Applying PMBOK to Manage Shutdowns, Turnarounds and Outages


Project Cost Management


Turnarounds are notorious for overrunning the budget. Part of the problem, as mentioned earlier in the Scope Planning section, is that budgets are rarely based upon the detailed plans/estimates for the scope. Many turnarounds have failure predetermined! Should budgets be based upon a detailed plan (or at least cover the estimate for it), turnaround managers have a reasonable basis for managing costs according to the formula used in EPC projects, as laid out by the PMBOK:

  • influencing factors that create changes to the cost baseline to ensure that changes are agreed upon
  • determining that the cost baseline has changed
  • managing the actual changes when and as they occur

At the end of a turnaround, the final scope of the execution usually encompasses several categories of work:

  • Known scope (planned/estimated)
  • Anticipated repairs (may or may not have been planned/estimated)
  • Unanticipated repairs (not planned/estimated)
  • Unauthorized work (not planned/estimated)
  • Cancelled work (planned/estimated but culled during execution)

So, prior to execution, the turnaround manager may have a budget set including known scope, anticipated repairs and some contingency for the remaining items. Because most indirect costs (not necessarily material costs though) are keyed off of the direct labor costs, the key to successful cost control in a turnaround is execution control (keeping resources productive) and scope management (balancing add-ons against non-critical work).

Earned Value Management

In most cases, it is very difficult to obtain a meaningful earned value analysis in a turnaround. There are several problems that conspire to frustrate the system:

  • The process for capturing and approving actual hours usually lags the progress updates by at least one shift if not two or three
  • The application of the correct work order / cost code number on timesheets is poor
  • Unauthorized work is charged to existing work orders / cost codes but not captured for planning / estimating

Where earned value analysis is conducted, it may be most meaningful to compare numbers broken out by resource type instead of by work order / cost code. In this fashion, managers may have a some measure of the productivity of the resource relative to the schedule.


Next Page


Authored by Bernard Ertl, Vice President, InterPlan Systems

Bernard Ertl has a bachelor’s degree in Computer Science and extensive field experience planning and managing turnarounds in the oil refining and petrochemical process industries.

Applying PMBOK to Manage Shutdowns, Turnarounds and Outages was also published in Maintenance and Asset Management Journal Vol 20, No 3, Autumn 2005.