Viewpoint: Operational excellence—The path to world-class performance
Why is operational excellence (OE) increasingly being recognized as the path to world-class performance?
Why is operational excellence (OE) increasingly being recognized as the path to world-class performance? A recent, industry-wide survey across health, safety and environment (HSE), maintenance and operations professionals has provided a real insight into the industry’s thinking on the opportunities and challenges associated with OE.
The respondents overwhelmingly agreed that OE is “the unrelenting pursuit of world-class operational performance.” Pressure to improve productivity and efficiency, along with increasing scrutiny from regulators and the public, is higher than ever. As a result, organizations are moving toward an enhanced operating model, one driven by the pursuit of OE.
Broad consensus exists that the successful implementation of OE is essential to the future success of the hydrocarbon processing business, with over 95% of respondents saying that it is “important” to their organizations (FIG. 1).
FIG. 1. OE survey infographic shows importance of OE to energy industry professionals. Source: Petrotechnics.
The overwhelming majority of those surveyed recognized that OE success means that everyone in their organization is able to make better-informed decisions that reduce risk, improve productivity and reduce costs. OE starts with a more integrated approach to operations management.
Productivity, risk and cost are inextricably linked, and the key to OE is to enable everyone, from the boardroom to the frontline, to better understand how their decisions impact their part of the business. The challenge is that company personnel, from the boardroom to the workers with wrenches in their hands, are struggling to get a view of operational reality through what can be a blizzard of complexity.
Senior executives are learning the same painful lessons as NASA—that the myriad of key performance indicators (KPIs) provide little insight into the reality of their operations. The NASA Space Shuttle program was collecting 600 metrics per month (right before the loss of the Columbia space shuttle), none of which turned out to be helpful in predicting the loss or identifying the clear migration of the program to states of increasing risk. The author found a similar story in Texas City, when he worked on the team brought in to provide operational stability immediately after the refinery explosion incident.
If OE is about better decisions, then a simpler approach is required that connects disparate processes and people in a way that allows everyone to visualize and manage risk and operations in a new way.
The survey recognized the role of digital technology in OE, with over 92% agreeing that it is a key enabler. What is required is a shared view of operational reality where everyone knows what is happening, where it is happening and when it is happening. This is the real promise of Big Data in our industry.
A recent whitepaper quantified the potential benefits from OE. The report detailed that companies that implement best-practice OE programs see an average increase in production by 29%, are able to reduce costs by up to 43%, and improve asset uptime/availability by 29%.1 Additional benefits that can be gained by leveraging OE are shown in Table 1. The author’s company’s survey and the industry whitepaper present a strong argument that OE has never been more necessary; and with technology, it has never been more achievable. As the whitepaper points out, “With new technological advancements, we have the potential to improve business functions across the industry … technology has caught up with the industry’s needs.”
The value of technology is seen when it connects people and processes with data-derived insight. This idea is not just about spending billions more on integrating maintenance management systems and planning systems, while wrench-time and plan attainment remain stubbornly resistant to improvement. The right technology does not replace skilled, knowledgeable or experienced people. Instead, it enables everyone in an organization to manage activity in a practical, joined and routine way. It empowers people to consistently make the best possible operational decisions.
Top-performing companies arm everyone, from the CEO to the personnel working in the plant, with the right information to understand the wider impact of their actions. This is the foundation for delivering on the true potential of OE. Only a connected enterprise can achieve OE. If the industry is to achieve the performance that current conditions demand, organizations must be more connected.
By replacing silos with an enterprise platform and by connecting data horizontally across the organization, every person can be given the information required to make better, safer, smarter operating decisions. This provides a path to the real benefits of OE.
OE in practice
This approach to OE offers context for key operational decisions at various levels, in support of strategic objectives for oil and gas operators around the world. As an example, in preparation for running a large onshore operation in the Middle East, one hydrocarbon operator is using an OE platform as a risk advisory and activity management tool. The platform is integrated with the operator’s maintenance management system (MMS) and equipment status historian. For short-term schedule optimization, the platform displays high-risk areas in future shifts (14 d ahead) based on deviations captured from the historian and planned activities based on the maintenance schedule. This schedule is optimized based on resource utilization.
Within the OE platform, the execution of maintenance, and those activities associated with the maintenance schedule, are managed, such as removing equipment from service, depressuring, draining and purging, and installing energy isolations. Also included are ancillary activities, such as scaffolding erection and crane utilization.
Once built, the full schedule of work can be checked, and where necessary, optimized based on expected risk levels. The revised schedule is then synchronized with the MMS.
The OE platform helps manage operations activities, permitted and non-permitted work, while providing real-time visualization based on time, space and risk—to help identify what is happening on the plant, when and where—in terms of all activity and risk. HP
- Ernst & Young, “Driving operational performance in oil and gas,” 2016.
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