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Survey: Operational excellence - Gateway to world-class performance

by Guest on Jul 11, 2017

Scott Lehmann, vice president, product management and marketing, Petrotechnics.
Scott Lehmann, vice president, product management and marketing, Petrotechnics.

Respondents to the 2016 Operational Excellence Index of Petrotechnics (Index) overwhe-lmingly agreed that operational excellence is the unrelenting pursuit of world-class operational performance.

It requires everyone, from the boardroom to the frontline, to consistently make the most effective operational decisions, based on an integrated view of operational reality, on risk, cost and productivity.

Pressure to improve productivity and efficiency is increasing, and scrutiny from regulators and the public is higher than ever. As a result, organisations are moving towards an enhanced operating model, one driven by the pursuit of operational excellence.

Hydrocarbon processing business

The Index revealed a broad consensus that the successful implementation of operational excellence is crucial to the future success of the hydrocarbon processing business, with over 95 percent of respondents saying that it is important to their organisation.

Productivity, risk and cost are inextricably linked and the key to operational excellence is to enable everyone from the boardroom to frontline to better understand how decisions impact their part of the business. The challenge is that organisations are struggling to get a clear view of operational reality, through what is often a blizzard of complexity.

Senior executives of the hydrocarbon processing industry are learning the same painful lessons that NASA learnt over a decade ago – that a myriad of KPIs (key performance indicators) provides little insight into operational realities. In February 2003, the space shuttle Columbia disintegrated upon entering the Earth’s atmosphere, killing all seven crew members.

The space shuttle programme was collecting 600 key performance metrics a month right before the loss of Columbia, none of which turned out to be helpful in identifying the increased risk of the seemingly minor damage to the insulation, or predicting the disaster.

If operational excellence is about giving organisations the information they need to make better decisions, what is required is a simpler approach that connects disparate processes and people, and allows everyone to visualise and manage operational risk in a new way.

Value of technology

The Index recognised the role of digital technology in operational excellence, with over 92 percent agreeing that it is a key enabler.

According to a recent EY (Ernst & Young) white paper, with new technological advancements, we have the potential to improve business functions across the industry, and technology has caught up with the industry’s needs.

They also found that companies which implement the best-practice operational excellence programmes see an average 29 percent increase in production, up to 43 percent reduction in costs, and a 29 percent increase in asset uptime.

The 2016 Operational Excellence Index of Petrotechnics and EY’s numbers illustrate that operational excellence has never been more necessary. And, with technology, it has never been more achievable.

The value of technology comes when it connects people and processes with data-derived insights – this is the real promise of big data in our industry. However, the right technology does not replace skilled, knowledgeable or experienced people.

Instead, it enables everyone in an organisation to manage activities in a practical, joined-up and routine way. It empowers people to consistently make the best possible operational decisions.

Top performing companies are connected enterprises. They arm every single person with the right information to both understand the wider impact of their actions and to make better, safer, smarter operational decisions. This provides a path to the real benefits of operational excellence.

Large onshore integrated facility in the Middle East

In preparation for running a large onshore downstream operation in the Middle East, an operator is using an operational excellence 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 optimisation, the platform can review deviations captured from the historian alongside planned maintenance to display high-risk areas 14 days ahead. This schedule can then be optimised based on resource utilisation.

The execution of maintenance and associated activities, such as removing equipment from service, de-pressuring, draining and purging, and installing energy isolations, are managed within the operational excellence platform. Ancillary activities, such as scaffolding erection and crane utilisation, are also included.

Once built, the full schedule can be reviewed and optimised where necessary, based on expected risk levels. The revised schedule can then be synchronised with the MMS.

When the time comes, the operational excellence platform will be able to provide real-time visualisation of activity and risk across the enterprise: what is happening, where and when it is happening, and what is driving it.

By providing this information to everyone from the boardroom to the frontline, the platform can enable better informed decisions that reduce risk, cut costs, and improve productivity.


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