The Supermajors Have Spoken: 3 Ways to Attain Operational Excellence
As we have discussed in previous blog entries, lower oil prices have impacted operations in a number of different ways, and we have seen an impact on large-scale capital projects, with many energy companies being forced to reevaluate their capital investment schemes.
For operating assets, the key to profitability in an adverse oil price environment is to increase productivity and lower operational costs. Operational excellence principles can provide dramatic improvements to reliability, production, and compliance, while reducing the risk of incidents and downtime.
Companies from Chevron to Shell to ConocoPhillips have shared their approaches to achieving operational excellence, and it has become clear that companies had three areas of focus.
A common challenge is to make a your programme accessible to and for everyone. Even perfect programmes are doomed for failure if no one knows about them or if it’s too difficult to fit into the glide path of their "day jobs." Technology can help – but only if it’s designed to meet these two requirements.
One of our customers has shared that they leveraged Microsoft Office tools, specifically Visio and PowerPoint, to document and communicate their new programme. While these are useful tools in documenting operational procedures, maintaining ongoing changes and improvements, and communicating both the program and its results, without integrating the program into your other business systems, adoption will remain challenging.
The key is making it easier for your personnel to find the information in your business systems than to ask a colleague. Some advice based on our experience with customers:
- Find and include experts in different roles and departments throughout your company.
- Ensure that essential procedures and other information are up-to-date and accessible.
- Eliminate the silos that prevent standardization on your established best practices to take place.
Insist that systems work with – or within – your existing business systems.
ii) Finding Consistency in Operations
Fully understanding and documenting these processes is often step one in an operational excellence initiative; however, it’s not enough to just document best practices and standard operating procedures. There are serious real-world hurdles to jump before adoption of operational excellence can become a reality in the field.
A few best practices spring to the fore:
Identifying best practices - By regularly reviewing these documents with all stakeholders, companies are able to refine procedures to be more efficient and safer.
Including all key stakeholders - By involving personnel throughout the organization, you will establish a sense of ownership that results in much higher adoption.
- Establishing KPIs - By monitoring the results of your initiative, you are able to track both adoption and the impact of these changes, as well as identify successes that will yield continued support and adoption.
And in the era of the Great Crew Change, following these processes are more important than ever.
iii) Focus on Your People
While information is important, the importance of rallying both management and the personnel "on the ground" to support the principles and detailed processes of your program cannot be understated. To be successful, programmes need to be managed both up and down the organisation.
With upper management, aligning the value of operational excellence against the business challenges that the oil & gas industry is facing today is usually an easy sell. Establishing KPIs based on business results helps to keep management informed and supportive as you get your programme up and running.
Companies that struggled to find adoption often did not find champions to support the effort. An important best practice is the establishment of a steering committee to gain contributions and support throughout the company.
Operational excellence can unlock considerable value for Oil & Gas companies, especially those looking for ways to deliver profitability with lower oil prices, but it’s important to consider all three of these pillars to reach your goals.
What is your experience with Operational Excellence initiatives? Have they been successful? If so, what were the critical success factors?
Martin Richards, Senior Director, EMC Enterprise Content Division