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Operational Excellence and Information Management

October 29, 2014

I’m gearing up for next week’s Operational Excellence in Oil and Gas in Houston, so I’ve been thinking a lot about the role information management plays in the path to operational excellence for energy firms.

On the one hand, it’s a no brainer: without accurate information about an asset and the processes that maintain and operate it, you can’t be as efficient, effective, or safe as you would be if you had that information. On the other hand, oil and gas organizations overall have been historically poor at managing information, especially compared to firms in other industries, like banking, financial services, or insurance; so it makes sense that operational information wouldn’t necessarily be optimized yet at most O&G firms.

But there’s a huge payoff for O&G firms that fix information management. Just consider a large asset like a refinery, petrochemical manufacturing plant, or offshore platform: downtime can easily cost $1M per day or more, paper drawings (often stored on site, in a blast zone) would run anywhere from $100M to $500M or more to reproduce if lost, off-PO purchasing reduces supply chain visibility and directly impacts quality, safety, and efficiency, mismanaged as-builts lead to increased downtime (from an hour or two to swap tools or supplies to a few days waiting for the right parts to come in), and poor version control on key operational documents like SOPs can have disastrous results.

A turnaround at one of these assets can last 3 – 6 weeks (at $1M a day or more in lost production) and easily cost $50M, $100M, sometimes as much as $500M and up for the largest facilities. Given these numbers, even a modest increase in efficiency (1%) would yield significant returns for an organization. And given how central information is to managing a turnaround (and how poorly most O&G firms manage their information), it’s not difficult to gain this level of efficiency by doing some simple, lo-fi things to improve information management.

For example, imagine having all relevant engineering drawings, as builts, inspection reports, SOPs, etc., in a single repository, tagged by a few key fields (such as functional location, process area) so that scheduling PM work orders, onboarding contractors, or compiling turnover documentation didn’t require tens, dozens, or hundreds of wasted hours searching for relevant information in shared drives, hard drives, email, desk drawers, file cabinets, and storage rooms.

This would lead to tremendous efficiency and safety gains even without any information management bells and whistles, like workflow, ERP integration, or social collaboration capabilities.

I’m leading a pre-conference workshop next Monday that’s going to tackle this issue head on with 20-30 practitioners from across a range of O&G firms. After a brief level set on what I mean by information management, we’re going to dig in as a group to find tangible, actionable ways that information management can transform the strategy and tactics of petroleum operations, based on our collective real world experience in the trenches working for operational excellence.

I’ll be posting here after the event about what we come up with, but if anyone’s interested in taking part, you can register here – I’d love to have you on board with us.

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