The name of the game: hiring, training employees with the ability to create efficiencies

The rapid fall of oil prices since the end of 2014 has resulted in companies creating an avalanche of efficiencies throughout the oil and gas supply chain. Generating better economics at the well is a major concern for everyone working in the industry.

E&P companies are constantly on the lookout for new ways to lower costs and improve the ultimate recovery of their oil and gas wells. Companies have figured out how to use technologies and capitalize on equipment pricing opportunities to get more hydrocarbons out of any formation faster and for less money.

While most of the industry’s hyper-focus on efficiency has zeroed in on achieving operational efficiencies in the field, companies are beginning to look at ways to make the overall management of the business more efficient as well.

Six Sigma and Lean, which were born in the manufacturing sector decades ago, are now becoming increasingly popular in the energy sector, according to Scott Randall, a Project Management Instructor with the University of Houston’s Continuing Studies program (UHCS).

Randall has worked domestically and internationally with oil and gas, electric power and service companies such as Boots & Coots International Well Control, Shell, Marathon, Duke Energy International, GDF Suez, BG, PdVSA, Pemex and Aramco.  He is currently working on with the International Association of Drilling Contractors (IADC) on barrier analysis and well control.

Here is how GE defines Six Sigma:

“First, what it is not. It is not a secret society, a slogan or a cliche. Six Sigma is a highly disciplined process that helps us focus on developing and delivering near-perfect products and services.

“Why ‘Sigma’? The word is a statistical term that measures how far a given process deviates from perfection. The central idea behind Six Sigma is that if you can measure how many ‘defects’ you have in a process, you can systematically figure out how to eliminate them and get as close to ‘zero defects’ as possible.”

“Anywhere there is an opportunity to gather lots of information is a good place for Six Sigma,” Randall told Oil & Gas 360®.  And gathering and analyzing lots of information in the oil and gas industry has grown exponentially.

The idea behind a Six Sigma management style is to reduce waste and continually improve business processes using a data-driven approach. The term Six Sigma was coined by a Motorola engineer in the 1980s, as the story goes.

Craving more granularity

According to the iSix Sigma organization, “In the early and mid-1980s with Chairman Bob Galvin at the helm, Motorola engineers decided that the traditional quality levels — measuring defects in thousands of opportunities – didn’t provide enough granularity. Instead, they wanted to measure the defects per million opportunities. Motorola developed this new standard and created the methodology and needed cultural change associated with it. Six Sigma helped Motorola realize powerful bottom-line results in the organization – in fact, they documented more than $16 Billion in savings as a result of Six Sigma efforts,” according to iSix Sigma.

There are professional organizations and universities that teach the principles of achieving Six Sigma to company employees. Many Six Sigma training programs move students through advancing levels that certify whether they are yellow belt, green belt or black belt in Six Sigma and/or Lean Six Sigma.

Six Sigma in the oil & gas supply chain: measuring waste so you can eliminate it from the system

Currently, Six Sigma is being applied to inventory and supply chain management on the oilfield service side, but Randall said there is increasing interest in using the management system to manage rig movements and managed pressure drilling.

“Pad drilling is becoming more like a manufacturing operation,” said Randall. “Instead of moving to multiple locations, you’re drilling multiple wells. The repeatability of that process lends itself to this approach,” he said.

“What is measured gets managed. In the past, a lot of things weren’t measured. Simply the fact that people weren’t doing things in a measured manor meant that they didn’t know how much waste was in the system,” said Randall.

Designing the most efficient frac jobs has become increasingly important for companies in a world of sub-$50 oil prices. Managing the mountains of data associated with oil and gas operations has becoming an increasingly important consideration for companies. Oil and gas technology providers BetaZi, PetroDE and Ubiterra discussed data management at the Software as an Asset Discussion at EnerCom’s The Oil & Gas Conference 21™.

Creating a more valuable workforce with employees who are trained to focus on efficiency

Achieving Six Sigma and Lean certifications make job seekers and existing employees more attractive and more valuable to employers, said Randall. The Six Sigma skills taught at programs such as the one offered by University of Houston’s Continuing Studies program give potential employees the basic knowledge they need to come into any operation and improve efficiencies at the organization.

“People need to have certificates that build up to a core competency. They need to come in and design things like they’re a contractor, even if they’re a full-time employee,” said Randall. “Employers value people who can come in and don’t need to be told exactly what to do. They want people who can come in and work, and adjust course as needed.”

Oil & Gas industry: big data, big improvements

As the oil and gas industry plugs deeper into big data to help it improve efficiencies even further, having more people who can gather data and analyze it will be critical Randall explained. “If there are two areas I would encourage people to look at, they are being able to deal with quantitative data, and being able to come into projects able to frame that information in way that they can start working with it immediately, rather than needing their employer to train them in-house.”

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