If you get a chance to talk with an EPC firm owner, his biggest nightmare is to handle warranty cost. He is always praying to God that after handover to the customer, the system keeps operating as per the given specification of the customer during the warranty period. The warranty period can have a big impact on the profitability of EPC firms.
One of the best practices used for capturing the failures of a site is FRACAS - failure reporting and corrective action system. This is a database that captures the observation of failure and other associated analyses done by engineers.
Usually, the issues during the warranty period are divided using the severity scale -
10- safety issues
9 - regulatory requirements
8- mission failure
7- partial mission failure
6- loss of secondary functions
5- partial loss of secondary functions
2,3,4 - a minor problem
1- no problem
Based on the severity an action plan should be taken for reported failure. There may be instances when a quick answer s needed to fix the issues at the site. That should be done, but especially for issues 10,9,8, 7 a good practice is to initiate a small project within the EPC team, to dig deep into the issue and if better solutions are obtained from the project, the earlier quick fixes should be completely replaced.
It is also observed that if proper system engineering has been done and no shortcuts are taken during construction time, the number of issues during the warranty period is minimal. It is also a good practice to have a culture of FRACAS in the EPC team even during the construction period till handover, as many issues reported during that period have a direct linkage during the warranty period.
How do you handle warranty issues in your firm? Please share in the comments section below.