Delivering
Delivering
operational
operational
excellence
excellence
www.pw
www.pw
c.com/energy
c.com/energy
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Our insight, your expertise
Our insight, your expertise
3
3
Wor
Wor
king together: delivering operational
king together: delivering operational
excellence
excellence
4
4
E&P core improv
E&P core improv
ement
ement
4
4
Strategic competence management
Strategic competence management
6
6
Asset optimisation
Asset optimisation
8
8
Supply chain management
Supply chain management
1
1
0
0
Key performance indicators (KPIs)
Key performance indicators (KPIs)
12
12
Worl
Worl
dwide presence: our
dwide presence: our
people, our knowledge, our reach
people, our knowledge, our reach
1
1
4
4
Contacts
Contacts
15
15
Getting the very best out of operational activities has become vital for
Getting the very best out of operational activities has become vital for
oil and gas companies. Reserves are becoming more inaccessible and
oil and gas companies. Reserves are becoming more inaccessible and
expensive to get out of the ground. New technologies and engineering
expensive to get out of the ground. New technologies and engineering
solutions need to be maximised. Scarce talent
solutions need to be maximised. Scarce talent
has to go fur
has to go fur
ther
ther
.
.
Midstream and downstream activities need to gain margin. Above all,
Midstream and downstream activities need to gain margin. Above all,
industry safety is critical.
industry safety is critical.
Operational excellence is no longer
Operational excellence is no longer
something to strive for – it is a ‘must
something to strive for – it is a ‘must
have’. PwC’s operational excellence
have’. PwC’s operational excellence
services can ensure you deliver. We’ll
services can ensure you deliver. We’ll
develop a picture with you of the gains
develop a picture with you of the gains
you can make. Then
you can make. Then
we’ll make sure
we’ll make sure
you are on an
you are on an
accelerated path to
accelerated path to
make them real. You’ll have a clear
make them real. You’ll have a clear
understanding of your destination
understanding of your destination
and the confidence to get there fast.
and the confidence to get there fast.
We’re close to the industry and have
We’re close to the industry and have
insight into the challenges you face.
insight into the challenges you face.
We’ve seen the problems companies
We’ve seen the problems companies
often trip over. For example, the
often trip over. For example, the
pitfalls of not involving developers
pitfalls of not involving developers
or receivers early enough, or the
or receivers early enough, or the
difficulties operations and subsurface
difficulties operations and subsurface
sometimes have in collaborating.
sometimes have in collaborating.
We’ve got substantial major project
We’ve got substantial major project
development expertise as well as
development expertise as well as
existing asset optimisation
existing asset optimisation
capabilities.
capabilities.
Our operational excellence solutions
Our operational excellence solutions
give you:
give you:
• A structured approach to assess
• A structured approach to assess
current operations and design
current operations and design
improved processes which are
improved processes which are
linked to strategies.
linked to strategies.
• Supported by a PwC proven
• Supported by a PwC proven
methodology and toolbox that
methodology and toolbox that
accelerates the project, involves
accelerates the project, involves
management and key employees.
management and key employees.
• Support to implement the project,
• Support to implement the project,
securing the ownership and
securing the ownership and
commitment of functions to deliver
commitment of functions to deliver
continuous improvement.
continuous improvement.
• An outcome that results in a
• An outcome that results in a
documented “one way of operating”
documented “one way of operating”
embedded in your business
embedded in your business
management system and with clear
management system and with clear
links to people and competences.
links to people and competences.
PwC is a leading adviser to the global
PwC is a leading adviser to the global
energy industry, working with every
energy industry, working with every
segment of the business – from
segment of the business – from
upstream to midstream to downstream
upstream to midstream to downstream
– to provide business solutions tailored
– to provide business solutions tailored
to meet your needs. For more than
to meet your needs. For more than
100 years, we have helped energy
100 years, we have helped energy
companies succeed.
companies succeed.
We look forward to the opportunity to
We look forward to the opportunity to
work with your company.
work with your company.
Introduction
Introduction
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Our starting point is always your situation and your needs.
Our starting point is always your situation and your needs.
Often the answers are within your organisation. Our structured
Often the answers are within your organisation. Our structured
and proven approach helps you discover them and put them to
and proven approach helps you discover them and put them to
fast, effective use. If you d
fast, effective use. If you d
on’t have the int
on’t have the int
ernal capacity
ernal capacity
, we’ll
, we’ll
help you get the solutions from outside and bring your capability
help you get the solutions from outside and bring your capability
up to speed. And, where appropriate, we’ll involve your key
up to speed. And, where appropriate, we’ll involve your key
partners and Original Equ
partners and Original Equ
ipment Manufac
ipment Manufac
turers (OEM
turers (OEM
s) as
s) as
well to make su
well to make su
re everyone is wor
re everyone is wor
king toget
king toget
her
her
.
.
Your starting point could be a number of Your starting point could be a number of
situations. Our operational excellence situations. Our operational excellence solutions can help you:
solutions can help you: •
• secure operationsecure operational compliancal compliance, frome, from government, industry or internal government, industry or internal corporate procedures
corporate procedures •
• realise subsurface realise subsurface potential, potential, efficientlyefficiently and sustainably
and sustainably •
• improve improve operational reoperational resultssults •
• prepare and prepare and support change, support change, such assuch as bringing in new operational
bringing in new operational
responsibilities or new business areas responsibilities or new business areas •
• introduce new introduce new operational teoperational technologychnology or make better use of existing
or make better use of existing information/systems.
information/systems. An integrated approac
An integrated approachh
Five key areas are covered by our Five key areas are covered by our operational excellence solutions suite: operational excellence solutions suite: •
• E&P E&P core core imprimproveovementment •
• StraStrategitegic competc competence managence managemenementt •
• AssAsset opet optimtimisaisatiotionn •
• SuppSupply chly chain ain manamanagemegementnt •
• Key peKey performanrformance indce indicaticators (KPIsors (KPIs)) Each area offers a specific focus but is Each area offers a specific focus but is also designed to interlink with any also designed to interlink with any requirements you have in the other requirements you have in the other areas to give you a fully integrated and areas to give you a fully integrated and comprehensiv
comprehensive sere service.vice.
Our insight, your expertise
Our insight, your expertise
At an international level, we are the At an international level, we are the
funding patron of t
funding patron of the World Energy he World Energy Council and a longstanding partner and Council and a longstanding partner and sponsor of the World Energy Congress sponsor of the World Energy Congress but also t
but also the World Petroleum Congress.he World Petroleum Congress. PwC’s Annual Global Energy, Utilities and PwC’s Annual Global Energy, Utilities and Mining Conference regularly forms part of Mining Conference regularly forms part of the International Energy Agency’s global the International Energy Agency’s global roadshow to launch its annual
roadshow to launch its annual WorldWorld Energy Outlook.
Energy Outlook.
On hand to cover a wide range of issues
On hand to cover a wide range of issues
Our oil and gas specialist consulting teams Our oil and gas specialist consulting teams work with yours to innovate and grow, work with yours to innovate and grow, improve operations, manage risk and improve operations, manage risk and regulation, and leverage talent.
regulation, and leverage talent. We areWe are ready to assist you in managing a range ready to assist you in managing a range of issues such as international expansion, of issues such as international expansion, investment in and roll-out of new
investment in and roll-out of new technology
technology, regulatory , regulatory reform,reform,
commodity/fuel price volatility and price commodity/fuel price volatility and price risk management, workforce issues, risk management, workforce issues, industry consolidation and asset portfolio industry consolidation and asset portfolio rationalisation, outdated legacy systems rationalisation, outdated legacy systems and investment in new systems, and and investment in new systems, and gaining value from mergers and gaining value from mergers and acquisitions. We also have significant acquisitions. We also have significant experience of delivering large, complex experience of delivering large, complex mega projects across all segments of the mega projects across all segments of the oil and gas industry.
oil and gas industry. Industry-specific expertise
Industry-specific expertise
PwC’s Global Oil and Gas Group provides PwC’s Global Oil and Gas Group provides professional services to companies and professional services to companies and industry players of all sizes, across all industry players of all sizes, across all segments of the
segments of the industry. We provideindustry. We provide industry-specific solutions in the fields of industry-specific solutions in the fields of audit and assurance, transactions and tax. audit and assurance, transactions and tax. And with our extensive experience in the And with our extensive experience in the
sector, we’re able to offer a much sector, we’re able to offer a much widerwider range of consulting services to meet your range of consulting services to meet your more specific needs.
more specific needs.
We are also the partner of choice for many We are also the partner of choice for many medium sized and smaller
medium sized and smaller companies.companies. PwC is on hand when governments and PwC is on hand when governments and regulatory bodies need top-level advice on regulatory bodies need top-level advice on reform of market structures or hands-on reform of market structures or hands-on delivery of the resulting change
delivery of the resulting change programmes.
programmes.
Our team works with you to
Our team works with you to
develop a clear picture of the
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An E&P core impro
An E&P core impro
vement or ‘blu
vement or ‘blu
eprint’ exercise prep
eprint’ exercise prep
ares an
ares an
organisation for new challenges, roles and responsibilities.
organisation for new challenges, roles and responsibilities.
It builds on an extensive s
It builds on an extensive s
et of well-prov
et of well-prov
en and documented
en and documented
E&P process
E&P process
es. It’s designed t
es. It’s designed t
o give a vision of the end st
o give a vision of the end st
ate,
ate,
as well as an integrated set of documents as input to the
as well as an integrated set of documents as input to the
organisation’s business management system. The E&P core
organisation’s business management system. The E&P core
improvement project clarifies the organisation’s goals,
improvement project clarifies the organisation’s goals,
activities, roles and responsibilities and drives change by
activities, roles and responsibilities and drives change by
involving managers and key employees across functions.
involving managers and key employees across functions.
E&P core
E&P core
improvement
improvement
From vision to strate
From vision to strategy gy
Starting on top, capturing the Starting on top, capturing the organisation’s strategy
organisation’s strategy, the , the E&P coreE&P core improvem
improvement approach will ent approach will bridgebridge corporate goals and objectives to each corporate goals and objectives to each function – as drivers for all processes. function – as drivers for all processes. From strateg
From strategy to implementationy to implementation
PwC E&P process
PwC E&P process improveimprovement expertsment experts can support your organisation as an can support your organisation as an initial sparring partner, to develop the initial sparring partner, to develop the operational strategy and to map out the operational strategy and to map out the improvem
improvement journey. Our focus ent journey. Our focus is tois to create real and sustainable impact, and we create real and sustainable impact, and we will support the
will support the whole initiative throughwhole initiative through to implementation – to ensure proper to implementation – to ensure proper adoption.
adoption. A system-agnos
A system-agnostic approachtic approach
The PwC approach to E&P core The PwC approach to E&P core improvem
improvement will ent will provide documentationprovide documentation in a ‘system-neutral’ format, allowing the in a ‘system-neutral’ format, allowing the company to use their preferred system company to use their preferred system toto capture, communicate and maintain capture, communicate and maintain processes in the future.
processes in the future. PwC’s E&P core
PwC’s E&P core improveimprovement projectsment projects have clearly defined deliverables, have clearly defined deliverables, providing documentation and plans for providing documentation and plans for the organisation’s external and internal the organisation’s external and internal interactions, processes and people. interactions, processes and people. An E&P core improvement project will An E&P core improvement project will serve as a foundation for organisational serve as a foundation for organisational readiness, compliance, with a focus on readiness, compliance, with a focus on supporting change and driving continuous supporting change and driving continuous improvement.
improvement.
How PwC can
How PwC can
help
help
We have industry-trained project leaders We have industry-trained project leaders and practitioners to support clients in and practitioners to support clients in end-to-end or specific
to-end or specific functional improvemefunctional improvement.nt. We offer fixed or flexible project models to We offer fixed or flexible project models to drive operational improvement, where we drive operational improvement, where we will create documented processes, with will create documented processes, with
clear roles, responsibilities, interfaces and clear roles, responsibilities, interfaces and dependencies. The project may include dependencies. The project may include information and technology
information and technology requirements,requirements, and development/update of business and development/update of business management systems.
management systems. We have developed a comprehensive but
We have developed a comprehensive but modular toolbox, with industry practices modular toolbox, with industry practices for all relevant domains, to guide and for all relevant domains, to guide and challenge improvement opportunities. challenge improvement opportunities. Our approach is rooted in a methodology Our approach is rooted in a methodology proven in IOC and NOC settings to
proven in IOC and NOC settings to accelerate analysis, design and accelerate analysis, design and implementation – securing
implementation – securing managementmanagement control and key
control and key stakeholder involvemestakeholder involvement.nt.
Working together: delivering operational excellence
Working together: delivering operational excellence
Why do you need ‘E&P
Why do you need ‘E&P
core improvement’?
core improvement’?
It provides a shared,
It provides a shared,
documented “one view”
documented “one view”
of how the organisation
of how the organisation
will work as a prudent
will work as a prudent
operator
operator
,
,
securing
securing
compliance and
compliance and
organisational learning.
organisational learning.
At a glance
At a glance
•• Explora Explorationtion: obtaining access to : obtaining access to acreage, and accelerating evaluationacreage, and accelerating evaluation
and development handover.
and development handover.
•
• Field developme Field developmentnt: fast tracking where possible by standardising: fast tracking where possible by standardising
concepts – to reduce time to first oil.
concepts – to reduce time to first oil.
•
• Major proj Major projectsects: major project approach and control.: major project approach and control.
•
• Preparing for opera Preparing for operationtion: ‘transition to operation’, achieving planned: ‘transition to operation’, achieving planned
production.
production.
•
• OperationsOperations: production efficiency – realising subsurface potential.: production efficiency – realising subsurface potential.
Typical issues
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Working together – improving well
Working together – improving well
delivery processes
delivery processes
Context
Context
A large natio
A large national oil companal oil company withny with
ambitious production targets identified
ambitious production targets identified
the need for improvements within its
the need for improvements within its
well deliv
well delivery processes as key tery processes as key to futureo future
success.
success.
Approach
Approach
To build an understanding of the
To build an understanding of the
company’s current situation, the PwC
company’s current situation, the PwC
team conducted interviews in all
team conducted interviews in all
relevant parts of the organisation as
relevant parts of the organisation as
well as a thorough a
well as a thorough analysis of thenalysis of the
This involved:
This involved:
• Updating and improving process
• Updating and improving process
documentation in the drilling planning
documentation in the drilling planning
phase (where the company was facing
phase (where the company was facing
significant challenges).
significant challenges).
• Developing well delivery stage gates to
• Developing well delivery stage gates to
secure checkpoints, knowledge capture
secure checkpoints, knowledge capture
and lessons learned.
and lessons learned.
• Develop a well categorisation framework
• Develop a well categorisation framework
to ensure that planned wells are
to ensure that planned wells are
projected, contracted and reviewed in
projected, contracted and reviewed in
accordance with impact,cost, complexity
accordance with impact,cost, complexity
and risk.
and risk.
Benefits
Benefits
A new well deliv
A new well delivery process was desigery process was designedned
which clarified act
which clarified activities, roles andivities, roles and
responsibilities between the drilling,
responsibilities between the drilling,
exploration and field development
exploration and field development
departments. The company gained an
departments. The company gained an
assessment of lessons learned from recent
assessment of lessons learned from recent
changes and a well categorisation system
changes and a well categorisation system
was put in place t
was put in place to support focusedo support focused
improvement. We also embedded process
improvement. We also embedded process
Working together – preparing for new
Working together – preparing for new
organisational responsibilities
organisational responsibilities
Context
Context
The organisation had been operating as
The organisation had been operating as
an exploration company. After being
an exploration company. After being
acquired by a European energy
acquired by a European energy
company, the focus changed to include
company, the focus changed to include
both development and operations.
both development and operations.
PwC acted as the organisation’s
PwC acted as the organisation’s
development partner. Our experienced
development partner. Our experienced
implementation team used the PwC
implementation team used the PwC
E&P Blueprint programme to support
E&P Blueprint programme to support
the task of developing and changing
the task of developing and changing
the organisation.
the organisation.
Approach
Approach
Our work covered the development and
Our work covered the development and
documentation of new goals, activities
documentation of new goals, activities
and roles/responsibilities – brought
and roles/responsibilities – brought
together in a new management system.
together in a new management system.
The following activities were carried out
The following activities were carried out
during a six month project:
during a six month project:
• Developed the project and resourcing
• Developed the project and resourcing
plan with the management team.
plan with the management team.
• Established strategic activity maps, with
• Established strategic activity maps, with
roles and responsibilities for each of the
roles and responsibilities for each of the
existing and new departments.
existing and new departments.
• Both the ‘as-is’ and the ‘to-be’ situations
• Both the ‘as-is’ and the ‘to-be’ situations
were doc
were documenteumented to create a trad to create a transitionnsition
plan.
plan.
• Critical interfaces between departments
• Critical interfaces between departments
and functions were clarified to secure
and functions were clarified to secure
ownership of new activities.
ownership of new activities.
• All information produced was assembled
• All information produced was assembled
and inputted to the new management
and inputted to the new management
system.
system.
• Carried out change activities, including
• Carried out change activities, including
the development of training material
the development of training material
and facilitation of training.
and facilitation of training.
Benefits
Benefits
A changed an
A changed and well prepad well prepared organired organisationsation
– staffed in accordance with the new
– staffed in accordance with the new
operating model and activities. All
operating model and activities. All
departments and managers were well
departments and managers were well
prepared – and supported by management
prepared – and supported by management
systems – to carry out the new activities.
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The oil and gas industry is undergoing a The oil and gas industry is undergoing a shift in their workforce in several regions shift in their workforce in several regions where the experienced labour is moving where the experienced labour is moving
into retirement, leaving the company with into retirement, leaving the company with critical gaps in certain areas. Companies critical gaps in certain areas. Companies not planning for this shift could suffer not planning for this shift could suffer from a weakened ability to meet their from a weakened ability to meet their future growth.
future growth.
Based on our extensive experience from Based on our extensive experience from several projects, PwC has developed a several projects, PwC has developed a comprehensiv
comprehensive framework covering e framework covering thethe majority of issues our clients meet with majority of issues our clients meet with regards to management of competence. regards to management of competence. It is a continuous structured process. It is a continuous structured process. By revealing gaps through mapping of By revealing gaps through mapping of existing competence against short and existing competence against short and long term requirements, you can take long term requirements, you can take corrective action.
corrective action.
Working closely together, we will deliver Working closely together, we will deliver a detailed overview of the future
a detailed overview of the future compete
competence requirements, which nce requirements, which willwill support long term strategic goals. This will support long term strategic goals. This will help support safe, efficient operations and help support safe, efficient operations and resource management as well as put you resource management as well as put you inin the best position to explore new business the best position to explore new business opportunities.
opportunities.
Strategic competence management
Strategic competence management
Making the ve
Making the ve
ry best of the talent you have is vit
ry best of the talent you have is vit
al in an era
al in an era
of skills shortages. It’s even more important in the context of
of skills shortages. It’s even more important in the context of
demonstrating competence and effectiveness following a series
demonstrating competence and effectiveness following a series
of major oil and gas industry accidents. Strategic competence
of major oil and gas industry accidents. Strategic competence
management helps you ensure that you have sufficient
management helps you ensure that you have sufficient
capabilities within your E&P areas to support operational
capabilities within your E&P areas to support operational
plans and to be complia
plans and to be complia
nt with external requir
nt with external requir
ements.
ements.
Working together: delivering operational excellence
Working together: delivering operational excellence
How PwC can
How PwC can
help
help
Our toolbox includes accelerators such as Our toolbox includes accelerators such as blueprints for oil
blueprints for oil and gas competenceand gas competence catalogues,
catalogues, competcompetence ence managementmanagement processes, job descriptions and best processes, job descriptions and best practice examples of functional practice examples of functional
requirement specifications for support requirement specifications for support systems. Tailored activities may include: systems. Tailored activities may include: •
• AssessAssessment ment of currof current Hent HR andR and compete
competence strategies against nce strategies against futurefuture needs.
needs. •
• DevDevelopmelopment of coment of competpetenceence management strategies. management strategies. •
• DevDevelopmelopment of competent of competence cataence cataloguelogue to identify competence requirements for to identify competence requirements for positions in the short and long term. positions in the short and long term. •
• RequRequiremeirements for IT sunts for IT support syspport system.tem. •
• Set up of aSet up of an assessn assessment frment framewameworkork including self-assessment.
including self-assessment. •
• DevDevelopmelopment and inent and integrategration oftion of compete
competence management process nce management process maps.maps. •
• ImplImplemenementation of stratetation of strategic compegic competenctencee management.
management. Maximising ta
Maximising talent lent
Strategic competence management helps Strategic competence management helps on a number of fronts:
on a number of fronts: •
• Clear unClear understaderstanding of conding of compempetenctencee requirements to achieve long and short requirements to achieve long and short term strategic goals.
term strategic goals. •
• EfficieEfficient utilint utilisatiosation and allon and allocatication ofon of key resources.
key resources. •
• TTargeargeted recruitted recruitment actiment activitievities.s. •
• TTargeted argeted training training and and development.development. •
• A cleA clear apar appraisapraisal prol process.cess. •
• The skilThe skill sets to rel sets to respond tspond to busineo businessss opportunities.
opportunities. •
• AlignAlignment of bment of businesusiness units to os units to overaverallll strategic objectives.
strategic objectives. •
• Safe Safe and eand efficient fficient operaoperationstions.. •
• AdheAdherencrence to regule to regulatory stanatory standarddards.s. Our experience has shown us that this Our experience has shown us that this integrated holistic approach to
integrated holistic approach to competcompet
Why do you need
Why do you need
‘strategic competence
‘strategic competence
management’?
management’?
In order to know you are
In order to know you are
At a glance
At a glance
•
• Step change phases –Step change phases –thethe
moves from exploration, to
moves from exploration, to
development and production
development and production
require a need for continuous
require a need for continuous
upgrading and alignment of
upgrading and alignment of
competen
competence and sce and skills.kills.
•
• Regulatory scrutiny – Regulatory scrutiny –
increased focus on
increased focus on
competence management
competence management
from oil and gas regulatory
from oil and gas regulatory
bodies, requiring
bodies, requiring improveimprovedd
competen
competence ce planning,planning,
tracking and
tracking and transparencytransparency..
•
• Skills shortages –Skills shortages –the need forthe need for
enhanced talent practices to
enhanced talent practices to
effectively compete in the
effectively compete in the
‘war for talent’.
‘war for talent’.
•
• New business areas – New business areas –
addressing uncertainty in
addressing uncertainty in
sourcing the
sourcing the competecompetence basence base
to meet future business
to meet future business
opportunities.
opportunities.
•
• Optimal use of competences –Optimal use of competences –
matching the right skills to
matching the right skills to
the tasks through efficient
the tasks through efficient
utilisation and allocation of
utilisation and allocation of
resources.
resources.
•
• GenerationaGenerational shifts l shifts ––
addressing the gaps from the
addressing the gaps from the
generational shifts in the
generational shifts in the
workforce early enoug
workforce early enough toh to
train, recruit or develop new
train, recruit or develop new
capabilities within the
capabilities within the
organisation to meet future
organisation to meet future
needs.
needs.
Typical issues
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Working together – competency modeling
Working together – competency modeling
and role profiling
and role profiling
Context
Context Approach Approach
Working together – offshore competence
Working together – offshore competence
management
management
Context
Context
After the merge
After the merger betwer between two nationen two nationalal
oil companies a common operating
oil companies a common operating
model for the 28 offshore production
model for the 28 offshore production
units was implemented. The objective
units was implemented. The objective
of the model was to define one common
of the model was to define one common
operational approach and at the same
operational approach and at the same
time ensure flexibility in the
time ensure flexibility in the sourcingsourcing
of the offshore manpower resources.
of the offshore manpower resources.
To support such flexibility as well as
To support such flexibility as well as
safe and efficient operations, processes
safe and efficient operations, processes
and systems for competence
and systems for competence
management needed to be developed
management needed to be developed
and implemented.
and implemented.
Approach
Approach
We supported the company in a number
We supported the company in a number
of areas:
of areas:
•
• Defining Defining work work processes processes for comfor competenpetencece
management.
management.
•
• DefinDefining the strucing the structure of and buture of and buildiildingng
the competence catalogue and job
the competence catalogue and job
requirements.
requirements.
•
• FacFacilitating wilitating workshops torkshops to collect o collect relevanrelevantt
master data.
master data.
•
• Setting Setting functionafunctional reql requirements uirements for thefor the
supporting system.
supporting system.
•
• ImpImplemelementatntation and rolion and roll-oul-out.t.
•
• TraTraining of ining of leaders leaders and skilleand skilled word workerskers
in using the system.
in using the system.
•
• PMO anPMO and day td day to day suo day suppopport to thert to the
project manager.
project manager.
Bene
Bene
fits
fits
•
• Right cRight compeompetence tence to the to the right task.right task.
•
• Aligned Aligned emploemployee dyee developmevelopment anent andd
company needs including a structured
company needs including a structured
way of han
way of handling emplodling employee devyee developmentelopment..
•
• EasEasier resoier resourcurce allocae allocationtion..
•
• CompliaCompliance wnce with laith laws and ws and regulationregulations.s.
•
• CompeCompetence tence measured measured on the on the samesame
underlying principles.
underlying principles.
•
• ComCompletplete overve overview of curreiew of currentnt
competence base.
competence base.
•
• Ability tAbility to take ao take action on ction on compecompetencetence
gaps.
gaps.
•
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PwC takes a holistic approach to asset PwC takes a holistic approach to asset optimisation. Cutting across functional optimisation. Cutting across functional and organisational boundaries, we take and organisational boundaries, we take an integrated view of the business to an integrated view of the business to understand end to end (E2E) business understand end to end (E2E) business processes and identify where value is processes and identify where value is added to generate business outcomes. added to generate business outcomes. PwC’s three-stage methodology helps you PwC’s three-stage methodology helps you to gain sustainable cost reductions. to gain sustainable cost reductions. 1. Initial insight quantitative analysis – 1. Initial insight quantitative analysis – what are the potential savings?
what are the potential savings?
2. On-site diagnostic: tailored tool for the 2. On-site diagnostic: tailored tool for the task – where are the potential savings? task – where are the potential savings? 3. Improvement plan – how do we realise 3. Improvement plan – how do we realise the savings?
the savings?
It addresses the limitations of traditional It addresses the limitations of traditional approaches by focusing on where the approaches by focusing on where the root causes of problems lie across the root causes of problems lie across the business. This approach is designed to be business. This approach is designed to be backed with board level sponsorship. backed with board level sponsorship.
Asset optimisation
Asset optimisation
The oil and gas industry is asset intensive. But many assets are
The oil and gas industry is asset intensive. But many assets are
aging. This puts a premium on the need for good asset
aging. This puts a premium on the need for good asset
optimisation to manage not only the operational risks, but also
optimisation to manage not only the operational risks, but also
to improve profitability. In particular, for a long period of time
to improve profitability. In particular, for a long period of time
many refineries have been struggling with cost-cutting pressures
many refineries have been struggling with cost-cutting pressures
arising from shrinking margins and old plants with a need for
arising from shrinking margins and old plants with a need for
improvement and investment.
improvement and investment.
Working together: delivering operational excellence
Working together: delivering operational excellence
How PwC can
How PwC can
help
help
Improvem
Improvement plans ent plans typically incorporatetypically incorporate several or all of
several or all of the workstreams below.the workstreams below. Each workstream is comprised of a number Each workstream is comprised of a number of individual elements in pursuit of the of individual elements in pursuit of the overall objective. These areas of focus are overall objective. These areas of focus are deliberately phased to build upon prior deliberately phased to build upon prior successes and bring about sustainable successes and bring about sustainable change within the organisation. change within the organisation. Cost management and control
Cost management and control
Improve cost management discipline, Improve cost management discipline, processes, tools and capabilities to ensure processes, tools and capabilities to ensure that the right spend decisions are made that the right spend decisions are made by the right people with the right by the right people with the right information.
information. Procuremen
Procurement and supply chaint and supply chain
management (PSCM)
management (PSCM)
Drive cost savings, control value
Drive cost savings, control value leakage,leakage, implement end-to-end procurement implement end-to-end procurement process, and establish organisation process, and establish organisation capability to deliver sustainable capability to deliver sustainable improvements.
improvements. Performance manag
Performance managementement
Establish standard management and Establish standard management and performance indicators as well as process performance indicators as well as process to manage business performance down to to manage business performance down to the front line.
the front line.
Maintenance effective
Maintenance effectivenessness
Develop planning, scheduling and Develop planning, scheduling and execution rigour throughout the execution rigour throughout the organisation to shift focus from organisation to shift focus from
accommodating to eliminating defects. accommodating to eliminating defects. Major projects
Major projects
Enhance front end loading, promote Enhance front end loading, promote adherence to the major projects gate adherence to the major projects gate review process, and reduce the cost and review process, and reduce the cost and duration of major projects.
duration of major projects. Project portfolio optimisati
Project portfolio optimisation (PPO)on (PPO)
PPO uses state-of-the-art tools and PPO uses state-of-the-art tools and methodologies to quantify the potential methodologies to quantify the potential cost, benefits and risks of the projects cost, benefits and risks of the projects you are considering or have underway. you are considering or have underway.
The result is a systematic way of assessing The result is a systematic way of assessing and defending capital deployment
and defending capital deployment decisions. PPO begins with creating a decisions. PPO begins with creating a template specific to your
template specific to your organisation’sorganisation’s priorities, idiosyncrasies and data priorities, idiosyncrasies and data availability that will help quantify a availability that will help quantify a project’s value. The resultant
project’s value. The resultant sophisticatedsophisticated project valuation and portfolio
project valuation and portfolio
prioritisation system gives a new level of prioritisation system gives a new level of insight. Leadership will have access to a insight. Leadership will have access to a suite of information to help guide, value suite of information to help guide, value and defend funding decisions, and and defend funding decisions, and increase your organisation’s eff
increase your organisation’s efficiencyiciency.. People and leadershi
People and leadershipp
Improve capabilities and individual Improve capabilities and individual performance management
performance management
Communications and engagement
Communications and engagement
Ensure communications and
Ensure communications and engagemenengagementt at all levels of the organisation. Distill and at all levels of the organisation. Distill and share knowledge between workstreams. share knowledge between workstreams.
Why do you need
Why do you need
‘asset
‘asset
optimisation
optimisation
’?
’?
Because you can’t afford
Because you can’t afford
your assets to become an
your assets to become an
asset drain rather than
asset drain rather than
At a glance
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Working together – performance and profitability
Working together – performance and profitability
improvement for a refinery
improvement for a refinery
Context
Context
Decreasing refinery margins and
Decreasing refinery margins and
•
• On-site On-site diagnostidiagnostic – c – built upbuilt upon theon the
initial insights to identify where the
initial insights to identify where the
Working together – organisational effectiveness
Working together – organisational effectiveness
and efficiency improvements for a refinery
and efficiency improvements for a refinery
Context
Context
The client sought a solution to drive
The client sought a solution to drive
organisational effectiveness and
organisational effectiveness and
efficiency, to sustain prior gains and
efficiency, to sustain prior gains and
close the performance gap at two key
close the performance gap at two key
refineries. PwC needed to work closely
refineries. PwC needed to work closely
with the client to lev
with the client to leverage preerage previousvious
work and effe
work and effectivelctively perform analysis.y perform analysis.
Benefits
Benefits
The output of the diagnostic was a report
The output of the diagnostic was a report
detailing identified sources of inefficiency,
detailing identified sources of inefficiency,
areas of process breakdown, areas of
areas of process breakdown, areas of
misalignment of organisational elements,
misalignment of organisational elements,
and a series of recommendations to
and a series of recommendations to
address these findings to improve
address these findings to improve
organisational effectiveness and efficiency.
organisational effectiveness and efficiency.
The recommendations included specific
The recommendations included specific
interventions and a roadmap for
interventions and a roadmap for
improvement.
improvement.
Approach
Approach
PwC designed a programme that
PwC designed a programme that
leveraged the client’s prior analyses,
leveraged the client’s prior analyses,
identified gaps in organisational
identified gaps in organisational
effectiveness and efficiency, and
effectiveness and efficiency, and
launched actions to capture sustainable
launched actions to capture sustainable
improvements. We used our proven
improvements. We used our proven
methodology, addressing gaps and
methodology, addressing gaps and
closing them in a sustainable manner.
closing them in a sustainable manner.
The approach analysed the processes
The approach analysed the processes
and alignment needed for organisational
and alignment needed for organisational
effectiveness and efficiency. It included
effectiveness and efficiency. It included
a rapid analysis of the client’s
a rapid analysis of the client’s priorprior
work, structur
work, structured interviews, daed interviews, datata
analysis, and synthesis of findings into
analysis, and synthesis of findings into
recommended work plans.
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The ever-evol
The ever-evolving landscape ving landscape supportingsupporting supply chains is always changing, creating supply chains is always changing, creating new risks. Today's C-suite is tasked with new risks. Today's C-suite is tasked with harnessing the opportunities of a global harnessing the opportunities of a global supply chain while managing its
supply chain while managing its
complexities. Inflation is driving up costs complexities. Inflation is driving up costs throughout the chain. Speed
throughout the chain. Speed to marketto market creates greater challenges. Our strategies creates greater challenges. Our strategies help clients avoid supply disruption, help clients avoid supply disruption, quality issues and brand degradation. quality issues and brand degradation. Some of the typical issues that companies Some of the typical issues that companies encounter are highlighted in the ‘contexts’ encounter are highlighted in the ‘contexts’ panel. We have developed a comprehensive panel. We have developed a comprehensive but modular service offering addressing but modular service offering addressing each of the six identified main issues each of the six identified main issues through a dedicated module. The modular through a dedicated module. The modular approach creates a pragmatic toolbox, approach creates a pragmatic toolbox, avoiding the risks of ‘wide scoped supply avoiding the risks of ‘wide scoped supply chain transformation projects’.
chain transformation projects’.
Supply chain management
Supply chain management
The aftermath of the tsunamis in Southeast Asia and Japan
The aftermath of the tsunamis in Southeast Asia and Japan
highlighted the importance of supply chain resilience. Both events
highlighted the importance of supply chain resilience. Both events
left many companies discovering that the quest to maximise the
left many companies discovering that the quest to maximise the
efficiency of their supply chains had severely impaired their ability
efficiency of their supply chains had severely impaired their ability
to cope with disruption. We live in a world where the connections
to cope with disruption. We live in a world where the connections
up and down the supply chain, as well as inside companies and
up and down the supply chain, as well as inside companies and
outside to the world around them, are increasingly important.
outside to the world around them, are increasingly important.
Working together: delivering operational excellence
Working together: delivering operational excellence
How PwC can
How PwC can
help
help
Better connection to interna
Better connection to internal customersl customers
Implement a demand capture system Implement a demand capture system and adopt a customer relationship and adopt a customer relationship management approach to the way management approach to the way Procurement and supply chain Procurement and supply chain management (PSCM) deals with the management (PSCM) deals with the business and end-users to identify business and end-users to identify accurately demand and document accurately demand and document requirements/contrac
requirements/contractual tual commitments.commitments. Improved supplie
Improved supplier performance andr performance and
reliability
reliability
Measure and report supplier/partner Measure and report supplier/partner performance regularly through balanced performance regularly through balanced score cards, target benchmarks and KPIs score cards, target benchmarks and KPIs to manage the effectiveness of the supply to manage the effectiveness of the supply base and focus on delivery (value, speed, base and focus on delivery (value, speed, and service). Segment the supply/partner and service). Segment the supply/partner base and concentrate efforts on working base and concentrate efforts on working with key relationships to deliver the with key relationships to deliver the
most value to the business, throughout most value to the business, throughout the contract life cycle. Pro-actively the contract life cycle. Pro-actively
communicate with them using relationship communicate with them using relationship management and communication plans, management and communication plans, and where possible integrated systems. and where possible integrated systems. Improved str
Improved strategic sourciategic sourcing ng
Develop market intelligence channels and Develop market intelligence channels and use pre-qualification mechanisms/tools. use pre-qualification mechanisms/tools. Establish category management teams, Establish category management teams, supported by dedicated research teams supported by dedicated research teams to seek out and qualify new partners, to seek out and qualify new partners, technologies and sources
technologies and sources of supply.of supply.
Avoiding exce
Avoiding excessive stock levelsssive stock levels
Assess current stocks
Assess current stocks and segmentand segment according to fast-mover, slow-mover, according to fast-mover, slow-mover, non-mover obsolete. Reset desired stock non-mover obsolete. Reset desired stock levels accordingly and dispose of excess levels accordingly and dispose of excess stocks where possible.
stocks where possible.
Strengthening technical capability
Strengthening technical capability
Implement a centrally-led strategic Implement a centrally-led strategic
sourcing function segmented into business sourcing function segmented into business categories and deliver training to create categories and deliver training to create the capability to source long-term contracts the capability to source long-term contracts and category supply deals.
and category supply deals. Separate some,Separate some, or all, of the indirect expenditure and have or all, of the indirect expenditure and have a central team to manage this spend, to a central team to manage this spend, to leave those teams serving the business to leave those teams serving the business to focus on the business requirements. focus on the business requirements.
Why do you need
Why do you need
good ‘supply chain
good ‘supply chain
management’?
management’?
Because failures can be
Because failures can be
At a glance
At a glance
•
• Weak connection to internalWeak connection to internal
customers
customers– errors in PO and– errors in PO and
contractual agreements,
contractual agreements,
creating long lead time.
creating long lead time.
•
• Poor suppl Poor supplier performanceier performance
and reliability
and reliability – insufficient– insufficient
communications,
communications,
inadequate performance
inadequate performance
management and absence
management and absence
of supplier performance
of supplier performance
improvem
improvement ent programmes.programmes.
•
• Strategic sourcingStrategic sourcing– functions– functions
are fragmented and the
are fragmented and the
pre-qualification process is
pre-qualification process is
ineffective. Lack of strategic
ineffective. Lack of strategic
sourcing and category
sourcing and category
management capabilities.
management capabilities.
Typical issues
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Working together – PwC and the Kuwait Oil
Working together – PwC and the Kuwait Oil
Company
Company
Context
Context
The Kuwait Oil Company is a prominent
The Kuwait Oil Company is a prominent
national oil company in the Middle East.
national oil company in the Middle East.
Its supply chain has traditionally worked
Its supply chain has traditionally worked
rather reactively. The company wanted
rather reactively. The company wanted
to improve it as part of a growth strategy
to improve it as part of a growth strategy
targeting a 30% increase in oil
targeting a 30% increase in oil
production capacity and 1000% increase
production capacity and 1000% increase
in non-associated gas production
in non-associated gas production
capacity by 2030.
capacity by 2030.
Benefit
Benefit
PwC supported the development, design,
PwC supported the development, design,
implementation and roll-out of the project
implementation and roll-out of the project
with a comple
with a complete redesigte redesign and optimisan and optimisationtion
of supply chain operational processes.
of supply chain operational processes.
A special focu
A special focus was given to des was given to demandmand
planning, pre-qualification, bid
planning, pre-qualification, bid
management. A new team was created
management. A new team was created
to specialise in strategic sourcing and
to specialise in strategic sourcing and
supplier relationship management.
supplier relationship management.
Approach
Approach
The supply chain improvement
The supply chain improvement
programme consisted of three main
programme consisted of three main
phases:
phases:
•
• A desA design phign phase dase during wuring whichhich
organisation, process and systems
organisation, process and systems
were asse
were assessed, creatssed, created and/ored and/or
improved.
improved.
•
• Once the taOnce the targerget organt organisatisation wasion was
validate
validated, the project shid, the project shifted to afted to a
transition mobilisation phase.
transition mobilisation phase.
•
• An iAn implememplementation ntation phase phase wherewhere
changes were transferred to
changes were transferred to
operation, through training, change
operation, through training, change
management and pilot projects.
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Ke
Ke
y perf
y perf
ormance indicators
ormance indicators
(KPIs)
(KPIs)
Key performance indicators (KP
Key performance indicators (KP
Is) are a type of performance
Is) are a type of performance
measurement commonly used by oil and gas organisations to
measurement commonly used by oil and gas organisations to
evaluate succes
evaluate succes
s. But success can be
s. But success can be
defined in
defined in
very different
very different
ways. Choos
ways. Choos
ing the right KPIs needs a good und
ing the right KPIs needs a good und
erstandi
erstandi
ng of
ng of
what is important t
what is important t
o the organisati
o the organisati
on. But sometime
on. But sometime
s the
s the
understa
understa
nding needed is
nding needed is
insufficiently developed or not
insufficiently developed or not
linked
linked
adequately to KPIs.
adequately to KPIs.
Working together: delivering operational excellence
Working together: delivering operational excellence
How PwC can
How PwC can
help
help
Our service offerings encompass the key Our service offerings encompass the key Enterprise Performance Management Enterprise Performance Management (EPM) elements, including strategic and (EPM) elements, including strategic and midterm planning, value
midterm planning, value management,management, balanced scorecard (strategy maps, KPIs, balanced scorecard (strategy maps, KPIs, performance measures, target setting, performance measures, target setting, corrective and
corrective and preventivpreventive actions).e actions). Oil and gas enterprise performance
Oil and gas enterprise performance
management (EPM) diagnostic
management (EPM) diagnostic
•
• AssessAssessment oment of KPIs anf KPIs and perfod performancrmancee measures in place against oil and gas measures in place against oil and gas leading practices, and in light of the leading practices, and in light of the client’s strategic goals, objectives and client’s strategic goals, objectives and critical success factors.
critical success factors. •
• AssessAssessment of Ement of EPM procPM processes agesses againstainst oil and gas leading practices, including oil and gas leading practices, including strategic, tactical and operational strategic, tactical and operational planning alignment, process and data planning alignment, process and data integration, calendar optimisation, etc. integration, calendar optimisation, etc. •
• AssessAssessment oment of EPM sysf EPM systems items in placn place ine in Having proper KPIs in place increases the
Having proper KPIs in place increases the ability to generate up-to-date performance ability to generate up-to-date performance data that can help assess alignment to data that can help assess alignment to short-, mid- and long-term goals and short-, mid- and long-term goals and objective. The visibility on capital
objective. The visibility on capital projectproject performance, in terms of cost, schedule, performance, in terms of cost, schedule, risks, resources, return is improved. risks, resources, return is improved. Other advantages of setting up KPIs are Other advantages of setting up KPIs are the enhanced ability to measure and the enhanced ability to measure and address vendor performance but also to address vendor performance but also to better assess compliance to health, better assess compliance to health, safetysafety,, security and environment (HSSE)
security and environment (HSSE) standards.
standards.
•
• IdentIdentificatification of gaion of gaps and anps and analysis oalysis off root causes.
root causes. •
• DevDevelopmelopment of a “casent of a “case for change for change”,e”, including
including improveimprovement,ment,
recommendations, expected benefits, recommendations, expected benefits, cost-benefit analysis and
cost-benefit analysis and improvemimprovementent roadmap.
roadmap.
Oil and gas enterprise performance
Oil and gas enterprise performance
management (EPM) improvement
management (EPM) improvement
•
• DesigDesign of nn of new or ew or revisrevised KPed KPIs,Is, performance measures and performance measures and
management dashboards, drawing from management dashboards, drawing from oil and gas global benchmarks.
oil and gas global benchmarks. •
• DesigDesign of new or ren of new or revised pvised plannilanning andng and performance management processes in performance management processes in alignment with IOC and NOC leading alignment with IOC and NOC leading practices.
practices. •
• DefiniDefinition of EPM systtion of EPM systems reqems requiremuirements,ents, development of solution architecture, development of solution architecture, assistance in evaluation and selection of assistance in evaluation and selection of EPM systems and tools that are suited EPM systems and tools that are suited for oil and gas environments.
for oil and gas environments. •
• DesigDesign of nn of new or ew or revisrevised EPed EPMM organisational structure and
organisational structure and governancegovernance model.
model. •
• TrTraininaining and coag and coaching on nching on new EPMew EPM design, and provision of implementation design, and provision of implementation supervision and support.
supervision and support.
