheeler
Rick Wheeler is Vice President of Professional Services at Life Cycle Engineering (LCE). With a broad range of experience in the pharmaceutical, chemical, and nuclear industries, LCE helps organizations in private industry, public entities, government organizations, and the military to improve operational effectiveness.
