Oil Gas Chemicals

Operational Excellence: Lessons from the field

As a Business Management Consulting Firm, Operational Excellence client projects are a dramatic opportunity to deliver extreme shareholder value in a short amount of time. In the case of one of our Global Oil & Gas clients, WGA was able to help our client achieve and sustain transformational results translating into an annual operational cost reduction of -13% saving over $312M/year!

Problem: Repeat safety, quality and regulatory failures

A Global Oil & Gas Producer had experienced three consecutive quarters of bottom line cost increases coupled with repeat failures in upstream operations forced global leadership to take bold and aggressive action. Upstream project costs were skyrocketing out of control while sites were experiencing safety, quality and regulatory challenges. The client faced with the potential closure of several projects unless people, performance and cost problems were identified and corrected quickly.

Approach: Identify opportunities in vertical and horizontal operational processes and human performance framework

Joint root-cause exercises were executed for all safety, quality and regulatory failures. Concurrently, joint opportunity assessments were conducted in all business operation functions. These assessments focused on identifying vertical and horizontal business process waste, re-engineering and consolidation, technology misalignment, value-stream mapping and cost containment reviews. Further, industry benchmarking for cost, resource and operating structures, organization design and effectiveness, human competency and proficiency evaluations were also performed. Data collected from the root-cause exercises and opportunity assessment was analyzed and prioritized based upon business value, level of effort, cost and time to implement and cost containment value. WGA then developed an integrated, multiple work stream action plan coupled with a culture change strategy that was presented and approved by our client’s leadership team

WGA’s Solution: Re-align the organization, remove process waste, and focus on culture change

We understood that to drive successful adoption of the over 400 improvements chosen by leadership would require winning the hearts and minds of everyone impacted. We needed to focus on ensuring that our client’s organization would internalize and sustain the operational excellence strategy. We organized business action & transformation (BATTs) teams to develop, design, vet, lead and implement the operational excellence improvements. We worked with the client to re-align their organizational structure to ensure the improvements would be integrated. During the 8 month engagement, we provided functional expertise embedded in our client’s business transformation teams, manage and leadership mentoring, change management and PMO oversight.

Results: Enduring business value

Within 13 months of completion of the OE initiative the client achieved and sustained:

•Reduced business process and organizational complexity by -38%

•Reduced recordable safety, quality and regulatory events by -83%

•Reduced annual operational costs by -13% saving over $312M/year

•Improved internal customer and supplier satisfaction rates by 22%

•Improved internal employee job satisfaction 29%

•Established Business Excellence organization to sustain and continuously focus the organization on operational excellence

To find out more about WGA Consulting Operational Excellence Services, please contact us by email or call our offices at (866) 556-5206

Posted in Case Study, Culture Change, Oil Gas and Chemicals, Operational Excellence, Organizational Change Management and tagged , , , , , , , .

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