1. Reducing Rig Release to Onstream Cycle Time
Corporate Goal: Reduce rig release to on stream cycle time by 10% from previous year baseline.
Physical Execution Goal: Reduce rig release to on stream cycle time by 10% from previous year baseline.
Individual Asset Team Goal: Reduce rig release to on stream cycle time in specific management areas (MAs) by 10% from previous year baseline.
Implementation Approach:
1) Develop previous year baseline supported by data (organization and asset team). The process involved addressing data gaps in the systems and correcting entry errors to create an acceptable baseline;
2) Translate the goal into tangible metrics and targets for the organization, as well as for each production area;
3) Conduct analysis to provide organization and asset teams with usable information;
4) Share findings with the executive, production area leaders, and staff to articulate what success looks like;
5) Work with each asset team and leader to identify root causes of excessive cycle time and develop strategies to address these;
6) Implement strategies (including identifying and applying internal best practices);
7) Develop cycle time scorecard and provide web based monthly scorecard updates and tracking on each component of rig release to on stream cycle time metrics and consulting support for the company and by asset team. Both year 1 baseline and current year performance tracked and reported.
8) Provide reinforcement to asset team leaders and asset teams for generating improvements in cycle time
Results:
o After establishing the baseline in year 1 and implementing improvement strategies, year 2 performance resulted in a 48% reduction in rig release to on stream cycle time (approximately 79 days reduction).
o One time cash flow impact for 2008 was approximately $43MM, and production increase of 741,000 BOE for the year.
o Key delays were discovered in internal administrative handoffs between departments along with some improvement in the actual physical execution of work. The handoff delays we reduced through improved communication and planning, clarification of roles and responsibilities, and creating awareness of impacts of delays. This led to changes in managing internal processes and creating a focus on continuous improvement.
o Data quality (completeness and accuracy) improved from 72% to 97% compared to base year.
2: Reducing Downtime and Improving Production In Oil Field Operations.
In this implementation, the focus was on developing and introducing a quality culture within the company through action learning, and coaching of leaders and teams. The focus was primarily on improving production, reducing waste, rework and downtime. In this implementation, the focus was on implementing continuous quality improvement in 9 production areas within the company.
This case study highlights one continuous improvement project that utilized a number of tools including Pareto and Fishbone charts, cross-functional teams and the PDCA methodology. We identified the project through an assessment of one year of production accounting data identifying downtime by category and associated production loss using a Pareto analysis. From this analysis, we identified Bottom Hole Pump Failures as the largest opportunity for improvement. Through the process, we utilized a Fishbone analysis to determine the root causes of the failures and further Pareto analysis to pinpoint which of the 89 oil wells had the failures and out of those, which were the vital few. We discovered that only 10 of the 89 wells had bottom hole pump failures and of those one had 86% of the production loss while the second highest loss by well was 6%.
Baselines of oil production and downtime hours were used to provide the team with feedback on what the scale of improvement may be. After implementing a new bottom hole pump technology (the highest quality, and higher cost than the low bid policy permitted), significant improvements resulted including:
• No downtime reported in either well over a 90 day test period (a 32% reduction in downtime in this category)
• Production increases of 28% in one well and 92% in the other (61,800 barrels increase per year), and recovery of lost production equating to 14,580 barrels of oil per year
• Elimination of service rig costs (over $530K/year)
• $2.3MM Net Benefit
3: Improving the Cycle Time and Efficiency of a Government Vendor Contracting Process.
This initiative was implemented in a Government Personnel Administration Office which was responsible for a number of Human Resource services. One of the processes involved the contracting of vendors and consultants to deliver programs, courses, seminars and symposium presentations. This process was cumbersome and inefficient and the need for changes was elevated due to an internal audit report which determined that 20 - 30% of vendor contracts were signed after the service was delivered which was in contravention to the established guidelines. Part of this was due to a cumbersome process requiring 11 sign off signatures on each contract involving two government departments, and requiring and average of 6 weeks cycle time to complete all sign offs.
In determining what the ultimate outcome was for the government customers, it was agreed that having a contract signed in advance to ensure services can be delivered on time to customers was paramount. In order to accomplish this and address the internal audit issue, a process improvement team was formed to map out the AS-IS process with input from all signing authorities and other administrative and legal staff involved in the process, identify improvement opportunities, develop a TO-BE process and RACI and implement the improvement .
During the assessment phase, it was discovered that only 2 of the 11 signatures were required, significantly streamlining the process and resulting in a 52% reduction in costs, and a 69% reduction in cycle time. In addition, the legal contract was streamlined from 17 pages to 1. The cycle time for contract sign off was reduced from 6 weeks to 30 minutes. With the improvement, all contracts were signed off prior to the vendor delivering the service.
4: Reducing Downtime and Improving Production in a Forest Products Operation.
In implementing a Continuous Quality Improvement initiatives in this Forest Products company, initial assessments indicated that Shift A in the sawmill division consistently under performed Shift B by 11-12% in terms of daily production, and in the previous 90 days had outperformed Shift B on only 2 days.
In working with the Shift A supervisor, we determined that the issue for this production difference was largely due to high turnover at the plant and Shift A acquiring new and untrained staff on a regular basis. This resulted in errors and mistakes causing downtime and lost production. I developed an improvement plan with the supervisor which included the posting of daily performance in terms of production and piece counts as well as downtime hours at the area where downtime was most prevalent, the sorter.
In order to improve productivity, the supervisor agreed to train each staff member to about an 80%+ competency in each of the 5 major steps of the process, one step at a time. We also developed a positive reinforcement plan for the staff as well celebrating achievements at each step. Initially there was resistance by the staff to be measured and closely coached to the point where the performance charts were torn down and thrown in the trash for the first 3 days, After that, the operators were beginning to expect and look for their performance results. When the training was complete after about 2 weeks, the results included:
• Shift A outperformed Shift B 11 days in a row
• Shift A established plant production records for three days in a row.
• Downtime was reduced by 38%.
• Production improved by 41,000 Board Feet per day
(c) Masiuk Consulting Services Ltd. 2016
Physical Execution Goal: Reduce rig release to on stream cycle time by 10% from previous year baseline.
Individual Asset Team Goal: Reduce rig release to on stream cycle time in specific management areas (MAs) by 10% from previous year baseline.
Implementation Approach:
1) Develop previous year baseline supported by data (organization and asset team). The process involved addressing data gaps in the systems and correcting entry errors to create an acceptable baseline;
2) Translate the goal into tangible metrics and targets for the organization, as well as for each production area;
3) Conduct analysis to provide organization and asset teams with usable information;
4) Share findings with the executive, production area leaders, and staff to articulate what success looks like;
5) Work with each asset team and leader to identify root causes of excessive cycle time and develop strategies to address these;
6) Implement strategies (including identifying and applying internal best practices);
7) Develop cycle time scorecard and provide web based monthly scorecard updates and tracking on each component of rig release to on stream cycle time metrics and consulting support for the company and by asset team. Both year 1 baseline and current year performance tracked and reported.
8) Provide reinforcement to asset team leaders and asset teams for generating improvements in cycle time
Results:
o After establishing the baseline in year 1 and implementing improvement strategies, year 2 performance resulted in a 48% reduction in rig release to on stream cycle time (approximately 79 days reduction).
o One time cash flow impact for 2008 was approximately $43MM, and production increase of 741,000 BOE for the year.
o Key delays were discovered in internal administrative handoffs between departments along with some improvement in the actual physical execution of work. The handoff delays we reduced through improved communication and planning, clarification of roles and responsibilities, and creating awareness of impacts of delays. This led to changes in managing internal processes and creating a focus on continuous improvement.
o Data quality (completeness and accuracy) improved from 72% to 97% compared to base year.
2: Reducing Downtime and Improving Production In Oil Field Operations.
In this implementation, the focus was on developing and introducing a quality culture within the company through action learning, and coaching of leaders and teams. The focus was primarily on improving production, reducing waste, rework and downtime. In this implementation, the focus was on implementing continuous quality improvement in 9 production areas within the company.
This case study highlights one continuous improvement project that utilized a number of tools including Pareto and Fishbone charts, cross-functional teams and the PDCA methodology. We identified the project through an assessment of one year of production accounting data identifying downtime by category and associated production loss using a Pareto analysis. From this analysis, we identified Bottom Hole Pump Failures as the largest opportunity for improvement. Through the process, we utilized a Fishbone analysis to determine the root causes of the failures and further Pareto analysis to pinpoint which of the 89 oil wells had the failures and out of those, which were the vital few. We discovered that only 10 of the 89 wells had bottom hole pump failures and of those one had 86% of the production loss while the second highest loss by well was 6%.
Baselines of oil production and downtime hours were used to provide the team with feedback on what the scale of improvement may be. After implementing a new bottom hole pump technology (the highest quality, and higher cost than the low bid policy permitted), significant improvements resulted including:
• No downtime reported in either well over a 90 day test period (a 32% reduction in downtime in this category)
• Production increases of 28% in one well and 92% in the other (61,800 barrels increase per year), and recovery of lost production equating to 14,580 barrels of oil per year
• Elimination of service rig costs (over $530K/year)
• $2.3MM Net Benefit
3: Improving the Cycle Time and Efficiency of a Government Vendor Contracting Process.
This initiative was implemented in a Government Personnel Administration Office which was responsible for a number of Human Resource services. One of the processes involved the contracting of vendors and consultants to deliver programs, courses, seminars and symposium presentations. This process was cumbersome and inefficient and the need for changes was elevated due to an internal audit report which determined that 20 - 30% of vendor contracts were signed after the service was delivered which was in contravention to the established guidelines. Part of this was due to a cumbersome process requiring 11 sign off signatures on each contract involving two government departments, and requiring and average of 6 weeks cycle time to complete all sign offs.
In determining what the ultimate outcome was for the government customers, it was agreed that having a contract signed in advance to ensure services can be delivered on time to customers was paramount. In order to accomplish this and address the internal audit issue, a process improvement team was formed to map out the AS-IS process with input from all signing authorities and other administrative and legal staff involved in the process, identify improvement opportunities, develop a TO-BE process and RACI and implement the improvement .
During the assessment phase, it was discovered that only 2 of the 11 signatures were required, significantly streamlining the process and resulting in a 52% reduction in costs, and a 69% reduction in cycle time. In addition, the legal contract was streamlined from 17 pages to 1. The cycle time for contract sign off was reduced from 6 weeks to 30 minutes. With the improvement, all contracts were signed off prior to the vendor delivering the service.
4: Reducing Downtime and Improving Production in a Forest Products Operation.
In implementing a Continuous Quality Improvement initiatives in this Forest Products company, initial assessments indicated that Shift A in the sawmill division consistently under performed Shift B by 11-12% in terms of daily production, and in the previous 90 days had outperformed Shift B on only 2 days.
In working with the Shift A supervisor, we determined that the issue for this production difference was largely due to high turnover at the plant and Shift A acquiring new and untrained staff on a regular basis. This resulted in errors and mistakes causing downtime and lost production. I developed an improvement plan with the supervisor which included the posting of daily performance in terms of production and piece counts as well as downtime hours at the area where downtime was most prevalent, the sorter.
In order to improve productivity, the supervisor agreed to train each staff member to about an 80%+ competency in each of the 5 major steps of the process, one step at a time. We also developed a positive reinforcement plan for the staff as well celebrating achievements at each step. Initially there was resistance by the staff to be measured and closely coached to the point where the performance charts were torn down and thrown in the trash for the first 3 days, After that, the operators were beginning to expect and look for their performance results. When the training was complete after about 2 weeks, the results included:
• Shift A outperformed Shift B 11 days in a row
• Shift A established plant production records for three days in a row.
• Downtime was reduced by 38%.
• Production improved by 41,000 Board Feet per day
(c) Masiuk Consulting Services Ltd. 2016