Reduction of Variability Drives Benefits Over $700M at Shell

Company: Shell Exploration & Production West | Sector: Oil & Gas | | Location: New Orleans, Louisiana USA | | Services Provided: Work Management, Materials Management, Asset Healthcare, Contract Services Management | | Client Testimonial: “The way that people even think about work has changed and it’s changed for the better“: John C Lebas Jr. P.E., Logistics

A number of oil and natural gas production units in the Gulf of Mexico, Southern Texas and the Rocky Mountains.
The project was based at Shell Exploration & Production (SEPCo) headquarters in New Orleans, LA.

Prior to working with SAMI, SEPCo had initiated several attempts to improve facility maintenance operations. These initiatives failed to gain adequate traction within the organization to institutionalize the work processes and discipline required to achieve the desired asset reliability and maintenance performance.
Additionally, several initiatives were underway that were aimed at improving operating process reliability.
SEPCo management came to the conclusion that asset reliability and process reliability are interdependent.
They decided that an integrated initiative aimed at both process and equipment reliability would improve the pace and penetration of the implementation.

We began our work with an assessment of the current state of the maintenance practices as part of a Focused Results Delivery (FRD) process. The purpose of the FRD was to establish an aligned vision and clear accountabilities for measurable performance
improvement and addressed the weaknesses in strategy, processes, methods and tools commonly used to manage assets at SEPCo operating locations. We then developed a strategic plan that included operational initiatives to improve SEPCo’s processes, systems and
practices. Once we had a strategy, we developed a detailed implementation plan that would provide cycles of learning throughout the organization by using a wave approach.
Working as part of an integrated cross functional management team we developed and installed:

  • A Work Management System (Phase I) including:
    • A planning process for maintenance activities
    • A scheduling process to manage maintenance
    • An organizational structure to support the work
    • Managing and performance indicators
    • SAP functionality to capture data, establish
      equipment hierarchy, and develop reports to
      manage maintenance functions
  • A Materials Management Initiative (Phase I) with the following elements:
    • Critical spare parts lists for each asset
    • Initiate the development of Bill Of Materials for
      each asset
  • Develop a warehousing strategy
    • Contract Services Management (Phase I) including:
    • Contractor management process
    • Contractor selection process
    • Contractor usage process
  • Asset Healthcare (Phase II)
    • Root Cause Analysis of Equipment & Process
      related failures
    • Equipment Owner Concept to establish line
      level hands-on owners/improvers of equipment
    • Equipment History Capture and Data Management
      to support equipment performance analysis

The results exceeded the projections and the potential upside forecasted in the business case. The Strategic Plan identified gaps and recommended actions and a business case to invest $12M to achieve $250M. The benefits captured reached $26M USD in expense savings
and $700M USD in production cash-flow improvement.
In addition, there were major improvements in the key process metrics and leading indicators with manpower utilization reaching 57% and a 45% reduction in reactive work. All existing facilities were certified successful.