Impact of Operational Efficiency

Operational efficiency is the responsibility of the owner. Errors arise during operation either as a result of faulty design, poor reli­ability or a general failure to meet the owner’s requirements. The starting point of these errors usually lies somewhere between the owner and the project’s engineering office.

Figure 6.9 Effect of operation performance on the whole investment.

The most common errors in industrial projects are due to the lack of choice of high quality equipment. This is responsible for numerous problems and obstacles besetting operating perfor­mance and thereby, affects the overall revenue of the project. This is illustrated by Figure (6.9).

A last but important reason for operational shortcomings may arise from the owner paying insufficient attention to the need for appropriately experienced and adequately trained staff. Slackness on this front is bound to be reflected in the quality of production activities and output of the project, tending eventually to reduce overall revenue.