The immediate reaction of most asset and infrastructure operators in response to Covid-19 was setting up a business continuity team. This team will have reviewed the operational set up of their organisations under different Covid-19 scenarios, and will have developed an understanding of where key operational risks to continuity of operations lie. We are now weeks into the crisis, and it is time to take a step back, review the status of operations contingency plans and ensure nothing was missed out in the immediate response.
Asset and infrastructure industries are particularly challenged by Covid-19: they operate complex and —in some cases—critical national infrastructure and plants, and their operations are typically heavily engineering-oriented and require continued on-site availability of competent technical and engineering resources to enable safe operations-management and control. Plants cannot temporarily be closed, staff cannot always physically be isolated from each other, nor can all operational activity be managed remotely or executed from staff’s living rooms.
These working environments present particular risks and challenges. An outbreak of Covid-19 at one of the sites would have a severe impact on ongoing production operations and in the worst case, require a plant shutdown. Not only would this lead to a loss in production and revenue; the impact could ripple through other industries and organisations further downstream.
The quality of operational resilience and business continuity plans that infrastructure and asset operators are putting in place will determine how businesses will get over the next weeks and months. Will Covid-19 be remembered as ‘just a bruise’, a black eye, a major inconvenience or a catastrophic event?
Our energy and resources team has collated the key questions that asset and infrastructure operators need to consider when taking stock of the setup of their business continuity provision, the risks they have addressed and the contingency plans they have put in place:
Key risks and contingency planning
Critical operations and business manning
Operators need to ensure the continued provision of critical operations and business manning, despite travel restrictions and the potential of a Covid-19 outbreak at one of the sites, which would subsequently require affected staff members and those who have been in contact to be isolated. Consideration should be given not only to the number of resources, but also to specific critical competencies — often required under regulation.
- What are critical operational and business management roles?
- What are the minimum business and operations manning and competency requirements to ensure ongoing and safe asset operations?
- What are the risks to business and operations manpower and shift provision; are contingency resource plans in place?
- Who are contingency providers that can ensure continued manpower availability? Can short-term contractors be leveraged, and do they have the required competencies and certifications?
Continuity of 3rd party providers
It is not uncommon in asset and infrastructure industries for 35% to 70% of engineering and technical operations-resources to be outsourced to 3rd party service providers. The risk of any of these external resources no longer being able to support can have a detrimental impact. Not only that, the ongoing viability and sustainability of critical service providers needs to be monitored continuously, as Covid-19 puts increasing pressure on the financial viability of businesses.
- Which operations activities depend on 3rd party service providers?
- Which 3rd party providers are business-critical? What is their current situation, and what is the impact of Covid-19 on them?
- What are the business sustainability and service assurance plans of 3rd party providers?
Materials & logistics
With supply chains for engineering equipment and materials reaching across the globe, and with the pandemic sweeping through countries and continents, there is a risk that businesses will experience delays and constraints in the supply and movement of materials. Asset and infrastructure operators therefore need to understand their dependencies and upcoming needs for equipment and materials, and ensure plans are in place to provide ongoing availability and supply.
- What materials and supplies are operations- and safety-critical?
- What are the current inventory levels and equipment-certifications?
- Are these materials and supplies still available for purchase; what future restraints might affect their supply? What are the lead times to substitute them?
- What impact does a potential disruption to transportation and logistics have? What emergency logistics plans are in place?
Outbreak and emergency response
The consequences of an outbreak of Covid-19 within an operational plant environment, especially if it is physically and structurally constrained (e.g. an offshore oil platform), could be significant. While the provision of medical support and transportation of infected staff onshore will naturally be of immediate concern, plans must be in place how to quickly determine and mitigate the impact on wider operations and manning:
- What are the risks and what is the potential impact of a Covid-19 outbreak within the operational environment?
- Are plans for the management, transportation and isolation of infected staff in place?
- What processes are in place to understand the impact on the wider operations team and manpower provision?
- What—if any—are the requirements for plant sanitisation?
- How would emergency response plans need to change under current Covid-19 restrictions in the event of an operational incident, e.g. emergency response team formation and interaction?
Plant throughput disruption
In the worst-case scenario, where plant operations and throughput are disrupted, operators need to understand the impact on their own business in terms of revenue disruption and financial stability, as well as the impact on downstream customers in terms of any contractual implications and on their operations and sustainability.
- What are the risks of a potential operations and throughput disruption?
- What is the impact on your business, e.g. revenue loss, contractual commitments and penalties for non-supply?
- What is the impact of an operations disruption on downstream customers?
The immediate response of asset and infrastructure operators to Covid-19 was setting up a business continuity team to review the business and operational set up, and to develop an understanding of the key sources of operational risks. Several weeks into the crisis, and with no end in sight, business continuity operations may well last for many months to come. Now is the time to review operations contingency planning, iron out any potential shortcomings and ensure targeted response teams with representation from across the business are in place to ensure risks are being managed. Similarly, organisations need to review their management systems and how business and operations processes are supported, managed and governed, given many of the traditionally office based resources are now working remotely.
How Baringa can help
We continue to support clients across all sectors to navigate through this personally and economically challenging time. All Baringa consultants have the capability to work remotely, our tried-and-tested collaboration tools make interactions with each other and our clients seamless, and our approaches and methodologies have been adapted for virtual execution where necessary.
Please contact us if you need support to plan or execute your business continuity programs. Adrian Chapman, Gavin Hall, Nick Tallantyre and Matt Papachristou from our Energy and Resources team are looking forward to hearing from you.