A New White Paper - Capital Projects Operational Readiness and Business Risks

A New White Paper - Capital Projects Operational Readiness and Business Risks
Author: Bruno Storino

When a company invests in new assets, it makes a strategic business decision to improve its position in the marketplace. Building new facilities-or expanding existing ones-is a response to market needs. Investing in assets or new facilities may be required to launch new products or increase existing capacity. In some cases the nature of the industry requires close proximity to demand; in other cases it may be better to locate a new plant closer to specific raw materials sources.

The objective is to complete the project on schedule, on budget, and to have the new assets commissioned. Once the facility is put into operation, it must fulfill its intended role and deliver what was specified in the business-case strategy throughout its entire lifecycle.

Considerable effort is put forth during project phases prior to commissioning, but it is during the operational lifecycle that the new assets must pay for themselves by fulfilling their role in the market strategy that spurred the investment. Traditionally, the project-execution phase places less emphasis on ensuring optimal utilization of the assets during their productive life. Companies often fail to recognize and address significant operational risks, which results in paying a steep price in the form of less-than-optimal facilities and operational processes.

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