Nelson P.

Repenning
Faculty Director
BP Operations Academy
Continuous Improvement for Engineering
and HSSE
This document is classified BP Confidential. Distribution is limited to BP authorised recipients only. Except for use among those individuals,
reproduction is prohibited. Further dissemination requires consent of originator, and the adherence to BP Group guidelines for handling classified
information
CI for Engineering and HSSE
Nelson P. Repenning
Faculty Director BP Operations Academy
Acting Head of Group Operations Capability Development
nelson@mit.edu
BP Engineering Conference

28 October 2009

Name that Company
X is an energy/transportation company that:
Is responsible for more than 40% of the volume that goes to
customers in the US market and over 20% worldwide
The closest competitor has less than 30% in the US
Has operating margins nearly twice that of its nearest competitor
and it hasthe lowest cost per unit
Has beat DJIA handily over the past two decades
Who is it????


General Motors in 1975
Name that author
--Exxon 2007 annual report
Out of 23 photos in the 2007 report, only 2 show an operator at work.
the management must take over and perform much of the work
which is now left to the [operator]; almost every act of the [operator]
should be preceded by one or more preparatory acts of the
management which enable [the operator] to do his work better and
quicker than he otherwise could.
Our systems define equipment operating procedures and limits,
establish routine maintenance schedules and verify that integrity
programs are completed. Management is involved and accountable for
decisions that impact the performance and reliability of our facilities.
--Frederick Winslow Taylor, 1911
The Fundamental Premise
Exxon is more like the GM of 1975 than the Toyota
of today

There is room at the top for the company that
manages to engage all of its workforce in the
practice of disciplined operating and problem
solving
* Adapted from S. Spear, Chasing the Rabit
So What Separates High Performers?
The ability of individuals to solve problems and have the organization
learn something in the process*
The Big Three
Toyota and Honda
* See Steve Spear (2008), Chasing the Rabbit
In 2006 Japanese manufacturers saved:
$150 per car due to less warranty
Almost $1,000 per car due to standard parts
$70 per car in reduced absenteeism
$70 per car in less idle work time
Capability
Organizational capability behaves just like any other
asset or vessel
It takes time to build
And it can be neglected for long periods of time before it begins
to decline
Capability
Investments
Erosion
Capability
Investments Erosion
Actual Performance
Time
* =
The Capability Trap
Endicott crews take action for continuous
improvement
Benefit
75% reduction in work time

8 failures per year reduced to
2

Value of reduced pump seal
failures = net benefit
$981,500/yr
Endicott has two produced-water pumps used for water re-injection. For
years the pumps plagued operators because their buffer seals would fail,
resulting in unscheduled plant shutdowns, lost oil production and costly
repairs.

Using a CI team approach, the crew investigated and discovered there was
some seal revamping that would provide a permanent fix. Replacing the seal
allowed them to switch from a glycol seal flush, costing about $800,000 per
year, to a less-expensive water flush.
This projectgave us production benefits, cost savings, risk reduction,
environmental benefits, a large reduction in activity and contributed to our
Endicott vision of silent running.

we have always been doing these kinds of things, but there is something
new. We sense more support and participation in Continuous Improvement
from our management especially from our local management.
-Jack Page, Operations Lead Tech
How can such high return
projects be just lying around?

15% behind schedule.
Time to move rig
averages 5 days and
varies significantly.
Can CI be applied here to
reduce rig move time?

Background


Moving Rigs in NAG
Initial findings


Number of truckloads
required estimated
between 12 and 20.
Actual number as
captured by time-
lapsed photos
30!
What Really Happens?
Red sticker placed on every item.
Sticker removed if item used.
Actions
30% of equipment never used.

Items not used stored offsite
within 30 minutes of field.
These items never used. Photo: Gemba Research
How Much Stuff Do We Need?
Photo: StongerTogether
Contractual terms gave trucking contractor strong incentive to start
move at beginning of day
Adding an average of a .5 days to each rig move
How Long Does it Really Take?
Measurement
0
2
4
6
8
10
0 10 20 30 40 50 60 70 80
D
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t
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M
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Rig Move Number
Move cost has fallen by 10k (20 moves a years)
Decrease in safety incidents
Start of project
The Results
The Big Payoff
Rig
Year
H&P 110 H&P 252 H&P 225 H&P 189 H&P 158
2008 2007 2008 2007 2008 2007 2008 2007 2008 2007
11
10
9
8
7
6
5
4
3
2
R
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M
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Boxplot of Rig Move
1 million + in annual direct cost reductions and
Project created a Phantom Rig (15-20 million
1
st
CI
project
If a man write a better book, preach a better sermon,
or make a better mousetrap than his neighbor, though
he build his house in the woods, the world will make a
beaten path to his door.
Ralph Waldo Emerson
So Why Did This Work?
Four Reasons That CI Techniques Work
They help beat the capability trap
They change mental models in ways that allow people to
see new defects
Improvement comes from seeing differently
They foster commitment over compliance
Effective CI cannot be mandated
They foster increasingly disciplined problem solving
- Participants use their collected knowledge more effectively




Escaping the
Capability Trap
T im e Sp e n t W o r k in g
Effort
Time
T im e Sp e n t I m p r o v in g
* =
Seeing Differently
The human brain seeks efficiency in its effort to
process information
A byproduct of this effort is that cues deemed
irrelevant to the problem at hand are filtered out

I
Love
Paris In The
The Springtime
But, relevance is based on our existing understanding of
what determines the performance of the system we are in

The Big Three Improvement Perspectives
5S+
Performance Model- Clutter impedes performance
In the rig move case the used red tags to organize the work place

Value Stream Mapping
Performance model- lower cycle times lead to improved throughput
In the rig move case a simple process walk revealed a wasted
half-day

Variance Reduction
It is not enough to meet specifications (p.334). [The production
workers] job...is to continually reduce variation --W. Edwards
Deming

Commitment vs. Compliance
While CI processes and tools are very powerful, they
wont work unless the front line participates willingly
Effective CI cannot be mandated
Remember the front line always knows more about the
process than you, so
Without commitment to the process nobody will every tell
you where the real defects are
Did the rig crew have to reveal the equipment that they didnt use?
How do you achieve commitment to CI and Energize
People?


An Experiment
The art experiment
Kids asked to paint a picture
Two groups
One given controlling instructionsdont make a mess, be good
One given more rationale and less controlI know its fun to make a mess,
but other students need to paint as well.
Second group approached tasked far more enthusiastically and
produced better pictures (as judged by independent panel)
Other results
Participants in weight-loss studies lose more weight and keep it off longer
when they report being in the program for themselves (as opposed to
pressure from a doctor or loved one)
Patients are more likely to take medication regularly when they can articulate
rationale for their own treatment as opposed to because the doctor told me to
Compliance vs. Commitment
Compliance
People exhibit a particular behavior because they seek reward or
fear retribution
People exhibit a behavior because an action-outcome link was
asserted
Commitment
People exhibit a particular behavior because they believe its the
best thing to do
People exhibit a behavior because they believe that there is an
important action-outcome link


Costs and Benefits of Commitment*
Costs
Commitment takes time and is not under your direct control

Benefits: Committed employees show:
More attention to the right thing when nobody is watching
Lower turnover rates
Higher performance, particularly in customer service and continuous
improvement
Higher attention to out of role and citizenship behaviors
Higher degrees of creativity and spontaneity
Higher degrees of persistence in new behaviors

See Meyer and Allen,1997, Chp. 3, Tyler and Balder, AMJ, 2005.
Effective CI Fosters Commitment
People are more motivated when they feel they have autonomy
over the conduct of their work
CI supports autonomy by giving those that do the work a voice in
designing and improving it

People are more motivated when they can engaged the world
with a sense of competence
CI fosters a sense of competence by recognizing and capitalizing
on knowledge gained through doing work

A sense of inter-personal connection also enhances motivation
CIs emphasis on team-problem solving support sense of
connectedness
There are two theories. One says theres a problem,
lets fix it. The other says we have a problem,
someone is screwing up, lets go beat them up. To
make improvement we could no longer embrace the
second theory, we had to use the first.
Project Name
Contact Name and Phone
1. Define the Problem
5. Build & Execute Plan
4. Propose Improvements
2. Go See & Assess
3. Identify Root Cause
7. What did We Learn & Whats Next?
6. Validate &
Sustain Results
Background Guidelines
Do
Plan
Check
Act
Do
Plan
Check
Act
Learning
Across Assets
Do
Plan
Act
Check
Major Projects Operating Assets
Engineering and HSSE
Professionals Are Critical to
Making Inter-Asset Learning
Possible
Learning
Across Time
Continuous Improvement through
Sustainable Engineering Defect Elimination
- Small Bore Piping and Tubing Project
Victor Singh
Engineering Manager, Trinidad

This document is classified BP Confidential. Distribution is limited to BP authorised recipients only. Except for use among those individuals,
reproduction is prohibited. Further dissemination requires consent of originator, and the adherence to BP Group guidelines for handling classified
information
BP Confidential
High Value Learning Where Did It Start?

ATLANTIS
Small bore piping failure

BP Confidential
BP Confidential
Walk-downs What Did We Find?
Tubing with
unsupported load
Unsupported
gauges
Small bore piping
Incorrectly supported
Improper design of
Small bore connection
Improper bracing of
Small bore piping
Small bore injection port
Incorrectly designed
BP Confidential
BP Confidential
Production Losses due to Small Bore Piping
and Tubing System Failures (2005-2008)
Over 1.5 mmboe of
production losses over
the past 4 years
BP Confidential
Cross-SPU Survey Revealed Many Small-bore Failures
Failure Group Failure mode
Design
Inadequate line sizing l h h 11
Inadequate supports / packing l h h h h l 22
Unsuitable materials l 1
Fabrication
Poor / incorrect welding h h h 15
Misalignment h 5
Maintenance
Overtightening of pressure fittings h l 6
Undertightening of pressure fittings l h 6
Loose bolts or fittings h 5
Non-fitment of fittings following maintenance l h 6
Incorrect seal materials 0
Poor control of work l l h 7
Inspection
Missed on visual inspection 0
Missed on NDT inspection 0
Inadequate Inspection Plan h h h 15
Management
Inadequate MoC h h 10
Incorrect interpretation of Lesson Learned h h 10
Inadequate competency h l 6
Lack of awareness of failure potential l h h h 16
Inadequate procedures l h l 7
Inadequate training h l 6
Vibration
Mechanically-induced fatigue h l h h l l h 23
Flow-induced fatigue h h h h 20
Pulsation-induced fatigue h h 10
Acoustic fatigue 0
Fretting h h h 15
Corrosion
Internal corrosion h h l 11
External corrosion h h 11
Corrosion under insulation (CUI) 0
Sand erosion h h 10
Thermal
Thermal fatigue 0
Thermal shock 0
Low temperature fracture 0
Hydrate formation h 5 Accidental
Mechanical damage h 5
Vehicle impact 0
h
Failure mode implicated in severe incident(s) or HIPO, scores 5
l
Failure mode implicated in minor incident(s), scores 1
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Atlantis
BP Confidential
Failure Group Failure mode
Design
Inadequate line sizing l h h 11
Inadequate supports / packing l h h h h l 22
Unsuitable materials l 1
Fabrication
Poor / incorrect welding h h h 15
Misalignment h 5
Maintenance
Overtightening of pressure fittings h l 6
Undertightening of pressure fittings l h 6
Loose bolts or fittings h 5
Non-fitment of fittings following maintenance l h 6
Incorrect seal materials 0
Poor control of work l l h 7
Inspection
Missed on visual inspection 0
Missed on NDT inspection 0
Inadequate Inspection Plan h h h 15
Management
Inadequate MoC h h 10
Incorrect interpretation of Lesson Learned h h 10
Inadequate competency h l 6
Lack of awareness of failure potential l h h h 16
Inadequate procedures l h l 7
Inadequate training h l 6
Vibration
Mechanically-induced fatigue h l h h l l h 23
Flow-induced fatigue h h h h 20
Pulsation-induced fatigue h h 10
Acoustic fatigue 0
Fretting h h h 15
Corrosion
Internal corrosion h h l 11
External corrosion h h 11
Corrosion under insulation (CUI) 0
Sand erosion h h 10
Thermal
Thermal fatigue 0
Thermal shock 0
Low temperature fracture 0
Hydrate formation h 5 Accidental
Mechanical damage h 5
Vehicle impact 0
h
Failure mode implicated in severe incident(s) or HIPO, scores 5
l
Failure mode implicated in minor incident(s), scores 1
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CI Project Scope
Cross-SPU Survey Revealed Many Small-bore Failures
BP Confidential
What Had We Already Done to Address Failures?
Engaging the Mechanical Network to Codify Learnings
BP Confidential
BP Confidential
Guidance notes being developed by SPU TAs
Do we know enough to provide BP Guidance?
BP Confidential
BP Confidential
CI Project Output
Plant walkdowns within SPUs to identify
piping and tubing at risk
Active sharing and defect elimination through
the Network
Education of contractors around key focus
areas
Small bore piping-related incidents and
failures will be tagged to production losses to
monitor business impact
BP Confidential
BP Confidential
Key Learnings
Reducing unplanned losses will have significant business impact
Significant value can be realised by leveraging our collective
Network knowledge
Working with EPMS contractors and key suppliers provides the
framework for CI
Trending performance in a measureable way is key
Continuous Improvement is a Competitive Advantage
BP Confidential