AccentureOperationalExcellenceForOil&GasCalgary_Final

June 3, 2014

Hydrocarbon Value Chain Optimization

What Leading Companies Are Getting Right

“Execution Excellence”

2

What keeps the c-suite awake at night?

Stakeholder

demands

Return on

assets

Complexity

CEO CFO COO

Copyright © 2014 Accenture All rights reserved.

Increased

Internal &

External

Complexity

Poor

Execution

Loss of

Control

Poor

Business

Results

Reactive

and Poor

Decisions

Vicious Cycle

3

Increasing business challenges and complexity

Leading companies break out of the vicious cycle with effective

execution excellence


4

7 key dimensions leading companies are getting right

Value chain

execution excellence

Technology enablement

Operational readiness

Operational excellence

Commercial excellence

Organizational effectiveness

Strategy deployment

Strategic challenges

CEO

Financial challenges

CFO

Operational challenges

COO

p

Business performance

management


5

Strategy deployment

• Establish true north – WHY?

• Define strategic clear goals and objectives

• Alignment top to bottom

• Limited organizational boundaries and

bureaucratic constraints

• Execute strategy more consistently and

reliably than competition

Without strategy, execution is aimless

Without execution, strategy is useless

=


6

Value chain convergence

• Move toward a more data driven and efficient organization

• Leverage business intelligence and data visualization

• Efficient and effective flow of physical goods and information

• Flexibility to quickly adopt and adapt to changes in the business environment

• Customize solutions for different segments of customers and requirements

Digitalization is converging traditional value chains

Financial

supply chain

Physical

supply chain

Information

value chain

Talent

Supply chain

Social media

Mobility

Analytics /

big data

Cloud

Value chain

Digital technologies

Business Digital supply

network


7

Technology enablement

• Connected, collaborative, contextual and capable

• Revolutionize how data is acquired and processed

• Visualization of entire value chain—end to end

• Intelligent analytics and information

• Improved speed, quality and effectiveness of decision making

Every business is a digital business

Analytics/

big data Cloud

Data

velocity Mobile

Digital

well &

plant

Digital

pipeline


8

Operational readiness

• Effective and efficient portfolio and project management

• Synchronized concept-to-production value chain

• Robust integrated activity planning and scheduling (IAP)

• Accurate forecasting, demand, cost, material, logistics and resource planning

• Complete data and technology systems integration

Efficient

workflow

Effective portfolio and project time to value and capital efficiency

Integrated activity planning and scheduling

Digitally enabled

Integrated

planning

and schedule

“What if”

scenario

planning

Proactive

materials and

management

Production and

financial

forecasting

Cost

controls


Asset lifecycle management

• Integrated handover plan

• Effective asset data handover and integrity

• Documented key work flows to manage production

• Complete operational playbooks and training

• Integration of project and manufacturing technology systems

Effectively bridging the transition from readiness to excellence

Pre-

Development Development Production Maturity

Operational

Readiness

Operational

Excellence

Lifecycle Management

Time

Pro

du

cti

on

R

ate

X

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10

Operational excellence

• State of alignment for achieving business and operational strategies

• Holistic framework approach to business improvement

• Focused, simplified and constantly attacking complexity

• Corporate culture committed to continuous improvement

• Achieved by design and not by coincidence

• Sustained with the right attitude, the right mindset and the right competencies

Strengthen economic and competitive position of the business

Reducing

cycle-time for

project

delivery

Reducing

production and

process losses

Reducing

variation in

production

Sustainably

lowering

unit costs

Maximizing value

delivered from

portfolio

Effectively

managing

production

decline

Digitally enabled


11

Integrated operations

• Full value chain visibility

• Relocation of staff from remote sites

• Coordination, collaboration and decision making

• Technology enabled

• Talent recruitment and retention

• Health and safety risk reduction

Resources and information enabling operational excellence

Digitally enabled

Real-time

process

visualization

Key performance

Indicators and

dashboards

Collaboration


Integrated

operations‘

center

Predictive

analytics

Condition

assessment

12

Asset optimization

• Overall strategic and operational risk framework

• Advanced monitoring and prediction of asset performance

• Seamless connection of asset performance to maintenance execution

• Proactively managing supply chain and resources

• Integrated technology systems with quality data

Holistic approach to strategic asset optimization aligned to

business objectives

Digitally enabled

Asset data

quality &

management,

integration,

CMMS /

EAM systems

MRO sourcing

and

procurement,

network

inventory

optimization

MRO inventory

management

and movement

Maintenance

execution

planning,

scheduling

T/A, mgmt.

systems and

KPI reporting

Asset /

reliability /

maintenance

strategy

Predictive

analytics

PM/PDM/CBM

routines

Critical

equipment

strategies,

operational

risk

Asset

benchmarking


13

Commercial excellence

• End-to-end sales and operations planning and execution

• Near real-time scenario generation and access to operational information

• Full value chain financial, physical asset and inventory visibility

• Increased responsiveness to the market, internal and external customers

• Integration of applications, systems and refinery optimization models

Closing the gap between planned and actual performance to

improve margins

Digitally enabled


14

Organizational effectiveness

• Strong and visible leadership with

deep workforce engagement

• Right technical, functional skills and

capabilities with effective knowledge

transfer and management

• Effective contingent labor

management

• Sharing of best practices

• Corporate culture committed to

continuous and deliberate

improvement of company

performance.

When leaders don’t lead,

Followers won’t follow


15

Business performance management

• Insights and information

• Visibility of performance

• Manage by exception

• Increased accountability

• Closed loop

management system

High performing organization

Alignment

Near real–time data

collection (asset,

production)

Automatic filtering

and data quality

improvement

Merge of data from

multiple sources

Transform data

into insights

Visualize the Right info

to the Right people

Right time

Digitally enabled

Asset and

program

metrics

Corporate

metrics

Individual

score cards


16

Key value drivers and typical results achieved

Operating margin

Output

Pre-tax ROIC

Business

benefits

Illustrative

Effectively addressing key value chain elements can deliver

significant benefits

Costs

Capital

employed

Risk

management

Key levers Range of typical impact

• Availability

• Reliability

• Throughput

• Product yield

• Operating expenses

• Catalysts/chemicals

• Energy costs

• Productivity

• Working capital

• On-time/on-budget projects

• CAPEX optimization

• Cash management

• Process/personal safety

• Standardization

• Environment protection

• Asset integrity As low as reasonable

practical

% Average throughput improvement

0% 8%

4%

% Average unit cost reduction

0% 15%

7%

% Average capital employed

reduction

0% 6%

3%

Level of operating risk


17

Final remarks

“Perfection is not attainable,

but if we chase perfection

we can catch excellence.”

Vince Lombardi

(USA NFL Football Coach)


Documents

AccentureOperationalExcellenceForOil&GasCalgary_Final