Deliv­er­ing over US$75 mil­lion in sav­ings by switch­ing to a new way of working

Back­ground

The oil & gas indus­try is a high­ly com­pet­i­tive and com­plex mar­ket, and sup­pli­ers of drilling equip­ment must meet strict qual­i­ty and safe­ty stan­dards to ensure reli­able and effi­cient oper­a­tion in chal­leng­ing envi­ron­ments. These sup­pli­ers may also pro­vide relat­ed ser­vices such as instal­la­tion, main­te­nance, and repair of the equip­ment they supply.

Our client pro­vides drilling rigs, equip­ment, per­son­nel, and camps on a con­tract basis to explore and devel­op oil and gas from onshore areas, fixed plat­forms, tension-leg plat­forms, and spars in off­shore areas. Oper­at­ing glob­al­ly, the client is head­quar­tered in North Amer­i­ca and owns the largest land fleet of AC drilling rigs in the world. 

Analy­sis

The client ini­tial­ly engaged us to review field oper­a­tions and help deter­mine why rig man­ag­er work­loads had increased dra­mat­i­cal­ly in the cur­rent upturn. Through a six-week analy­sis, we dis­cov­ered that the client lacked a sys­temic man­age­ment con­trol sys­tem (MCS) to ade­quate­ly mon­i­tor remote sites and fun­nel issues through the dis­tricts in a time­ly fashion.

After suc­cess­ful­ly con­clud­ing the ini­tial project, we shift­ed focus to work with the client at its head­quar­ters in North Amer­i­ca for a mas­sive 49-project engage­ment that cov­ered the fol­low­ing areas of importance:

• Remote site management
• Main­te­nance effectiveness
• Busi­ness reorganisation
• Engi­neer­ing effectiveness
• Sup­ply chain optimisation
• Devel­op­ing and rolling out the employ­ee change cham­pi­ons programme
• Human resource improvement
• Sales and mar­ket­ing improvement
• IT reor­gan­i­sa­tion and effi­cien­cy improvement
• Finance improve­ment
• Share­hold­er val­ue mapping
• Con­trac­tor and third-party management
• Inter­na­tion­al oper­a­tions review
• HSE (Health, safe­ty, and envi­ron­ment) effectiveness
• Merg­er and acqui­si­tion inte­gra­tion planning
• Design­ing the enter­prise dash­board and dai­ly oper­at­ing report

Project Approach

What began as a six-week rig man­ag­er Day-In-The-Life-Of (DILO) analy­sis quick­ly tran­si­tioned into a company-wide approach that took place over three-and-a-half years. We part­nered with exec­u­tive lead­er­ship to devel­op sys­temic changes with­in each area.

Build­ing upon our suc­cess in help­ing the client under­stand and improve the work and effi­cien­cy of rig-based man­age­ment and oper­a­tions, we start­ed this new project by improv­ing the way that dis­tricts were man­aged. Sub­se­quent­ly, we devel­oped and installed a Dis­trict Man­age­ment Sys­tem that gave plan­ners vis­i­bil­i­ty into — and effec­tive man­age­ment of — oper­a­tions with­in the districts.

We also helped reor­gan­ise the IT department’s struc­ture and the way data was han­dled, visu­al­ized and used by the orga­ni­za­tion. We assist­ed the finance depart­ment in insti­tut­ing prac­tices that cap­tured about US$30 mil­lion in over­due receivables.

The engi­neer­ing group asked us to help them insti­tute a man­age­ment sys­tem and demand man­age­ment process. These improve­ments led to our part­ner­ship with the company’s HR depart­ment to devel­op a cor­po­rate train­ing group, employ­ee devel­op­ment process, and a long-term HR strategy.

Project Imple­men­ta­tion

Dis­trict Man­age­ment System

In order to dri­ve con­sis­tent and con­sis­tent­ly effi­cient per­for­mance across the fleet, we devel­oped a Rig Man­age­ment Sys­tem (RMS) that allowed plan­ners to set new plan­ning expec­ta­tions, devel­op action plans, mon­i­tor score­cards, gen­er­ate dai­ly and week­ly oper­at­ing reports, and give up-to-date infor­ma­tion through dash­boards, among others.

Oper­a­tional Sup­port Ser­vices (Rig Val­ue Chain)

We devel­oped and imple­ment­ed clear roles and respon­si­bil­i­ties across four main organ­i­sa­tion­al groups:

1. Cen­tre of Excellence
2. Con­tin­u­ous Improvement
3. MRO (Main­te­nance, Repair, Overhaul)
4. Sup­ply Chain

Change Cham­pi­ons

In coor­di­na­tion with the new­ly cre­at­ed Con­tin­u­ous Improve­ment func­tion, we estab­lished a 20-week pro­gram that focused on the fol­low­ing areas:

1. Train­ing in Lean pro­duc­tion prin­ci­ples and Six Sig­ma basics
2. Exer­cis­es and drills to inte­grate key aspects of the train­ing with best prac­tices from the client
3. Inte­grat­ing the change cham­pi­ons into our ongo­ing workstreams
4. Get­ting the change cham­pi­ons to facil­i­tate select­ed projects under our supervision

Job Safe­ty Sys­tem Effectiveness

In addi­tion to expo­sure recog­ni­tion train­ing pro­grammes, we also devel­oped an SIF (Seri­ous Inci­dent Fatal­i­ty) work­group to assess the con­tent of all safe work pro­ce­dures, cre­at­ing a revised struc­ture that focused on safety-critical tasks.

Addi­tion­al­ly, we devel­oped an inter­ac­tive pre-job safe­ty meet­ing to engage par­tic­i­pants in a more effec­tive man­ner, as well as an audit sys­tem to observe safety-critical tasks and ensure adher­ence to safe work procedures.

Engi­neer­ing & Orga­ni­za­tion­al Effectiveness

We devel­oped an Enter­prise Port­fo­lio Man­age­ment (ERP) sys­tem which included:

1. Knowl­edge man­age­ment inte­gra­tion with the clien­t’s key oper­a­tional functions
2. Invest­ments in trans­paren­cy and cross-functional collaboration
3. Crit­i­cal exam­i­na­tion and re-definition of key processes
4. Iden­ti­fy­ing poten­tial organ­i­sa­tion­al struc­ture changes to improve engi­neer­ing val­ue to the chang­ing needs of the client
5. KPI dash­boards, week­ly excep­tion report­ing, and stage gate devel­op­ment processes

“The Change Cham­pi­on pro­gram is one of the most impor­tant ini­tia­tives con­duct­ed in this organ­i­sa­tion. The results are sig­nif­i­cant and far-reaching.”
CEO

Results