Question

SITUATION
One of the largest multinational oil and gas companies with operations including exploration and production, refining, transport, distribution, petrochemicals, power generation, and trading was looking for ways to better control rising costs at their onshore and offshore facilities.
Additionally, as their unplanned deferment rates continued to rise, there was a perception that labor productivity was decreasing. GP Strategies® conducted operational excellence (OE) assessments at several locations, which uncovered the following gaps:
a. little or no maintenance planning and scheduling;
b. lack of transparency between operations, engineering, and maintenance activities;
c. poor utilization of their CMMS; and
d. metrics (KPIs) that had no connection to the overall work management process.

The Challenge
Following the OE assessments, the company stakeholders realized changes needed to occur; however, they needed to achieve buy-in from each location. The company needed to determine methods that could refine the overall Maintenance Execution Program in order to realize cost savings and improved efficiency.
GP Strategies Solution
GP Strategies collaborated with the customer to help present reasons for change to their senior management to gain support and sponsorship.
A role-based competency assessment was conducted, which generated clear gaps that needed to be addressed. After the competency assessment, a maintenance execution assessment was conducted that consisted of 24 elements and 130 specifically defined criteria that, when corrected, would place the site as performing at better than industry average.
GP Strategies used the outcome of the assessment to define the existing gaps between the “as-is” condition and the future “to-be” condition, and then created a gap closure plan. The gap closure focused on teamwork between the Operations and Maintenance
teams, using the CMMS to enable maintenance delivery, and the use of a Measures Dashboard software tool to display the maintenance execution process.
GP Strategies developed a world-class maintenance-execution process, which covered the following areas:
a. Identifying the gaps
b. Prioritizing
c. Preparing for asset maintenance
d. Determining when to schedule maintenance
e. Executing and closing out the maintenance process
f. Reviewing and improving the maintenance process

Implementation is being achieved through changing the way people work together as teams, using the CMMS to enable maintenance delivery, and monitoring KPIs through the Measures Dashboard to report the outcome performance in a weekly and monthly trend.
Business Impact
Following the maintenance-execution process, GP Strategies developed the complete work management process, focusing on identifying and removing the waste (non-value-added activity) and ensuring the integrity of maintenance activities. This helped improve compliance, productivity, reliability, and asset availability for the customer.
a. Gained cost-savings of $220k on material expediting.
b. Identified the main causes of non-value-added maintenance, which increased maintenance productivity from 30% to 75%
c. Schedule compliance improved from 24% to averaging over 90%;
d. PM compliance averaged around 85% and is now at 98% in just 9 months.
e. Production output increased by 18%, or$900k/day.
f. The company has achieved close to 100% maintenance availability year to date, having finished the previous year at 89%.
g. 24% more work is completed with the same workforce.
h. A clear and transparent reporting structure was created.

Questions: Answer any 4 questions 4*5 marks = 20 marks
a. Describe the situation that was faced by GP Strategies.
b. What are the main challenges described in this case?
c. What is the Strategies Solution proposed by GP and how it was implemented?
d. Is strategic solution benefited to the company and how?
e. Propose alternative strategic solution for GP.

Answer 1

a) GP Strategies was facing the situation of increasing costs at their onshore as well as offshore facilities. The productivity of labour was declining along with no transparency between operations, engineering and maintenance activities. In addition to the above, GP Strategies was not optimally utilising its CMMS and there was no link between the Key Performance Indicators (KPI) and overall process of work management. Also, there was a lack of planning and scheduling as far as maintenance is concerned.

b) Main challenges-

1) Determination of the methods which could lead to refinement in the overall Maintenance Execution program with the objective to achieve savings in costs and ensuring efficiency.

2) Obtaining buy-in from each and every location.

c) Solution proposed by GP and its implementation

1) Collaborating with the customers to assist in presenting the reasons for change before the senior management for gaining their support and sponsorship.

2) Undertaking a role based competency assessment to have a clear picture of gaps that require attention of the management.

3) Organising a maintenance execution assessment to perform at a higher level than the industry average.

4) Defining the existing gaps between the current and expected future condition, using the results of the above assessments.

5) Creation of a gap closure plan which focuses on having a teamwork between operations and maintenance.

The implementation of the above solutions is done by making changes to the manner in which people work together as teams, with the help of CMMS to facilitate maintenance delivery and regular as well as continuous monitoring of KPIs through the Measures Dashboard for reporting the actual results in a weekly or monthly trend.

d) Yes, the above strategic solution has helped the company significantly because -

1) It has resulted in cost savings of $220k on material expediting.

2) There has been 24% more work completion with the same amount of workforce.

3) The maintenance productivity has risen from 30% to 75% through the identification of primary reasons of non-value-added maintenance.

4) There has been an increase in average PM compliance from 85% to 98% in only nine months.

5) There has been a more clear, robust and transparent reporting structure.

6) Average schedule compliance has increased from 24% to 90%.

7) There has been a rise in production output by 18% in percentage terms and $900k per day in monetary terms.

8) The company has been able to achieve almost 100% maintenance availability after such implementation whereas it was 89% during the previous year.