Equipment management and transportation had been identified as an area with significant opportunity to reduce drilling and completions cost by increasing supply boat utilization from 60% to 80% and managing equipment and service team timing. This opportunity was so well recognized that disparate competing initiatives had been launched by Logistics, Supply Chain, and Operations to capture the potential benefit.
One project team wanted to create a holistic solution that would drive benefits for all areas of the business, so they engaged Hawk’s Ridge Associates.
Key to success: Engaging all stakeholders to understand current performance and the goals of all of the initiatives, and then applying objective criteria to create a solution set with maximum benefit for the corporation.
The Hawk’s Ridge Associates approach creates ownership across the entire
organization in the future state and the path to achieve it. The initial engagement steps provide members of the organization with an opportunity to help define the changes
needed – enrolling them as architects of the change through interviews and joint analysis.
In this case, groups did not understand the full end-to-end process, and how improvements in particular areas would sub-optimize by driving cost for others.
Hawk’s Ridge Associates helped the team create full cross-functional understanding of the current way of working. The team began by conducting interviews, process mapping, and data analysis at every operating rig, the Houston home office, and the shore base logistics station. The team explored current strengths and opportunities in:
- Forecasting over the long term, in support of fleet sizing, supply chain negotiations, and long-lead purchases
- Planning over the medium term, incorporating lead times
- Scheduling over the near term to assure arrival at the dock for on-time, in-full delivery to the rig
- Ordering of equipment, services, and supplies, based on scheduling
- Returning – equipment and supplies
- Boat Optimization and Loading
- Purchasing – requisition and call-out
The resulting assessment indicated an opportunity to create value by integrating processes across parts of the organization by implementing:
- Integrated forecasting, planning and scheduling integrating well design and planning
- Fleet forecasting and planning, including additional leases, releases, and farm-out opportunities to optimize fleet size
- Shift of fleet management to shorebase from the rigs
- Detailed scheduling on a rolling 7-day basis to coordinate equipment and service delivery
- New equipment and service ordering and return process linked to scheduling designed to minimize lease costs
The team was able to achieve $85 million in benefits over the first year, with additional benefits expected as planning and scheduling matured.
While the cost savings were significant, the development of leaders within the team provided even broader lasting benefit for the organization. Coaching by Hawk’s Ridge Associates helped program team members to develop stakeholder engagement, process improvement, strategic thinking, and business case development skills. Even though many of these team members were already Lean Six Sigma Blackbelts skilled in the corporate project management system, they learned to pull a diverse set of skills together to create holistic programs that maximize sustainable value for the company.