By Craig Nicholson
Here’s our top five guiding principles, providing a framework that will help businesses manage through change with a clear focus on forward looking goals driving specific outcomes.
1. Think with the future in mind
A powerful tool to facilitate forward thinking is to perform scenario analysis planning. This exercise is designed to make a collective team thoughtfully consider what the future will look like by determining key driving factors and developing scenarios of the future. This provides a platform to formulate a plan and actions towards success for the most likely scenarios.
Void of using such forward-thinking tools, an organization’s future will be subject to the vicissitudes of change without being afforded the time to prepare, increasing the risk of unfavorable outcomes and less than optimal solutions.
2. Tackle obsolescence
Power plants require routine maintenance as well as occasional major maintenance and upgrades. Obsolescence occurs when components of the plant cease to be manufactured or are superseded by a newer version. This can be particularly acute for plant control systems that typically have a lifetime of ten years. As asset owners consider long term options, ensuring maintainability and reliability of underlying plant technology is critical for present and future operations. For example, modern digital technologies deployed at a plant level will require a reliable, maintainable and capable plant control system with the fidelity to support current and future data analytics capabilities.
3. Re-gear maintenance agreements
Many asset owners feel that because they are mid term in their maintenance agreement, there’s little they can do to until it expires. Often that is not the case. Such agreements drive significant cost along with risk allocations that influence service provider behavior and may be the difference between a profitable and long-term future or risk of shutdown or asset sale. The long-term service agreement market is constantly evolving, leaving those with aging or renegotiated agreements based on precedence disadvantaged to their peers. See what makes up such agreements and what to look for in our blogs: what’s under the hood and top ten tips for LTSAs
4. Digital transformation
Combined Cycle Gas Turbine Power Plant
With a good understanding of future operations requirements, a digital strategy is a must. Success requires cutting through the BS of any digital strategy and understanding the organizational aspects of such transformations as outlined in our previous blogs. If digital transformation is only about picking a product and implementing it into a portfolio of power plants, best save the capital expense for something better.
5. Ask for help when needed
Asset owners cannot be experts in every field, however, they can tap into expertise as and when needed. A typical strategy is to rely on equipment manufacturers for support, however, the respective goals of each organization are not necessarily aligned, resulting sub optimized results
The benefits of impartial commercial and technical expertise typically come in the form of reduced maintenance costs, mitigated operational risks and avoidance of unnecessary capital expenditures improving overall plant economics. The deck may be stacked against asset owners who infrequently negotiate maintenance agreements or purchase digital products at a premium chasing the wrong KPIs such as increased reliability on an already reliable plant.
Creating the future
Perhaps you are implementing some or most of these principles. Such a framework, will ensure coherence and consistency to an asset or portfolio strategy. We may not know what the future holds, however taking proactive steps to address potential scenarios provides the opportunity to shape the future giving those who do, a sustained competitive advantage.