Improv­ing oper­a­tional effi­cien­cies — and achiev­ing over US$1.4 mil­lion in savings

Back­ground

Hydro­car­bon pipelines trans­port var­i­ous forms of hydrocarbon-based prod­ucts, pri­mar­i­ly crude oil and nat­ur­al gas. These pipelines serve as essen­tial infra­struc­ture for the ener­gy indus­try, enabling the effi­cient and reli­able trans­porta­tion of hydro­car­bons over long dis­tances, often span­ning hun­dreds or thou­sands of kilometres.

Our client is a lead­ing trans­porta­tion and mid­stream ser­vice provider that has been serv­ing North America’s ener­gy indus­try for over 60 years. They own an inte­grat­ed sys­tem of pipelines that trans­ports var­i­ous hydro­car­bon liq­uids and nat­ur­al gas products.

The client also owns gas gath­er­ing and pro­cess­ing facil­i­ties, as well as an oil and nat­ur­al gas liq­uids infra­struc­ture and logis­tics busi­ness. The com­bi­na­tion of inte­grat­ed assets and com­mer­cial oper­a­tions along the major­i­ty of the hydro­car­bon val­ue chain allow them to offer a full spec­trum of mid­stream and mar­ket­ing ser­vices to the ener­gy sector.

Analy­sis

After a three-week analy­sis, we dis­cov­ered room for process improve­ment in OPEX and CAPEX project man­age­ment, as well as the dai­ly pipeline man­age­ment. From there, we laid out the roadmap for a 20-week trans­for­ma­tion programme.

The goals of our pro­gramme were to design and imple­ment new process­es and behav­iour­al changes that will sus­tain the clien­t’s oper­a­tions well into the future, and there­fore achieving:

1. Direct cost sav­ings of between US$1.03 mil­lion to US$1.4 mil­lion through con­tract­ing and sup­ply chain improvements
2. Project and integri­ty dig Cost avoid­ance of between US$800,000 to $950,000
3. Work­able oper­a­tional blue­print for five oth­er pipeline oper­at­ing districts

Project Approach & Implementation

The project was bro­ken down into three workstreams:

WORKSTREAM I: MANAGEMENT CONTROL SYSTEM (MCS)

• Cre­at­ed new process­es, reports, and dash­boards to improve the effi­cien­cy of the oper­a­tions and super­vi­so­ry team. The dash­boards include dai­ly pig­ging runs and oth­er duties assigned to field operators
• Imple­ment­ed new tools that allowed employ­ees to input data through mobile devices, uploaded dai­ly and dis­cussed in dai­ly morn­ing meetings.

WORKSTREAM II: SUPPLY CHAIN

• Cre­at­ed and imple­ment­ed new process­es to solic­it, exe­cute and sus­tain new ven­dor agreements.
• By fol­low­ing the new pur­chase order and sup­ply chain rules installed dur­ing the project, the client was able to record imme­di­ate sav­ings and enjoy year-over-year benefits.

WORKSTREAM III: CONTRACTOR MANAGEMENT AND CAPITAL PROJECT

• Han­dled the larg­er integri­ty projects and cre­at­ed a man­age­ment sys­tem in order to prop­er­ly plan, sched­ule and utilise con­trac­tors on major cap­i­tal projects going forward.
• Cre­at­ed a new process and cri­te­ria to self-perform process­es inter­nal­ly before con­tract­ing future work.
• The self-perform review and process has also allowed the client to cross-train employ­ees and pro­vide the work­force with new tech­ni­cal opportunities.

Results

At the end of the pro­gramme, we man­aged to sur­pass our ini­tial finan­cial esti­mates; sav­ings from the imple­men­ta­tion of solu­tions for Work­streams II and III end­ed up being greater than the ini­tial goal of US$1.4 million.

We also helped the client utilise their cur­rent work­force more effi­cient­ly, in addi­tion to help­ing super­vi­sors spend more time in the field. Our new tools and process­es also helped increase pro­duc­tiv­i­ty by over 15% and elim­i­nate late integri­ty tests and pig runs.

Pro­duc­tiv­i­ty in the field sig­nif­i­cant­ly improved, and actu­al super­vi­sion and field man­age­ment time increased because of the new stream­lined man­age­ment report­ing and con­trol sys­tem. Project were now being com­plet­ed on time, at or below budget.

Over­all, the new and improved sup­ply chain and project order process­es that we devel­oped togeth­er with the client helped them save mil­lions, improve ven­dor rela­tion­ships, and fos­ter a work­ing cul­ture that pri­ori­tis­es quality.