G Masiuk Presentation May 21, 2012 WCQI Anaheim

1. World Conference on Quality and Improvement
May 21-23, 2012
Anaheim, California
Case Studies In
Continuous Quality Improvement
Gordon Masiuk, President
Masiuk Consulting Services Ltd.
www.business-performance-excellence.ca

2. Implementing Quality Improvement
• What has worked well in your organization?
• What are some of your challenges?
• I wish I could….
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3. “If you think you can, or, if you think
you can’t, you’re right!”
Henry Ford
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4. Presentation Overview
• Case Study 1: Reducing Downtime and Improving
Production in an Oil Field Operation
• Case Study 2: Plant Maintenance Initiative to
Reduce Downtime and Improve Production in the
First Half Hour of Start-Up
• Case Study 3: Reducing Corporate Wide Rig
Release to On-Stream Cycle Time and Increasing
Production and Cash Flow For an Oil & Gas
Operation
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5. Focus of the Presentation
• What Was Needed to get the Initiative Started?
• How The Initiative was Identified
• Improvement Methodology Used
• Quality Management Analytical Tools Used
• Implementing and Measuring the Improvements
• Bottom Line Impacts
• During the case studies ask yourself how you
might be able to apply the quality concepts, tools
and measurements in your organization!
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6. Improving Production and Reducing
Downtime in an Oil Field Operation
Case Study 1
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7. What Was Needed to get the Initiative Started?
• This initiative was part of an overall Continuous Quality
Improvement (CQI) pilot process – acquired sponsorship of
executive and senior management
• Focus was to generate bottom line results: improving
production, reducing costs, eliminating waste and downtime
• “Engagement and commitment” of the production supervisor
and his operators vs. their “compliance”
• Formal and just-in-time training and coaching of supervisors,
operators, engineers and others in practical application of CQI
tools and methods, teamwork and leadership effectiveness was
critical
• Full time on-site consultant to guide the initiative
• “Diplomatic Immunity” to allow the area to challenge the status
quo
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8. Key Opportunities
• Operations supervisor wanted to involve his
teams in the improvement of production and
reduction of downtime. This would be the first
exposure of the operations crews to a Continuous
Improvement initiative.
• Operations supervisor was very open to learning
and applying performance management and
continuous improvement techniques. His
engagement and leadership was critical to
success.
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9. Continuous Improvement Approach
• Plan-Do-Check-Act continuous
improvement model
Plan
Continuous
Act Improvement Do
Model
Check
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10. Continuous Improvement Approach
• Used the Plan-Do-Check-Act (PDCA) approach to
design and implement the improvement.
• Started the process by conducting operations/
engineering team brainstorming sessions to understand
their operational issues.
• Identified potential improvement opportunities focused
on reducing downtime or improving production (including
the “vice on the back of the truck”).
• Reviewed one year of production accounting data to
identify specific causes of downtime and lost production
(Pareto Analysis) and to establish a baseline of
performance.
• Engaged operations staff and other disciplines in
problem solving exercises (Root Cause analysis).
• Further fine tuned the accounting data, identified primary
improvement opportunity.
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11. “The best way to get a good idea, is to
get a lot of ideas”
Linus Pauling
Nobel Winning Chemist
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12. Vital Few (Top 20%)
Downtime Shortage/Lost Production
Top 12/57 Vital Few Top 12/56 Vital Few
Reason Hours Reason Barrels
Quota Produced 12900 Quota Produced 20337
BH Pump Failure 5330 BH Pump Failure 15848
Pumped Off 2900 Turnaround 10502
Engine Failure 2809 Recover Load Oil 4189
SI (Flared Gas) 2374 Pumped Off 3310
Recover Load Oil 2326 Engine Failure 3069
Turnaround 1982 Pump Change 2656
Line Break 1821 WCT Request 2336
Road Conditions 1080 Line Break 2142
Pump Change 1043 SI (Flared Gas) 2045
WCT Request 1032 Rods Parted 1384
Shut In 864 Gear Box 1054
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13. Barrels of Oil
Q
0
5000
10000
15000
20000
25000
uo
ta
Pr
BH o du
P ce
d
of downtime
um
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Reasons for Lost Production/Shortage
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nk
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1 Year Baseline Lost Production/Shortage - Pareto Chart
ov
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W
ell
H
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BHP failures accounted for 20.1% of annual lost production out of the 56 categories
h O
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ar i tc
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Production Accounting Pareto Analysis
t te
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D
ow
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14. Hours of Downtime
Q
0
2000
4000
6000
8000
10000
12000
14000
uo
ta
Pr
o du
BH
P ce
um d
p
Fa
ilu
Pu r e
m
pe
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Fa
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( Fla r e
re
R d
ec G
ov as
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Lo
ad
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rn
ar
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nd
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e
R B
oa re
d a k
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on
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m
p
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ha
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eq
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Sh
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ec ea
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oo
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y
Fu
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pr as
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Eq or
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ip ow
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od t Fa
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categories, about 222 - 24 hour days
H p
ig (D
h EF
Lin
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P
re
s
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om
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io
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od
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Reason for Downtime
Lin ea
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W
ax
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ff
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H w
ole IG
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at n
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tP tc
oli h
sh
ed
W R
eig od
1 Year Baseline Downtime Hours - Pareto Chart
ht
G s
en M
ov
er ed
at
or
Fa
Lin i lu
e re
Fr
oz
en
W O
at ff
er
S
w
BHP Failures accounted for 11.7% of the total downtime out of the 57
itc
h
O
il
Sw
H Pr i tc
ig as h
h co
D
is Fa
ch ilu
W ar
ge re
at
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ct re
io
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oo
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ro
ze
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tte
ry
Production Accounting Pareto Analysis
D
ow
n
Lo
w
O
Ta il
nk
Sw
itc
h

15. Pump Jack
Oil Producing Formation
Depth: 1300 – 1500 meters
(4200 – 4900 feet)
Bottom Hole Pump
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16. Bottom Hole Pump Failure – Root Cause Analysis
Methods
Methods Operators
Operators don ’t know optimum production level
Wrong start up/shut down
Inadequate orientation/on -the job training
Wrong strokes/minute Engineers provide inaccurate data
Poor Training Equipment at wrong speed/temp
Improper Improper “Wait till it breaks ” Inadequate orientation/on -the job training
Dewaxers Chemicals
Engineers provide inaccurate data
Poor Inadequate maintenance
Poor
Training Training Different Shifts operate differently
Lack of Procedure Budget cuts
Lack of Procedure
Materials Bottom Hole
Pump Failures
Failures in specific wells
Temperature
Seats/balls failures
Formation
Pump specs not to acid level
Pressure
Rod impacts damage pump
Plugs Pump Rod Stretch
Corrosion
Low cost/low quality pumps
Inadequate pump for application
Environment Machines
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17. Bottom Hole Pump Failure – Root Cause Analysis
Methods Operators
Operators don’t know optimum production level
Wrong start up/shut down Op Inadequate orientation/on-the job training
era
tors
not
Wrong strokes/minute full Engineers provide inaccurate data
y tr
ain
ed
Poor Training
Equipment at wrong speed/temp
Op Inadequate orientation/on-the job training
Improper Improper “Wait till it breaks” era
tors
Dewaxers Chemicals not
full Engineers provide inaccurate data
y tr
Inadequate maintenance ain
Poor Poor ed
Training Training Different Shifts operate differently
Lack of Procedure Budget cuts
Lack of Procedure
Materials Bottom Hole
Pump Failures
Failures in specific wells
Temperature
Seats/balls failures
Formation
Pump specs not to acid level
d Pressure
an
as
G
S Rod impacts damage pump
id
Ac
Plugs Pump Pum Rod Stretch
Corrosion p jack
spe
ed
Low cost/low quality pumps
Low High Inadequate pump for application
Bid failu
Poli re ra
Environment Machines cy te
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18. Improvement: Discovery
• Upon determining that the root cause of BHP
failures was the physical design limitations of the
pump, we needed to determine which wells had
the problem.
• 89 wells had bottom hole pumps – to replace
them all may not have been the right solution.
• As the field operators would rotate through the
area, no one really knew the extent of the
problem, or where it really was.
• A second Pareto Analysis was done to pinpoint
the actual BHP failures and impacts by well.
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19. Second Pareto to Pinpoint the Opportunities
Bottom Hole Pump Failure - Affected Wells:
Impact on Lost Production
100
90 86
Percentage of Lost Production
80
70
60
50
40
30
20
10 6 3.6 2.3 1.1 0.3 0.3 0.2 0.1 0.09
0
D4 B57 D80 B63 D59 D82 D6 D85 D99 B74
Affected Wells
Out of the 89 wells with BHPs, 10 had BHP failures in the past year and
one of those wells had 86% of the lost production!
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