Subscribe
How to Take Ethics Beyond Algorithms

Webinar

December 8, 2022

Foundation for Value-driven Digital Transformation

Webinar

December 12, 2022

Last chance to meet July 2023 Consumer Duty regulation deadlines

Webinar

January 10, 2023

How to Build Safe AV Applications from Large Datasets

Webinar

January 12, 2023

How to Prioritize Quality while Scaling your AI and Automation Initiatives

Webinar

January 19, 2023

Ethically Designed AI Systems

Webinar

December 8, 2022

Foundation for Value-driven Digital Transformation

Webinar

December 12, 2022

Last chance to meet July 2023 Consumer Duty regulation deadlines

Webinar

January 10, 2023

Scott M. Shemwell
By
November 10, 2017

Assuring Operational Excellence from Contractors and Their Subcontractors II: A Best Practice Model Abstract

Value from Sustained Operational ExcellenceThis piece accompanies our latest BTOES Insights premium content, "Attaining & Sustaining Operational Excellence: A Best Practise Implementation Model"

In Part I, we discussed the need for a systemic approach to Operational Excellence and the need for Strong Bond Governance in today’s complex critical system ecosystems.  This piece will focus on a practical strategy using a documented and successful Best Practice.

Value from Sustained Operational Excellence

Before undertaking any organizational initiative, it is important to develop an understanding of the economic value that can not only be attained but sustained from said strategy.  Value will be different among industry sectors and can be very diverse with individual organizations.

Benchmark data can vary; however, two studies suggest that for many, the value derived is not just significant but can be game changing.  In one case, a Bain & Company study showed that for an upstream oil and gas operator, “actual operations and maintenance hours” were approximately 233% over planned hours.

That same study indicated that “poor planning” accounted for drilling rig inactivity for approximately two-thirds of an unconventional oil well development project.  Conversely, another operator attained over 50% increase in efficiency over a 12-month period with better planning and greater accountability.[i]

McKinsey also reported that over US$ 4.2 billion is available to the global oil and gas sector from operating cost and production improvements.[ii]  According to this firm, these “rollup” numbers were developed from detailed assessment and recommendation across the firms’ portfolios at the asset level.

These cases represent significant value that can be unlocked from operational excellence business models.  It is important to note that, as the McKinsey study suggests, value is attained in smaller increments at the individual asset level Details are important: well below the three bullet PowerPoint presentation to management!

Get a free Chapter of Scott's book, 'Implementing a Culture of Safety: A Roadmap for Performance-Based Compliance'.

A Best Practice Model Overview

Operational Excellence focuses on organizational leadership and how it deploys methodologies and enabling tools to sustain top quartile, measurable performance.  This is a fairly broad, yet demanding requirement on management and the Board of Directors.

Additionally, there are several definitions for “Best Practices,” most of which are industry dependent.  Generically, Wikipedia defines these practices along the lines of a set of processes that are generally accepted to be superior to others.  Usually, they are based on appropriate industry/non-industry standards such as AMA, API, ISO, IEEE or others.

To meet the criteria necessary to create the significant value available from OE, firms must use a Best Practice model that has a major focus at the individual asset and it role/function within its portfolio.  Such a model is depicted in the following graphic.

The focal point of this model is Strong Bond Governance and its risk governance component.  This archetypal recognizes that to attain and sustain Operational Excellence, the role of the firm’s ecosystem is key to its systemic success.

All industries have a significant risk exposure from operations.  Case studies of failure and stakeholder exposures are readily available.  Sadly, incidents continue despite years of effort and major expenditures to try to limit these incidents.

Normal Incident Theory (NAT) purports that highly complex systems such as those found in sectors with Critical Infrastructures are subject to levels of uncertainty that makes occasional failure likely.  Another perspective, High Reliability Organizing (HRO) suggests that uncertainties can be managed more aggressively and incidents are not foretold.[iii]

Keep updated with Scott's blog series: Subscribe to BTOES Insights Now

The Strong Bond Governance approach to Operational Excellence incorporates the HRO risk governance approach.  As mentioned, this is a stronger OE model than others may provide.

Next Steps

There is significant value available to those firms that invest the time and energy to attain and sustain Operational Excellence.  This value is not simply monetary but can take the form of equity (higher P/E ratio) as well as reputational.

This Best Practice is available with reasonable implementation costs.  The final question, “If my competitors create an OE grounded ecosystem and I don’t what will be the impact on my firm?”

Additional information on this Best Practice model and other terms and information discussed herein are available from the accompanying White Paper, Attaining & Sustaining Operational Excellence: A Best Practice Implementation Model.

Screenshot 2017-11-10 12.22.36-1.png

 

Attaining & Sustaining Operational Excellence: A Best Practice Implementation Model

Scott Shemwell, DBA

Download the White Paper Now

 

  

[i]  http://www.bain.com/publications/articles/integrated-planning-the-key-to-upstream-operational-excellence.aspx

[ii]  https://www.mckinseyenergyinsights.com/services/performance-improvement/benchmarking-diagnostics/global-operations-benchmark/

[iii]  http://www.high-reliability.org/Normal-Accident-Theory

 


About the Author

Scott M. Shemwell, D.B.A.

Dr. Shemwell, Managing Director of The Rapid Response Institute is an authority and thought leader in field operations and risk management with over 30 years in the energy sector leading turnaround and transformation processes for global S&P 500 organizations as well as start-up and professional service firms.  He had been directly involved in over $5 billion acquisition and divestitures as well as the management of significant projects and business units.

For more than a decade he has been directly involved with Fortune 100 firms, Government Agencies, and a large number of mid-size as well as start-up firms addressing a number of business and technology implementation problems.  For example, his Economic Value Proposition Matrix® model was developed with and for the energy sector and has been used extensively in CAPEX and Risk assessments.

[i]  https://www.projectmanager.com/?utm_source=google&utm_medium=cpc&utm_campaign=pm-brand-us&utm_term=projectmanager.com-exact&gclid=EAIaIQobChMIocGJhJzc1gIVVJ7ACh33jghsEAAYAiAAEgJK-vD_BwE

[ii]  https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3565747/

[iii]  http://www.pennenergy.com/articles/pennenergy/2014/11/high-reliability-management-in-process-industries-sustained-by-human-factors.html 


Proqis Digital Virtual Conference Series

View our schedule of industry leading free to attend virtual conferences. Each a premier gathering of industry thought leaders and experts sharing key solutions to current challenges.

Download the most comprehensive OpEx Resport in the Industry

The Largest Leadership-Level Business Transformation & Operational Excellence Event

The Business Transformation & Operational Excellence Industry Awards Video Presentation

Proqis Events Schedule

Proqis Digital

The Business Transformation & Operational Excellence Industry Awards

Welcome to BTOES Insights, the content portal for Business Transformation & Operational Excellence opinions, reports & news.

------------------------------ 

EXCLUSIVE SERIES: BTOES17 VIDEO PRESENTATIONS

Full-length speaking sessions from the Business Transformation & Operational Excellence World Summit, accompanied by featured articles from the Speakers themselves.

WATCH NOW

-------------------------------

Submit an Article

Become a Regular Contributor

300x3001c (1)
24097-Proqis-Media-Pack-Banner-300x300
ACCESS 50 VIDEO PRESENTATIONS
Access all 75 Award Finalist Entires
RESEARCH REPORT 2021/2022
BTOES AWARD - NO DATE
BTOES UNIVERSAL GRAPHIC - NO DATE
Subscribe to Business Transformation & Operational Excellence Insights Now
btoes19.png
png
1-Sep-28-2022-02-53-22-62-PM
2-Sep-28-2022-02-53-39-31-PM
3-Sep-28-2022-02-53-48-05-PM
4-Sep-28-2022-02-53-56-24-PM
5-Sep-28-2022-02-54-13-55-PM
6-Sep-28-2022-02-54-25-48-PM
png

Featured Content

  • Best Achievement of Operational Excellence in Technology & Communications: IBM
  • Best Achievement of Operational Excellence in Oil & Gas, Power & Utilities: Black & Veatch
  • Best Achievement in Cultural Transformation to deliver a high performing Operational Excellence culture: NextEra Energy
   
Operational Excellence Frameworks and Learning Resources, Customer Experience, Digital Transformation and more introductions
  • Intelligent BPM Systems: Impact & Opportunity
  • Surviving_the_IT_Talent_deficit.png
  • Six Sigma's Best Kept Secret: Motorola & The Malcolm Baldrige Awards
  • The Value-Switch for Digitalization Initiatives: Business Process Management
  • Process of Process Management: Strategy Execution in a Digital World

Popular Tags

Speaker Presentation Operational Excellence Business Transformation Business Improvement Business Excellence Process Management Continuous Improvement process excellence Process Optimization Process Improvement Leadership Award Finalist Case Study Digital Transformation Enterprise Excellence Change Management Premium Lean Organizational Excellence Lean Enterprise Lean Six Sigma Execution Excellence Capability Excellence New Technologies Changing & Improving Company Culture Agile end-to-end Business Transformation Enterprise Architecture Execution & Sustaining OpEx Projects Lack of/Need for Resources Leadership Understanding & Buy-In Culture Transformation Adapting to Business Trends Changing Customer Demands Failure to Innovate Integrating CI Methodologies Lack of/Need for Skilled Workers Lack of/Need for Support from Employees Maintaining key Priorities Relationships Between Departments BTOES18 Insights Article RPA & Intelligent Automation Live BTOES From Home Financial Services Technology Customer Experience Excellence Healthcare Process Mining iBPM Healthcare and Medical Devices Process Automation Culture Customer Experience Innovation BTOES Video Presentations Exclusive BTOES HEALTH Strategy Execution Cultural Transformation Business Challenges Webinar Digital Process Automation Report Industry Manufacturing Digital Workplace Transformation Robotic Process Automation (RPA) IT Infrastructure & Cloud Strategies Automation BPM Supply Chain Planning innovation execution AI Lean Manufacturing Oil & Gas Robotic Process Automation IT Artificial Intelligence value creation Agility Business Systems Engineering RPAs Insurance Process Design Speaker Article Digital data management Speaker's Interview digital operations Awards thought leaders BTOES Presentation Slides Cloud Machine Learning Data Analytics Digital Transformation Workplace Intelligent Automation Banking and Capital Markets Transformation Data Finance Professional Services Business Process Management Education IT Infrastructure IT Infrastructure & Cloud Strategies Live Blockchain Interview BTOES White Paper investment banking BTOES19 Consumer Products & Retail Enterprise Agile Planning Government Operational Excellence Model Project Management Algorithm Analytics Insight Automotive and Transportation Banking Business Environment Digital Bank Hybrid Work Model Primary Measure of succes Sales Solving Cash Flow with AI business expansion revenue growth Adobe Sign Agile Transformation CoE Delivery solution E-Signatures Electricity Global Technology HealthcareTechnologies Innovation in Healthcare Relationship Management Transportation Accounts Receivable (AR) Big Data Technology CORE Cloud Technology Cognitive learning Days Sales Outstanding (DSO) Logistics Services Operational Excellence Example Risk Management business process automation transformation journey Covid-19 Data Entry Digital Experience Digital Network Digital Network Assistant (DNA) Digitization Drinks Enterprise architecture as an enabler HR Internet Media NPS Net Promoter Score Program Management Portal (PgMP) Six Sigma Sustainability TechXLive The New Era of Automation Automated Money Movement Banking & Financial Services Biopharmaceutical Blue Room Effect Capital Market Creative Passion Digital Transformation Workplace Live Digital Workforce Digitalization ERP Transformation Effective Change Leaders Finance Global Operations (FGO) Financial Services Software Frameworks Hoshin Planning Human Capital Lean Culture Natural Gas Infrastructure Natural Language Processing Organizational Change Pharmaceutical Pharmaceuticals & Life Sciences Project manager Reduce your RPA TCO Supply Chain Management Sustainable Growth The Document is Dead The Fully Automated Contact Center Transformation Initiatives Workplace Analytics eForms eSignatures 3D Thinking BEAM BFARM BTOES17 Big Data Processing Building Your Future Workforce in Insurance Business Analytics Business Growth Business Process Governance Centralized Performance Monitoring System Communication Creativity Digital Technologies Digital Technology Educational Psychologist Energy Management Health Insurance Health Maintenance Organizations Hospitality & Construction Human Centered Design Integrated Decision Approach Integrated Decision Making Intelligent Document Processing Kaizen Medicare Moodset for Excellence Natural Language Processing (NLP) Offering Managers Oil and Gas Optical Character Recognition (OCR) Pharmaceuticals and Life Sciences Photographing Price and Routing Tracking (PART) Process Design Document (PDD) Product Identifier Descriptions (PIDs) Python Quote to Cash (Q2C) Resilience SAP Sales Quota Team Work Telecommunications Text Mining Visually Displayed Work Culture master text analytics virtual resource management

Proqis Digital Virtual Conference Series

View our schedule of industry leading free to attend virtual conferences. Each a premier gathering of industry thought leaders and experts sharing key solutions to current challenges.

Webinars

 

Delivered by Progressive Thought-Leaders

 

Watch On-Demand Recordings For Free

Watch On-Demand Recording - Access all sessions from progressive thought leaders free of charge from our industry leading virtual conferences.
 

Best-In-Class Training

Delivered by the industry's most progressive thought leaders from the world's top brands.
Start learning today!
 

BTOES From Home - On-Demand

The premier Business Transformation & Operational Excellence Conference. Watch sessions on-demand for free. Use code: BFH1120

Proqis Digital Virtual Conference Series

View our schedule of industry leading free to attend virtual conferences. Each a premier gathering of industry thought leaders and experts sharing key solutions to current challenges.

Webinars

 

Delivered by Progressive Thought-Leaders

 

Watch On-Demand Recordings For Free

Watch On-Demand Recording - Access all sessions from progressive thought leaders free of charge from our industry leading virtual conferences.
 

Best-In-Class Training

Delivered by the industry's most progressive thought leaders from the world's top brands.
Start learning today!
 

BTOES From Home - On-Demand

The premier Business Transformation & Operational Excellence Conference. Watch sessions on-demand for free. Use code: BFH1120