The contribution of maintenance to the performance and economic value of your assets

Stork Maintenance Management B.V.

PELC , The Hague April 11th 2005

The contribution of maintenance to the performance and economic value of your

assets

Presentation to European Plant Engineering Life Cycle

Conference

The Hague

April 11th, 2005



Introduction to Stork

Trends & developments in maintenance

Asset Performance Improvement

Overview

“Best in class” maintenance

Integrated Services Contract

Conclusions

Contents



Established in 1827 - World-wide presence today



Investors recognise Stork’s consistent performance

0

5

10

15

20

25

30

jan-02

jul-02

jan-03

jul-03

jan-04

jul-04

jan-05

+180%

EUR

Stork Share Price growing strongly

Revenue $2,3bln

Operating profit $150mln

Employees 12500

Market capitalisation $1,2bln

Net cash (debt) $142mln

Major Locations Benelux, USA,Caribbean, Middle East

Solid, profitable business



Stork comprises four core businesses – Technical Services the largest

$1,011mln

6,300

$189mln

800

$629mln

3,200

$259mln

1,500

$229mln

700

Technical Services Aerospace Prints

Food Processing

Other

$2,316mln

12,500

Revenue

Emp.

Data: 2004



We deliver a comprehensive range of value added services to our customers

Technical Services

Program Management

Project Management

Maintenance Management

Power Services

Electrical & Instrumentation

Engineering & Construction

Specialist Services

Integrated Services Contracts

Shutdowns, turnarounds, modifications, plant relocations

Asset performance improvement, CMMS, RCM, consulting,change management

Steam and Gas turbine solutions

Medium & High Voltage Services, Industrial automation

Conceptual design, FEED, Construction and Fabrication

Integrity testing, Calibration, Rotating Equipment,, Safety, equipment rental



Energy and utilities

Other

Leading customers across most industries – a strong track record in Oil & Gas

Oil, Gas

Chemicals



Stork (GLT) manages long term upgrade of largest onshore gas production facilities in Europe

Engineering and construction

Maintenance

“We are extremely satisfied with the performance and teamwork. All work is executed according to plan. It is worth noting that by now over 1000 man years work has been carried out without a lost time injury” Henk Niezen, NAM project manager

8 year Contract signed in 2002 - Value >EUR100mln/year

Stork-NAM working relationship since 1996

Total investment in upgrades EUR1,95bln

Project Scope Project Description



Stork (AJS) currently managing the only cross- border Integrated Services Contract in the North Sea

Engineering and construction

Maintenance

Services

Projects

Contract management of projects

7 year ISC - Value >EUR100mln/year

~ 50 offshore production locations &2 gas treatment centers

Support facilities in UK and NL

Project Scope Project Description






Overview



Conclusions

Contents




Global economics are forcing an increased emphasis on asset performance improvement

Lower cost and increased reliability/availability Without compromising SHEQ

Reduced amount of investment in building new plants

Emphasis on performance of existing assets

EPC companies EPC Maintenance providers

Asset managers are seeking to apply proven concepts, best practices and new technologies

Looking for new innovative ways to improve Maintenance and improve cash flow

Owners are focussing on core competences and are making increased use of outsourcing and partnering with maintenance providers







Overview



Conclusions

Contents

Asset Performance improvement



Improve Cash Flow

Relative Impact:

High

Asset Performance

@ The Right Price- (sub)contract costs -

CASH

Do the Right Things - effectiveness -

Do the Things Right- efficiency -

The Stork Way to Asset Performance Improvement

PROformer


Reliability Centred Maintenance

Workflow management

Turn-around management

Subcontractor management

Low



Improve Asset Performance

Avalaible TimeProd.closedProduction open

Available time for production Other No Prod.Operational time Stand still

Nett operational time Speed loss.

Effect. Operat. time Qual.Loss

Effective OEE are often as low as 50 – 60 %

• Ice cream 75% 86%, Production Line (TPM)

• Natural gas 94% 98,2%, Installation Availability

• Bottling line 75% 85% Production Line

• Pet food 75% 85% Prod. Line, Maint.Costs. -15%

Increases of OEE with 10 – 20% can be achieved

OEE



The contribution of maintenanceto the asset performance and economic value

of the Boeing 747

100 fh

750 fhIncreases in inspection intervals are based on

analysis of inspecton findings, operational info and

modifications

technical departure reliability

down-time A-check

24 hrs

8 hrs

80%

97%

example: Boeing 747

time1972 2002



PROformer(ROI) % VALUE

18% -5% poor prod.qual.cust.205 2074

POTENTIAL EV EUR Number of units increase %4.631.981 82114560 82114560 0% number out of product

0 90112

Return (income) EUR3.525.917 -1.106.064

Net Revenue EUR37.719.681 37.215.181

Product Costs EUR34.193.764 38.321.245

Personnel costs Production costs EUR2.508.718 3.600.000 31.031.195 32.762.445 OVERALL

Asset Uti lizat ion Plan.% compl.handl.costs56% 80% Maintenance costs EUR 51.373 540.928

Inventory inbound log. EUR 364.244 394.800 liabil ity costsavailability 1.150.000 2.300.000 1.027 10.368

0,95 0,72 Inventory costs guarantee costscapacity Inventory outbound log. EUR 844.000 2.300.000 616 6.221

0,97 0,9 3.070.000 9.200.000quality Cost invested capital TOTAL 53.017 557.517

0,999 0,99 1.954.325 2.864.000OEE

0,92 0,64 COSTS

P ro cu rem e nt In bo u nd Lo g istics

O u tbo u nd Lo g istics

O per atio ns & Ma in te n an ce

P r o du ct S up po r t

S ale s

Technical quality

Timing quality

Reputation quality

Relation quality

Price

Value Proposition

Service quality

PROformer analyses asset performance across value chain






Overview



Conclusions

Contents




Blueprint for maintenance processes:the essentials for a best in class maintenance strategy and organisation

01096039-0001

Quality, Health, Safety, Environment and Well-being

(PGVP)

Quality, Health, Safety, Environment and Well-being

(PGVP) PGVP-PGVP Management system - VCA certificering-Procedure / WorkinstructionChemicals on site-Procedure / Workinstructionwaste disposure

PGVP-PGVP Management system - VCA certificering-Procedure / WorkinstructionChemicals on site-Procedure / Workinstructionwaste disposure

-Define VGWM plan-Define Toolbox / WVO planning-WorkinstructionsQC-QC plans

-Define VGWM plan-Define Toolbox / WVO planning-WorkinstructionsQC-QC plans

-Toolbox meeting- SMAT rounds- WVO meeting- Review QCP’s-Review QC documents

-Toolbox meeting- SMAT rounds- WVO meeting- Review QCP’s-Review QC documents

Evaluate PGVP-Control of waste disposure-Control of chemicals on site-Entrance procedures-Job descriptions-Meeting schedule-Auditing of processes

Evaluate PGVP-Control of waste disposure-Control of chemicals on site-Entrance procedures-Job descriptions-Meeting schedule-Auditing of processes

Update PGVP plan-Update schema Toolbox / WVO-Review of chemicals on site

Update PGVP plan-Update schema Toolbox / WVO-Review of chemicals on site

-Prepare job descriptions-Prepare communication matrix-Define organisation structure-Define consignment agreement

-Prepare job descriptions-Prepare communication matrix-Define organisation structure-Define consignment agreement

Structure organisation-Communication internal-Communication Stork - Nam-Communication Stork - third parties

-Consignment service-Supervision on site, housekeeping included- Meetings

Structure organisation-Communication internal-Communication Stork - Nam-Communication Stork - third parties

-Consignment service-Supervision on site, housekeeping included- Meetings

Maintenance organisationMaintenance organisation

Organisation performance-Change Board (unsolved conflicts)-Competence philosophy

Organisation performance-Change Board (unsolved conflicts)-Competence philosophy

Maintenance processMaintenance process

MRP

Maintenance conceptRCM (FMEA) Dexter activity register

-Legal obligations-NEN3140 Report-RBI Report- IPF Report

MRP

Maintenance conceptRCM (FMEA) Dexter activity register

-Legal obligations-NEN3140 Report-RBI Report- IPF Report

Planning of activities-Create PO plan (SAP) including clustering-Define Shutdown organisation-Determine shutdown package, EXOP’s& modifications included

Planning of activities-Create PO plan (SAP) including clustering-Define Shutdown organisation-Determine shutdown package, EXOP’s& modifications included

Prepare workpackage- Check lists- Estimate costs-Documents (vendor / design)-Work permit System- Define TRA’s-parts (purchase / spares)- tools- personell- QCP

Prepare workpackage- Check lists- Estimate costs-Documents (vendor / design)-Work permit System- Define TRA’s-parts (purchase / spares)- tools- personell- QCP

Evaluate work packages- Review task lists-Notification research

Evaluate work packages-Review task lists-Notification research

-Reports-Improve workpackage-Datahistorian- Design-Update MRP & MYP

-Reports-Improve workpackage-Datahistorian- Design-Update MRP & MYP

Evaluate CP&L suppliers performance-Turnover rate-Delivery time- Reliability- Accessability- Controllability

Evaluate CP&L suppliers performance-Turnover rate-Delivery time- Reliability- Accessability- Controllability

Reports updateReports update

Finance & cost controlFinance & cost control

-Lump Sum prizes-CBA estimates & unit rates- MEB-Budget RFM-01 t/m RFM-10-Make plan for costs registration-Budget 2003-2007

-Lump Sum prizes-CBA estimates & unit rates-MEB-Budget RFM-01 t/m RFM-10-Make plan for costs registration-Budget 2003-2007

-Auditing of processes-Management reports-Evaluate organisation-Evaluate structure

-Auditing of processes-Management reports-Evaluate organisation-Evaluate structure

-Update organisation chart and staffing-Update consignation agreements

-Update organisation chart and staffing-Update consignation agreements

Execute work package- site access- workpermit-as built job order

Execute work package- site access- workpermit-as built job order

Contracting, Procurement and Logistics

(CP&L)

Contracting, Procurement and Logistics

(CP&L)

CP&L philosophy-Define CP&L plan-Procedure / Workinstructionmaterial / ordering of services

CP&L philosophy-Define CP&L plan-Procedure / Workinstructionmaterial / ordering of services

-Stock material plan-Spares management-Determine material criticality -Material management-Subcontract qualification plan-Warehousing plan-Transport plan

-Stock material plan-Spares management-Determine material criticality -Material management-Subcontract qualification plan-Warehousing plan-Transport plan

Procure / acquire / store spares & materials-Use NAM contracts -Finalize Contracts services / material -Materials standards / traceability-Warehousing of material

Procure / acquire / store spares & materials-Use NAM contracts -Finalize Contracts services / material -Materials standards / traceability-Warehousing of material

-Update CP&L plan-Update service agreements-Update warehousing plan

-Update CP&L plan-Update service agreements-Update warehousing plan

Finance Philosophy-Handling of invoices-OPS support budget

Finance Philosophy-Handling of invoices-OPS support budget

-Costs & time registration in SAP-Auditable system- CBA final-As built workpackages-Budget Management & Cost Control-Monthly reports

-Costs & time registration in SAP-Auditable system- CBA final-As built workpackages-Budget Management & Cost Control-Monthly reports

Evaluate Finance philosophy-Contract reports-Performance Incentives (IF1 t/m IF4)-Budgets RFM 01 till RFM 10

Evaluate Finance philosophy-Contract reports-Performance Incentives (IF1 t/m IF4)-Budgets RFM 01 till RFM 10

-Update RFM 01 till RFM 10-Update requirements w.r.t. cost control

-Update RFM 01 till RFM 10-Update requirements w.r.t. cost control

Document control philosophy-Document control philosophy-Define cluster data set-Management system procedures-Document / Certificate control, structure & accessability-Structuring archive-Documentation Procedure / Workinstruction -Application management (Matrix, SAP, CDW, etc.)-Change Procedure / Workinstruction

Document control philosophy-Document control philosophy-Define cluster data set-Management system procedures-Document / Certificate control, structure & accessability-Structuring archive-Documentation Procedure / Workinstruction -Application management (Matrix, SAP, CDW, etc.)-Change Procedure / Workinstruction

Common-Equipment history-Hand-over register / documents-Manuals

Inspection-Inspection files control- ‘Stookboek’VISA-Knowledge & function of inspection

Common-Equipment history-Hand-over register / documents-Manuals

Inspection-Inspection files control- ‘Stookboek’VISA-Knowledge & function of inspection Common

-Archiving documents / drawings / jobs-Archiving jobs-As built documentation (on site)-As built drawings (on site)-Usage of applications - Usage of commisioningcheck sheets

Inspection-Archiving documents / drawings / jobs-Determine inspection stops

Documentation-Check documents on-site

Common-Archiving documents / drawings / jobs-Archiving jobs-As built documentation (on site)-As built drawings (on site)-Usage of applications - Usage of commisioningcheck sheets

Inspection-Archiving documents / drawings / jobs-Determine inspection stops

Documentation-Check documents on-site

Evaluate inspection- Integrity inspection-Technical integrity report

Evaluate inspection-Integrity inspection-Technical integrity report Common

-Keep archive up-to-date-Improve as built procedure-Keep safeguarding memorandum up-to-date

Inspection- Close-out of inspection stops

Common-Keep archive up-to-date-Improve as built procedure-Keep safeguarding memorandum up-to-date

Inspection- Close-out of inspection stops

Information Management & Technology

(IM/IT)

Information Management & Technology

(IM/IT)

IM/IT philosophy w.r.t. maintenance-IM/IT plan- Back-up philosophy

IM/IT philosophy w.r.t. maintenance-IM/IT plan-Back-up philosophy

-Set up IM/IT plan w.r.t. maintenance-Working practices Maintenance w.r.t. applications & program- Back-up management

-Set up IM/IT plan w.r.t. maintenance-Working practices Maintenance w.r.t. applications & program- Back-up management

-Support of applications / programs office-Support of applications / programs on site- Make Back-up’s -Analyse process data-Report on technical performance

-Support of applications / programs office-Support of applications / programs on site-Make Back-up’s -Analyse process data-Report on technical performance

-Update IM/IT plan w.r.t. maintenance-Update IM/IT plan w.r.t. maintenance

Configuration management philosophy-Equipment history control (including legal obligations)-Asset management / information

Configuration management philosophy-Equipment history control (including legal obligations)-Asset management / information

-Material management-BOM (Bill Of Material) -Certificeringtools & service equipment-Equipment data in SAP-Assignment of equipment to partners-List NAM equipment / materials / tools

-Material management-BOM (Bill Of Material) -Certificeringtools & service equipment-Equipment data in SAP-Assignment of equipment to partners-List NAM equipment / materials / tools

-Configuration management-Identification of critical equipment-Update Asset information-Asset / Tag information -Equipment record cards

-Configuration management-Identification of critical equipment-Update Asset information-Asset / Tag information -Equipment record cards

-Spare parts philosophy -Selection of spare parts

-Spare parts philosophy -Selection of spare parts

-Control on site of tools & service equipment certification-Control on site of tools & service equipment certification

Evaluate IM/IT tools & systemsEvaluate IM/IT tools & systems

-Set-up Maintenance year plan / 5-year plan-Set-up Maintenance year plan / 5-year plan

-Spares list -Spares list

Inspection assurance system-NAM ‘inspectie zorgsysteem’requirements

Inspection assurance system-NAM ‘inspectie zorgsysteem’requirements

Management system-Procedures / Workinstructions

Management system-Procedures / Workinstructions

Evaluate QC documentation-QCP Equipment inspection files-Prepare annual inspection file

Evaluate QC documentation-QCP Equipment inspection files-Prepare annual inspection file

Update inspection assurance systemUpdate inspection assurance system

Update Management systemsUpdate Management systems

Condition Based Maintenance (CBM)-Maintenance Monitoring Centre (MMC)-Define systems & requirements

Condition Based Maintenance (CBM)-Maintenance Monitoring Centre (MMC)-Define systems & requirements

-Define / update CBM requirements-Define / update CBM requirements

Operational Support (OPS)-Definition and evaluation of improvements-Controlling and maintaining ‘As Built’ drawings-Handling and controlling requests for design changes

Operational Support (OPS)-Definition and evaluation of improvements-Controlling and maintaining ‘As Built’ drawings-Handling and controlling requests for design changes

New

MM 1-06SGSP-301

MM 0-03MM 1-07MM 1-17

MM 1-03

MM 1-08

MM 1-31

MM 1-12

MM 1-03

MM 1-15MM 1-20MM 1-21

SGSP-303

MM 1-02MM 1-03

MM 1-18

MM 1-05MM 1-10MM 1-30MM 1-26SGSP-305

SGSP-302

MM 1-25MM 1-19MM 1-28SGSP-107

SGSP-306SGSP-204

MM 1-16

MM 1-13

MM 1-27MM 1-11MM 1-22MM 1-24

MM 1-29

SGSP-508 SGSP-509

MM 1-07MM 1-14SGSP-301

SGSP-521 SGSP-522

PLAN DO CHECK ADJUST PROCES

Organisation

&

Processes

(SM3)

Quality model(EFQM)

Value chainInvoerlogistiek Produktie&onderhoud Uitvoerlogistiek Verkoop ServiceInkoop Inboundlogistics

&Production

MaintenanceSales ServicePurchasing

Outboundlogistics



Organising the Maintenance Process

MaintenanceDelivery

Reliability Centred Maintenance(continuous development)

task 1

task 2

task 3

task 4

task 5Description- objectcode- discipline- interval

FMEAPlanning

Gate-keeper

Workflow management

Work-instructions

Break– down

CMMS



The maintenance scan:a structured approach to establish the potential for asset improvement

Areas of Improvement Potential

Reliability More revenue from production due to less and shorter breakdowns

Availability More revenue from production due to less and shorter shut-downs

Costs

Effective; meet target Efficient; less resources, less waste Quality; less re-work

Risks HSE Assets and customer performance Image



Maintenance scan results will be linkedto the SM³ model for rapid prioritisation

PLAN DO CHECK ADJUST

1 Maintenance strategy 55% 40% 46% 63%2 Asset managment 74% 54% 46% 77%3 Maintenance program / RCM 48% 70% 11% 0%4 Workflow management 40% 53% 29% 13%5 1st line maintenance 13% 30% 0%6 Shutdown 64% 71% 38% 3%7 Materials management 70% 87% 40% 75%8 Facility management 95% 97% 100% 100%9 Subcontracting 47% 64% 75% 68%10 Human resource management 45% 58% 0%11 Master data 22% 20%12 SHEQ 93% 91% 90% 87%13 Financial 50% 76% 50% 0%



Maintenance Templates

MMS = Maintenance Management System Andere gangbare afkortingen:

OBS;OIS;CMMS;EAM

Actie Omschrijving van de activiteit(-en) om de storing

te verhelpen/herstellen

Afdeling Zelfstandig opererende unit binnen een bedrijf

met financiele verantwoordelijkheid Voorbeelden: TD, Produktie, logistiek, etc Voorwaarde: elke afdeling heeft minimaal een

Kostenplaats

Discipline Onderverdeling personeel a.h.v. technische

discipline Op discipline niveau worden verrekeningstarieven

Leadership

People

Management

Policy & Strategy

Resources

Processes

People

Satisfaction

Customer

Satisfaction

Impact on

Society

Business

Results



Performance Monitoring

Standard Management Reports

Modules

Maintenance Accounting Purchasing Warehouse Labor

2001 Q 1 2001 Q 2 2001 Q 3 2001 Q 4

01: Small Projects > 50000

48: Reparatie uit PM

51: Storingen

53: Planmatig Onderhoud (PM)

54: Prod. Service Support

55: Maintenance Serv. Supp.

56: Small Project < 50000

59: Studie

60: Small Projects Maintainability

70: Calamiteiten

0 0 0 0

211 91 121 134

1190 1415 1538 1348

2308 2117 2007 2004

46 45 83 58

25 35 37 95

19 21 65 66

0 0 0 0

0 0 0 0

0 0 0 0

All Types Of Work 3824 3738 3875 3729

2001

0

557

5491

8436

232

192

171

0

0

0

15166

2001 Q 1

2001 Q 22001 Q 3

2001 Q 4No Type Of Work

70: Calamiteiten60: Small Projects Maintainability

59: Studie

56: Small Project < 50000

55: Maintenance Serv. Supp.

54: Prod. Service Support

53: Planmatig Onderhoud (PM)

51: Storingen

48: Reparatie uit PM

01: Small Projects > 50000

0400

8001200

16002000

2400

Wo Counter






Overview



Conclusions

Contents




How do we get the organisations of the customer and the service provider work jointly

towards asset performance improvement?

Value creation

Promotion of best practices

Sharing of common processes

Integrated team

Planning integration

Optimisation and management

of supply chain

HSE performance

Cost reductions Them – us culture Double work Misaligned interests and

objectives Managing the KPI’s instead of

the business No attention given to transition/

change management Customer dissatisfaction

?

A B



Business as

Usual

Time

Value Generation Get the basics right first

Manage Integrity & SafetyNo Compromises

Perfect Delivery

Joint Review & Improve Loop

Innovation

ISC objective is delivery excellence and realisation of continuous improvement

Transition Transformation Delivery Excellence

Shorten Steepen Extend

Maturity of relationship

A

B



Integrated team:focus on delivery and continuous improvement

NL DeliveryManager

UK DeliveryManager

Asset WestDeliveryT/Leader

AssetSouthDeliveryT/Leader

Asset CentralDeliveryT/Leader

Asset NorthDeliveryT/Leader

As

se

t W

es

t d

eli

ve

ry t

ea

ms

As

se

t S

ou

th d

eli

ve

ry t

ea

ms

As

se

t C

en

tra

l d

eli

ve

ry t

ea

ms

As

se

t N

ort

h d

eli

ve

ry t

ea

ms

Delivery Engineers

ISC ProjectDirector

Delivery Engineers

ISC CapitalProjectsManager

Individual CapitalProject

Managers

NL

& U

K C

ap

ita

l P

roje

cts

BusinessPerformance

Manager

SHEQ Manager

CloseOut

T/Leader

IM/ITT/Leader

SupplyChain

Manager

FabricServices

TechnicalService

Manager

ConstructionT/Leader

CostPlanningT/Leader

FinanceManager

HRManager

CommercialT/Leader

EngineeringT/Leader

MaintenanceManager

KPI’sScorecardsBusiness ReportingPerformance Measurement and ImprovementContractual Alignment

Business PlanningCost Management and InformationOperational PlanningProgress Reporting & AFC’s

Information and Knowledge ManagementDocument ManagementSystems Alignment and Development

Safety Management and GuidanceQuality System ManagementOccupational Health ControlSHEQ Improvement Co-ordination

Operational ProcurementSub-contracts management and improvementMaterials managementLogistics Interface

Maintenance EngineeringMaintenance Strategy and ChallengeBest Practice ConduitAnalyse and Improve

Process and Procedural ManagementResource managementSpecialist Skills Pool ManagementTechnology Enhancement and Challenge

Process and Procedural ManagementCAT Team Leadership and DevelopmentModifications Implementation

ScaffoldingPaintingInsulationArchitectural

Close Out - Modifications- Maintenance Input- SAP Updates- Punch-lists

Mo

dif

icat

ion

sM

ain

ten

ance

Op

erat

ion

al S

up

po

rt

Mo

dif

icat

ion

sM

ain

ten

ance

Op

erat

ion

al S

up

po

rt

Mo

dif

icat

ion

sM

ain

ten

ance

Op

erat

ion

al S

up

po

rt

Mo

dif

icat

ion

sM

ain

ten

ance

Op

erat

ion

al S

up

po

rt

IM / IT

Cost/Planning

Construction

Engineering

Fabric Services

Supply Chain

SHEQ

Bus Performance

Maintenance

Close Out






Overview



Contents

Conclusions



Global economics are forcing an increased emphasis on performance improvement of existing assets

Best in class maintenance significantly contributes to better business results

Asset performance improvement Reduction of maintence costs

Partnership i.e. Integrated Service Contracts provide a sound basis for achieving asset performance improvement

Conclusions



Thank You !Thank You !

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