MRO Magazine

Navigating the shutdown approval process


December 14, 2001
By PEM Magazine

A shutdown is often described as "an orchestrated logistical exercise in which workers perform their assigned duties around the clock so as to meet a predetermined start-up deadline". The logistics and magnitude of a shutdown event require going through an approval and planning process well in advance of the actual work itself. In the case of a large shutdown performed every two to three years, planning can start years in advance of the event. Successfully navigating the shutdown approval process requires understanding the corporate approval process and playing the game according to the rules. Make it easy for the approver to say "yes".

Understanding the approval process
The first step in any approval process is to understand the process. If a company supports a quality assurance system such as ISO 9000 or QS 9000, a control document outlining the approval process likely exists. Where no control document exists, the maintenance/planning department or the engineering department will need to determine who is in charge of the shutdown event. The shutdown event coordinator or planner can then be questioned about how to put together a successful shutdown project proposal. A copy of a previously successful shutdown project bid can be used as a template. Larger corporations will usually require a more formal approach to project approval.

Combining two or more projects, and any open work orders on the same decommissioned asset, displays diligence on behalf of the project requesters and will increase a project’s chances for approval. If the shutdown project demands large fiscal and human resources, seek out other departments also planning to perform shutdown work on the same asset. Coordinate the smaller project(s) into the larger project to enhance the return on investment. Similarly, smaller project owners need to seek out and team up with larger project owners, and "piggyback" on their efforts. Many project costs can be defrayed and trimmed as a result of the larger project picking up the cost of decommission/ recommission.

Building a return on investment (ROI) statement
Projects which show a good return on investment represent value are more likely to receive approval. Homework is required to find out how the company gives approval based on project investment returns. For example, Company A may only issue approval to projects that demonstrate a return within two years, while Company B may require a return within six months. Seek out special corporate or government incentives. For example, the corporation may give project priority for initiatives that target energy-reduction or safety in the workplace; governments may also offer program funding or rebate initiatives for environmental or energy program initiatives.


Understanding how a company allocates and uses money within the corporation will also help. For example, Company A may use its maintenance budget allocation funds to sponsor the project, while Company B may choose to capitalize the funding. Successful approval can depend on how the accounting department views the project funding.

Building a successful ROI statement requires the author to carefully map out the project costs and then offset them against the determined consequences of not going ahead with the project. Consequences can include: health and safety issues; costs incurred for breakdown repairs and downtime of equipment (asset downtime rates will need to be assessed if not already known); costs of deteriorated equipment performance until next planned shutdown, and inability to meet present and projected order book, etc. Consequences can also be positioned positively; identify key performance indicators (KPI’s) presently used to measure the organization’s health and estimate the improvement factor due to moving ahead with the project, e.g. increased throughput or uptime, increased equipment effectiveness, improved safety, reduced maintenance requirement, etc.). KPI measures can be tangibly evaluated for inclusion in the ROI statement.

Project work plan
Once the project is proven to be fiscally viable, the next step is to build a pre-project work plan that outlines engineering work requirements, parts and supplies requirements, internal labour and contract labour requirements. The work plan will assist the shutdown coordinator in better determining resource level requirements over the shutdown period.

Parts, supplies and special tool requirements need to be assessed for delivery dates. Long lead-time items obviously must be ordered in good time, therefore projects requiring such items should be approved as early as possible. All proposals should highlight any purchase deadlines in the pre-project work plan.

Submitting a shutdown project for approval is somewhat analogous of applying for a bank loan — approval most often is given to those who understand the requirements and have tailored their plan to answer all possible objections.

Ken Bannister is a Cambridge, ON-based maintenance consultant and long-time contributor to PEM. His column, Bannister on Books can be found in every issue.