Ahead of the 11th Chem Petrochem & Refinery Shutdowns and Turnarounds Conference, which takes place from 30 July 30 to 1 August in Austin, Texas, US, marcus evans spoke with James Wright, Senior Manager Capital Procurement at Nutrien about procurement in turnarounds and shutdown.
Who are the key stakeholders to interface with when making procurement decisions for turnarounds and shutdowns?
Key stakeholders are all involved parties at that facility – safety, QA/QC, engineering, maintenance, operations, and procurement. All too often, procurement is not at the table. Most people think procurement is simply a matter of ‘issuing a PO’. In reality, procurement is an exercise in risk management that needs to be started as soon as possible in the planning process – developing contracting strategies, firming up SOW’s, engaging the right suppliers, performing either direct negotiation or a bidding exercise, putting proper contracts in place, then managing those contracts so the facility gets its desired outcome(s).
How do procurement efforts in turnarounds and shutdowns differ, if at all, from other maintenance and capital projects?
Typically the procurement efforts during a turnaround/shutdown are all about the ‘right now’. A widget is needed right away, usually from the other side of the planet. Or a supplier can’t provide a critical service and tells you 24 hours before they are due to arrive at site. TAR buying is always exciting and ever changing. Usually, it is the most exciting and most horrible experience a buyer can have. All at the same time. Project procurement, which usually involves procuring goods or specialised services that need to be installed or executed during a shutdown. You are working towards a date in the future that usually doesn’t move. All engineering, fabrication, logistics, supply of labour, etc needs to be done with the end date in mind. The closer the date gets, the more you struggle to keep adding value to your organisations. Once the actual TAR date arrives, all goods should be ready, service providers engaged and the focus shifts to executing the TAR. While the procurement folks move on to other projects. It is no less exciting but the timeline in project procurement tends to be weeks and months. Not hours or minutes.
What is one piece of advice you would suggest to turnaround managers to maximise capital procurement efforts?
Engage in procurement early. Invite them to the table as soon as the dates are established for the TAR. You need their help to understand procurement cycle time within your organisation, what services providers are able and willing to work with you, refine SOW’s for bidding and contracts – everything. The tendency is for technical folks to plan the TAR, then call procurement. This can result in shocks when the lead times for equipment are assumed, or you are working off old cost models for service providers. The earlier the better for engagement is the advice I always give to my client groups.
What is one interesting item about your professional career or current role that one might not know from looking at your bio or LinkedIn profile?
Almost 20 years ago I started my career in supply chain as a warehouse manager. I still have a valid forklift operators license. Not many corporate managers have this. It guarantees me employment at some level (at least that is what I tell myself).
What are you most looking forward to at the 11th Chem/Petrochem & Refinery Shutdowns and Turnarounds Conference?
Hearing how other organisations utilise their procurement resources. Helping to understand the specific issues and solutions that have been arrived at in the industry. Networking with others. Listening to all the great speakers that are lined up.
Read the article online at: https://www.worldfertilizer.com/nitrogen/16072019/qa-with-nutrien/
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The companies have signed a non-binding MOU to explore potential business partnerships related to production and decarbonisation of local fertilizer and industrial products.