DEP 70.10.90.11-Gen.pdf

MANUAL SPARE PARTS DEP 70.10.90.11-Gen. November 1995 DESIGN AND ENGINEERING PRACTICE This document is confidential. Neither the whole nor any part of this document may be disclosed to any third party without the prior written consent of Shell International Oil Products B.V. and Shell International Exploration and Production B.V., The Hague, The Netherlands. The copyright of this document is vested in these companies. All rights reserved. Neither the whole nor any part of this document may be reproduced, stored in any retrieval system or transmitted in any form or by any means (electronic, mechanical, reprographic, recording or otherwise) without the prior written consent of the copyright owners. PDF created with pdfFactory Pro trial version www.pdffactory.com PREFACE DEP (Design and Engineering Practice) publications reflect the views, at the time of publication, of: Shell International Oil Products B.V. (SIOP) and Shell International Exploration and Production B.V. (SIEP) and Shell International Chemicals B.V. (SIC) The Hague, The Netherlands, and other Service Companies. They are based on the experience acquired during their involvementwith the design, construction, operation and maintenance of processing units and facilities, and they are supplemented with the experience of Group Operating companies. Where appropriate they are based on, or reference is made to, national and international standards and codes of practice. The objective is to set the recommendedstandard for good design and engineeringpractice applied by Group companies operating an oil refinery, gas handling installation, chemical plant, oil and gas production facility, or any other such facility, and thereby to achieve maximum technical and economic benefit from standardization. The information set forth in these publications is provided to users for their consideration and decision to implement. This is of particular importance where DEPs may not cover every requirement or diversity of condition at each locality. The system of DEPs is expected to be sufficiently flexible to allow individual operating companies to adapt the information set forth in DEPs to their own environment and requirements. When Contractors or Manufacturers/Suppliers use DEPs they shall be solely responsible for the quality of work and the attainment of the required design and engineering standards. In particular, for those requirements not specifically covered, the Principal will expect them to follow those design and engineering practices which will achieve the same level of integrity as reflected in the DEPs. If in doubt, the Contractor or Manufacturer/Supplier shall, without detracting from his own responsibility, consult the Principal or its technical advisor. The right to use DEPs is granted by SIOP, SIEP or SIC, in most cases under Service Agreements primarily with companies of the Royal Dutch/Shell Group and other companies receiving technical advice and services from SIOP, SIEP or SIC. Consequently, three categories of users of DEPs can be distinguished: 1)Operating companies having a Service Agreement with SIOP, SIEP, SIC or other Service Company. The use of DEPs by these Operating companies is subject in all respects to the terms and conditions of the relevant Service Agreement. 2)Other parties who are authorized to use DEPs subject to appropriate contractual arrangements. 3)Contractors/subcontractors and Manufacturers/Suppliers under a contract with users referred to under 1) or 2) which requires that tenders for projects, materials supplied or - generally - work performed on behalf of the said users comply with the relevant standards. Subject to any particular terms and conditions as may be set forth in specific agreements with users, SIOP, SIEP and SIC disclaim any liability of whatsoever nature for any damage (including injury or death) suffered by any company or person whomsoever as a result of or in connection with the use, application or implementation of any DEP, combination of DEPs or any part thereof. The benefit of this disclaimer shall inure in all respects to SIOP, SIEP, SIC and/or any company affiliated to these companies that may issue DEPs or require the use of DEPs. Without prejudice to any specific terms in respect of confidentiality under relevant contractual arrangements, DEPs shall not, without the prior written consent of SIOP and SIEP, be disclosed by users to any company or person whomsoever and the DEPs shall be used exclusively for the purpose for which they have been provided to the user. They shall be returned after use, including any copies which shall only be made by users with the express prior written consent of SIOP and SIEP. The copyright of DEPs vests in SIOP and SIEP. Users shall arrange for DEPs to be held in safe custody and SIOP or SIEP may at any time require information satisfactory to them in order to ascertain how users implement this requirement. All administrative queries should be directed to the DEP Administrator in SIOP. NOTE: In addition to DEP publications there are Standard Specifications and Draft DEPs for Development (DDDs). DDDs generally introduce new procedures or techniques that will probably need updating as further experience develops during their use. The above requirements for distribution and use of DEPs are also applicable to Standard Specifications and DDDs. Standard Specifications and DDDs will gradually be replaced by DEPs. DEP 70.10.90.11-Gen. November 1995 Page 2 PDF created with pdfFactory Pro trial version www.pdffactory.com TABLE OF CONTENTS 1.INTRODUCTION .4 1.1SCOPE 4 1.2DISTRIBUTION, INTENDED USE AND REGULATORY CONSIDERATIONS4 1.3DEFINITIONS 4 1.4CROSS-REFERENCES 5 2.RESPONSIBILITIES .6 2.1INTRODUCTION .6 2.2RESPONSIBILITIES OF DIFFERENT DISCIPLINES 6 3.PROCESS .10 3.1KEY PRINCIPLES .10 3.2THE PROCESSES FROM SPECIFICATION UNTIL SURPLUS REVIEW OF SPARE PARTS11 3.3SPARE PARTS CATEGORIES AND BASIS FOR SELECTION . 16 4.SELECTION AND NUMBER OF SPARE PARTS 21 4.1INTRODUCTION .21 5.PROCUREMENTOFEQUIPMENTANDSPAREPARTSBY CONTRACTORS.23 5.1CONTRACTING OUT23 5.2RESPONSIBILITIES BETWEEN PRINCIPAL AND CONTRACTOR. 23 5.3THE PROCESS TO BE FOLLOWED BY CONTRACTORS 24 6.REFERENCES 26 7.BIBLIOGRAPHY .27 APPENDICES APPENDIX 1SPAREPARTSACTIVITYANDRESPONSIBILITYMATRIXFOR PROJECTS ORGANISED BY THE PRINCIPAL 28 APPENDIX 2SPECIMENCONTRACT CLAUSES FOR STANDARDIZATIONAND VARIETY CONTROL29 APPENDIX 3DECISION RULE APPLIED IN THE E-SPIR 32 DEP 70.10.90.11-Gen. November 1995 Page 3 PDF created with pdfFactory Pro trial version www.pdffactory.com 1.INTRODUCTION 1.1SCOPE This DEP specifies requirements and gives recommendations for the co-ordination, review, selection, purchase and disposal of spare parts for new projects and single equipment orders, with the aim of applying the principles of standardization and variety control. This DEP defines the responsibilities of personnel involved in the process including Contractors. It covers the selection and quantities of spare parts required for the commissioning, initial operation and normal operation of the plant. This is a revision of the DEP of the same number dated February 1987. The policies and decisions made at the beginning of a project have a significant effect on the cost of operating the plant or piece of equipment. At this stage consideration should be given to minimizing the life-cycle cost by using standardized items, exploring inter-company stocking of high value items and transferring stocks to Suppliers. The presence of surplus or slow-moving stock represents waste both in terms of capital employed and resources devoted to their acquisition and care. The basic premise of this DEP is that items should only be stocked if the benefits of immediate availability outweigh the cost of holding the items in stock (which is approximately 25% of the purchase cost per year). This DEP provides some practical tools for deciding whether new items should be taken in stock, based on factors such as cost of stocking, delivery time, consumption rate andtheoperationalpenaltycostsofnotstockingthem.Inadditionitprovides recommendations about the quantity of each spare part to be purchased. The calculations for these decisions are incorporated in a computer program, “E-SPIR“, the use of which is described in this DEP. Application of this DEP will optimize the quantity of spare parts, and hence reduce capital and operating expenditure. Experience with recent projects has shown that by applying this DEP a 40% saving is possible in the procurement of spare parts (compared with the previous version of this DEP), as well as considerable savings in procurement and logistics operations after completion of the project. Although they do not form an integral part of this DEP, the documents listed in the Bibliography (Section 7) give further background information. 1.2DISTRIBUTION, INTENDED USE AND REGULATORY CONSIDERATIONS Unless otherwise authorised by SIOP and SIEP, the distribution of this DEP is confined to companies forming part of the Royal Dutch/Shell Group or managed by a Group company, and to Contractors and Manufacturers/Suppliers nominated by them (i.e. the distribution code is “F“ as described in DEP 00.00.05.05-Gen.). This DEP is intended for use in oil refineries, chemical plants, gas plants, exploration and production facilities and, where applicable, in supply/marketing installations. If national and/or local regulations exist in which some of the requirements may be more stringent than in this DEP the Contractor shall determine by careful scrutiny which of the requirements are the more stringent and which combination of requirements will be acceptable as regards safety, environment, economic and legal aspects. The Contractor shall inform the Principal of any deviation from the requirements of this DEP to these regulations. The Principal may then negotiate with the authorities concerned with the object of obtaining agreement to follow this DEP as closely as possible. DEP 70.10.90.11-Gen. November 1995 Page 4 PDF created with pdfFactory Pro trial version www.pdffactory.com 1.3DEFINITIONS 1.3.1General definitions The Contractor is the party which carries out all or part of the design, engineering, procurement, construction, commissioning or management of a project, or operation or maintenance of a facility. The Principal may undertake all or part of the duties of the Contractor. TheManufacturer/Supplier/Vendoristhepartywhichmanufacturesorsupplies equipment and services to perform the duties specified by the Contractor. The Principal is the party which initiates the project and ultimately pays for its design and construction. The Principal will generally specify the functional and technical requirements. The Principal may also include an agent or consultant authorized to act for, and on behalf of, the Principal. The word shall indicates a requirement. The word should indicates a recommendation. 1.3.2Specific definitions and abbreviations Equipmentan engineered device designed to perform a specific function. E-SPIRthe electronic version of the SPIR. Goodsmaterials or equipment and any part or component thereof incorporated or to be incorporated therein. Projectan undertaking as a single integrated activity of the design, engineering, procurementandconstructionorinstallationofproperty,plantor equipment, or the development of new products. For the purpose of this DEP, direct-charge purchases of equipment and the related spare parts activities are considered as project activities. Spare parta piece of material, identical to the original, which can be used to replace a part of equipment during its economic life-cycle. SPIRSpare Parts and Interchangeability Record. This is a Standard Form (DEP 70.10.90.81-Gen.) included in the Standard Forms binder (DEP 00.00.10.05-Gen.). The electronic version of this is the E-SPIR. 1.4CROSS-REFERENCES Where cross-references to other parts of this DEP are made, the referenced section number is shown in brackets. Other documents referenced by this DEP are listed in (6) and bibliographic references are listed in (7). DEP 70.10.90.11-Gen. November 1995 Page 5 PDF created with pdfFactory Pro trial version www.pdffactory.com 2.RESPONSIBILITIES 2.1INTRODUCTION The contract, project specifications and planning sheets prepared at the start of the project should define staff responsibilities in relation to all spare parts activities. The appropriate priority level should be given to the spare parts review process among the many project activities.In the spare parts review process check points should be established at which to verify the actual activities. Local circumstances such as applicable software systems, the existing coding system and the presence of an inventory should be defined and it should be decided how the information contained in the existing inventory is to be communicated to the relevant parties during the project. 2.2RESPONSIBILITIES OF DIFFERENT DISCIPLINES Table 1 provides an overview of responsibilities for the situation in which the Principal organises the procurement of equipment and spare parts. The detailed responsibilities are described in the remainder of this Section. Table 1Responsibility Matrix for spare parts when organised by the Principal SPARE PARTSSPECIFY andAUTHORISE by:PURCHASE and CATEGORIESSELECT by:DELIVER TechnicalCommercial InsuranceDesign Engineer,Project EngineerSuppliesWith main spare partsliaising withandDepartmentequipment to stock MaintenanceMaintenance FocalManagement Focal PointPoint CommissioningMaintenanceDesign EngineerProject EngineerWith main spare partsFocal Point,equipment liaising with Design Engineer InitialMaintenanceMaintenance FocalSuppliesBy Maintenance, spare partsFocal Point,PointDepartmentto stock before liaising withManagementplant start-up Project Engineer OperatingMaintenanceMaintenance FocalSuppliesBy Supplies spare partsFocal PointPointDepartmentDepartment, to Managementstock NOTE:For definitions of spare parts categories refer to (3.3.1). 2.2.1Project Engineer The Project Engineer has overall responsibility for execution of the project. With respect to spare parts, the Project Engineer: ensures that a spare parts policy referring to this DEP is addressed in the contract and project execution plans; ensures adherence to this DEP; ensures that Contracts and Project Specifications are clear on standardization and the use of vendor lists (specimen contract clauses are available in Appendix 2 of this DEP). Vendor lists should be checked against existing equipment available with the Principal; ensures that possible plant shutdown costs in relation to equipment failure are DEP 70.10.90.11-Gen. November 1995 Page 6 PDF created with pdfFactory Pro trial version www.pdffactory.com available to those staff who make decisions about the purchase of back-up equipment and Insurance spare parts. In order to make the right decision to stock or not to stock it is essential to know the equipment penalt