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THE SECRETS BEHIND BAKER HUGHES’ WORLD-CLASS OPERATIONAL EXCELLENCE PROGRAMMEThe current low oil price is causing companies in the oil and gas sector to turn their focus inwards and find new ways to drive efficiency, compliance and profitability. This is easier said than done however, due to increasingly stringent industry regulations and growing operating costs. Despite these challenges, one company that is leading the pack is Baker Hughes, with its enterprise-wide operational excellence (OpEx) programme and exemplary safety record. To find out the secrets behind Baker Hughes’ OpEx programme we speak with Jing Li, Director of the Baker Hughes Operating System.

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Jing Li has been with Baker Hughes for over 15 years and is presently Director of the Baker Hughes Operating System, which acts as the foundation of the Baker Hughes Operational Excellence and Continual Improvement programme. This programme facilitates many business aspects including change management, knowledge management, process development, global standardization and execution.

PEOPLE – Competent people are the key to shape or transform an organisation’s OpEx culture. To educate and qualify employees, several programs have been established, including:

Knowledge management program to share best practices and lessons learned; Competence management program to assess and qualify skills; Culture of Quality program to leverage culture to achieve extraordinary performance.

PROCESS – We have developed standardised processes to promote cross functional integration and drive consistency. Ownership and accountability is clearly defined through a process approach, such as:

Field Incident Management Process; Risk Management process; Management of Change process; Manage the Job Cycle process.

Each of these processes is used to manage risk and drive OpEx.

SYSTEM – The Baker Hughes Operating System (BHOS) is really the key to our success in OpEx. It is an enterprise-wide integrated management system which pulls all of the above together. It establishes the foundation to enforce compliance, manage risks and enable flawless execution. The system also provides KPIs to measure implementation effectiveness and identify continual improvement opportunities.

Jing Li: Baker Hughes applies OpEx in three key areas: People, Process and System.

Can you describe some of the ways that Baker Hughes applies OpEx

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The returns from our OpEx programmes have been huge. For example, supported by BHOS and its process approach, Baker Hughes is able to demonstrate worldwide consistency, which allows us to meet industry and regulatory requirements. Several milestones in this area include:

Helping to develop the American Petroleum Institute (API) Q2 specification by participating in the pilot program. Indeed, Baker Hughes was the first service provider to train and certify employees as API Q2 registered practitioners.

In August 2015, Baker Hughes received API Q2 certification for its two Completions facilities in Louisiana USA and successfully passed API Q2 certification audits for multiple product lines in Oman and Brunei.

We were the first service company to achieve the International Association of Drilling Contractors’ (IADC) accreditation for its Competency Management Program and successfully completed our third annual recertification in September 2015.

Baker Hughes became the first company in the industry to receive IADC’s Drilling Industry Training accreditation for its Design for Reliability program in November 2015.

We were also the first company in the industry to achieve the global ISO 9001 multi-site certification in November 2015.

These achievements help us to positively differentiate our performance and aid us to be the preferred supplier for our customers.

Jing Li: OpEx is a journey. We started developing the BHOS and creating a portfolio of supporting programmes about five years ago, which are each in different stages of maturity. It is not a short nor easy journey, but requires commitment from all levels of the company to drive implementation and continual improvement of the programmes.

How long have these initiatives been running and what have the returns been so far?

For example, it provided transparency and visibility to global and local practices, which enabled the organisation to drive standardisation across business units. In turn this allowed the company to be more effective and efficient in delivering our products and services to our clients. In short, OpEx at Baker Hughes has evolved from the business unit level to the enterprise level.

Jing Li: Historically, there used to be many independent OpEx initiatives going on in separate business units. This is often the way most companies operate, but it is certainly not the most efficient way. Once this was realised, the BHOS was developed to provide a centralised platform and governance, to bring all these separate initiatives together into a consistent enterprise approach.

How has your company’s approach to OpEx evolved?

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How has the current low oil price affected your OpEx strategy?

Driven by the business benefits that I have described, the current low oil price has actually been a catalyst for our organisation. It has caused us to accelerate the pace of OpEx strategy adoption and implementation – helping us to cut costs, reduce transactional failures and position us for competitive advantage in a very challenging market.

What is the next step in Baker Hughes OpEx journey?

Without question, our industry is in transition. We are all doing more with much, much less. But rightsizing doesn’t have to mean downgrading. Instead it is an opportunity to do things better. At Baker Hughes, we now have a portfolio of world-class programmes to drive OpEx. There is no need to constantly create new programmes. The key is to follow through, to ensure successful execution and implement continual improvement where identified.

In particular, we are focused on the followings:

Changing employees’ behaviour to follow standard processes and procedures, driving to make every day a perfect execution day.

Managing the crew change by collaborative knowledge sharing and management to ensure business continuity and sustained success.

What advice would you give to other OpEx industry professionals?

1Assess and establish OpEx from a holistic view of People, Process and System;

2Engaging top management and getting their involvement is a must;

3 Use measurement KPIs to drive continual improvement;

4Focus on execution to implement the strategy – results are what matter and all that matter.

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24 - 25 May 2016, Singapore

Don’t miss your chance to meet and learn from the world’s leading experts in OpEx including:

LEARN HOW TO IMPLEMENT YOUR OWN WORLD-CLASS OPEX PROGRAMME AT

Datuk Kamarudin ZakariaVice President of Group HSE and Operational Excellence

Petronas, Malaysia

Ahmed KotbTeam Leader -

Assest ManagementADMA - OPCO

Roy Armishaw VP Operations Asia-Pacific

Petrofac