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Case Study

Organisational Effectiveness

Improving the execution efficiency in maintenance and supply chain management for oil and gas

2023/05/25

Background

Maintenance and supply chain management are crucial in the oil and gas industry. Maintenance ensures equipment reliability, safety, and cost savings through regular inspections, repairs, and preventive measures. It optimises asset performance, reduces downtime, and minimises environmental risks.

Supply chain management facilitates timely procurement, inventory management, logistics, and strong supplier relationships. It ensures the availability of necessary materials, minimises disruptions, and supports cost optimization.

Both maintenance and supply chain management contribute to maximizing production, minimizing downtime, and ensuring safe and profitable operations in the oil and gas industry.

Our client is one of the world’s leading oil and gas companies. They are vertically integrated and operate in all areas of the oil and gas industry, including upstream, refining, distribution and marketing, petrochemicals, power generation, and trading.

The client has a global presence, either operating on their own or as part of joint ventures in multiple countries.

Analysis

The client has an affiliate in Trinidad & Tobago that explores, produces, and distributes oil and gas in the region. We conducted a five-week analysis to evaluate two issues:

  1. How the affiliate had implemented five corporate core workflows:
    ✓ Work Management System (WMS)
    ✓ Activity Integration (AI)
    ✓ Control of Work (CoW)
    ✓ Purchase to Pay
    ✓ Material Management
  2. Evaluating the collaboration between the Operations and Procurements and Supply Chain Management (PSCM) divisions to ensure that work is executed safely and efficiently on site, with the right resources and the right materials.

Our analysis highlighted a few areas of concern:

  1. Core workflows sometimes caused confusion, especially regarding the touchpoints and roles.
  2. Confusion and lack of understanding seemed to provide convenient excuses for not applying rigor and skipping many basics.
  3. There was no structured and consistent PDCA cycle, daily review of work was not consistently practiced, variances were not reviewed, and there was no RCA at site level.
  4. Meeting effectiveness and attendance of required personnel was generally poor. Delegates were often sent but did not have the ability to take decisions.
  5. Technicians were underutilised; light execution schedules combined with inflated planned hours in MOs led to overall low wrench time.

Project Approach

Based on the results of our analysis, we began a 45-week transformation project to help the client its organisational workflows by positively influencing behaviours, processes, and systems.

We began by setting up a management action team (MAT) who were specially selected from the regional talent pool. These included leaders and subject matter experts and monitored by our consultants.

The MAT was set up to drive required improvements in the particular workstreams, and the overall project was overseen by a governance board comprised of the regional leadership team and headed by the client’s VP of Operations.

Project Implementation

Active collaboration by the affiliate’s stakeholders ensured the development of optimum solutions and buy-in of the improvements. The solutions were presented and agreed by all stakeholders in the Strategic Integration Meeting (SIM) held midway through the project.

The implementation of improvements for AI, WMS and CoW was sequenced. We identified several major hubs and a smaller onshore site for the first rollouts, followed by the smaller offshore platforms and larger onshore location.

We also continuously coached the workforce on the new solutions and processes. Progress was monitored through a combination of the Meeting Maturity Evaluation System (MES) and the KPI dashboard.

These tools formed the basis for decision-making; concerns were swiftly addressed through the MAT or Governance Board when required. These tools were handed over to the client as part of the sustainability process to ensure that the improvements will continue to yield further value.

Key Results

US$7.4 million

Of in-year value achieved

29%

Increase in permits conformance

More than 93%

Reduction in excess supply

There was significant overall improvement in resource loading, schedule stability, schedule attainment, and permit conformance, and a reduction of overdue backlogs.

In the PSCM space, significant improvements were achieved in Auto-PO Touchless performance and SC-to-PO cycle time, with resulted in a high financial value.

The approaches employed that we developed together with the client in the AI, WMS and CoW workflows proved to be a success, as the sites moved from a place of low conformance to one of significant improvements.

Note:
SC = Security Clearance
PO = Purchase Order

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