Subscribe

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.

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.
 
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

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.

24097-Proqis-Media-Pack-Banner-300x300
ACCESS 50 VIDEO PRESENTATIONS
Access all 75 Award Finalist Entires
pdf
BTOES AWARD - NO DATE
BTOES UNIVERSAL GRAPHIC - NO DATE
Subscribe to Business Transformation & Operational Excellence Insights Now
btoes19.png
png
Enterprise_architecture
png
financial_services
png
oil_&_gas
png
cultural_transformation
png
8-30
png
15-12
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

Operational Excellence Business Transformation Business Improvement Process Management Continuous Improvement Business Excellence process excellence Process Optimization Process Improvement Leadership Enterprise Excellence Change Management Lean Premium Organizational Excellence Lean Enterprise Lean Six Sigma Execution Excellence Award Finalist Case Study Capability Excellence New Technologies Changing & Improving Company Culture Digital Transformation end-to-end Business Transformation Agile Culture Transformation Execution & Sustaining OpEx Projects Lack of/Need for Resources Leadership Understanding & Buy-In 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 Technology Healthcare and Medical Devices Culture Customer Experience Process Automation Exclusive BTOES Video Presentations Innovation BTOES HEALTH Strategy Execution Industry Report Speaker Presentation Customer Experience Excellence Healthcare Manufacturing Digital AI BPM Artificial Intelligence Lean Manufacturing Automation Robotic Process Automation Business Challenges Robotic Process Automation (RPA) value creation Agility Insurance Systems Engineering digital operations Process Design innovation execution Transformation data management Awards Data Analytics Sustainability Data thought leaders BTOES Presentation Slides Machine Learning Finance RPAs Banking and Capital Markets IT Professional Services Enterprise Excellence culture Sales iBPM Business Process Cultural Transformation Education Electricity Health Insurance HealthcareTechnologies White Paper investment banking BTOES19 Blockchain Cloud Consumer Products & Retail Operational Excellence Model Project Management Python AI Solution Algorithm Automotive and Transportation Banking Digital Bank Digital Global Enterprise Model (D-GEM) Lean Culture Primary Measure of succes business expansion revenue growth Business Intelligence CAIR (Client Advocacy Insights Robot) Government HR Innovation in Healthcare User Interface Accounts Receivable (AR) Cloud Technology Days Sales Outstanding (DSO) Digital Technologies Health Maintenance Organizations Information Systems Interview Learning organization Logistics Services Medicare Operational Excellence Example Optimise Business Processes business process automation transformation journey Adobe Sign Agile Transformation BPaaS Big Data Technology Business Benefits Business Environment CORE CX Capability Cognitive learning Corporate Culture Data Entry Delivery solution Digital Network Digital Network Assistant (DNA) Digitization Drinks E-Signatures Global Technology Government Programs Healthy Culture Implementation Internet Media NPS Natural Language Processing Net Promoter Score Organizational Learning Program Management Portal (PgMP) Relationship Management Risk Management Servant Leadership Six Sigma Strategic Priorities TechXLive Transportation AEGIS Database Automated Money Movement Biopharmaceutical Blue Room Effect BlueFIT Capital Market Case Study Digital Experience Digital Workforce Digitalization ERP Transformation Effective Change Leaders Enterprice Excellence Culture Filmed Entertainment Industry Finance Global Operations (FGO) Financial Services Software Frameworks Hoshin Planning Hospitality Human Capital Kaizen Event Natural Gas Infrastructure Operational Excellence (OpEx) Organizational Change People Engagement Program (PEP!) Pharmaceutical Pharmaceuticals & Life Sciences Project manager ST-Elevation Myocardial Infarction (STEMI) Strategic Business Transformation Supply Chain Management Sustainable Growth Team Leader Development Program (TLDP) Transformation Initiatives Wealth Protection Products Web Logic Portal Workplace Analytics eForms eSignatures BEAM BFARM BTOES17 Big Data Processing Business Analytics Business Growth Business Process Outsourcing (BPO) Centralized Performance Monitoring System Child Care Program Client Feedback Strategy Communication Creative Passion Creativity Denial Management Digital Technology Educational Psychologist Employee Empowerment Global Enterprise Model© (GEM) Hospitality & Construction Human Centered Design Integrated Decision Approach Integrated Decision Making Kaizen Natural Language Processing (NLP) Offering Managers Oil and Gas Optical Character Recognition (OCR) Organizational Goal Pharmaceuticals and Life Sciences Photographing Positive Workplace Environment Price and Routing Tracking (PART) Product Identifier Descriptions (PIDs) Quote to Cash (Q2C) SAP Sales Quota Telecommunications Text Mining Visually Displayed eHealth master text analytics virtual resource management Agile methodology

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.