The 5 Stages of a Successful Turnaround
The most effective turnaround practices are the ones that minimize downtime by coordinating corrective and preventive activities. The main objective is to complete all essential maintenance and repair work required to ensure the operation runs reliably for as long as possible. The shorter the turnaround, the shorter the loss in production. To help in this goal, we will share the 5 stages of a successful turnaround.
Management Change
It is important to appoint an executive manager to lead the turnaround, as well as eliminate any obstructionists who may hinder the process. Even if your plant has successfully completed turnarounds in the past, there should be a change in thinking as procedures, standards, and technology have all changed. All relevant information should be produced in order to make informed decisions from the condition of every piece of equipment to all personnel and their duties. Management must allocate a reasonable budget for what is needed to be purchased, from parts, to entire machines, to contractors, all while researching the most competitive prices. It also important to set goals that achieve objectives, coupled with incentive-based management responsibility for optimum results.
Situation Analysis
The objective is to determine the severity of your issues and identify the best way to turn them around. Your ultimate goals should include reducing costs, increasing revenue, selling and redeploying assets, and repositioning. Goals should not be out of sync with the turnaround’s direction because it can lead to false-starts, wasted time, and send workers in the wrong direction. It is also essential to understand the life cycle of the operation and how it relates to the chosen strategies.
Emergency Actions
When funds run low, your objective is to gain control of the situation and find the best route to breakeven. Be sure to centralize the cash management function to stop the bleeding. The next step is to review your balance sheet for internal sources of cash, including renegotiating outgoing payments, as well as collecting on accounts receivable. You may also sell unprofitable assets such as equipment, real estate, and other underutilized assets. If you have debt, look into restructuring it in order to minimize interest, total debt, etc. Reexamine your current obligations versus market prices to see if it’s time to make a change. If it comes to it, lay off employees quickly and fairly.
Business Restructuring
The goal is to create profitability through the operations that will remain long-term. Restructure the operation for increased profitability. Ensure your reporting systems are up to date and operationalized to show profitability at each step of the process. Task incentive-based management to motivate employees to get involved and aspire to the stated goals. These should include selling more to existing customers, as well as acquiring new customers.
Return to Normality
Normal does not mean getting back to things as normal. It means establishing a new normal. Normalize all changes adopted in the turnaround to corporate culture to build on competitive strengths and improve your customer’s experience. This includes implementing continuous training to raise the quality of your workforce.
AMACS is a trusted supplier to most process industries including: refining, petrochemical, gas, and chemical. We design and manufacture separation and mass transfer equipment solutions. AMACS also has the ability to advise the correct “replacement in-kind equipment” of trays, hardware, packing, and mist eliminators for towers. Our team is available 24/7 to quickly service planned or unplanned shutdowns while manufacturing from our Houston, Texas facility.