Friday, April 10, 2015

Lean Six Sigma Can Help Save Oil Field Jobs

This important post affects thousands of men and women working in the oilfield industry. In days past, I’ve read articles (way too many) as key indicators in the field I work in. Lower gas prices mean lower demand and to balance this imbalance, supply is reduced. The Saudi’s and OPEC have done so with the effect of bringing prices up which we’d all complain and point fingers of blame. Now China's economy's tanking that further drives more instability in the world trade market. Regardless, production becomes less of a priority especially when drilling new horizontal fracked wells cost about $60 per barrel.

As we’ve read, trading drops below that threshold and the difference burdened by the oil field producers would use their financial resources to weather the storm. Time and money will determine when this burden affects profits; and as a result, drilling either slows or stops, major projects are put on hold, purchases are held to a minimum and employees are laid off.
Beyond a metaphorical sense, our industry is in a state of war. Sun Tzu said, “The Art of War is of vital importance to the state. It is a matter of life and death; a road either to ruin or safety; hence a subject of inquiry to which no account is to be neglected.”
Livelihoods are positioned for extermination, and as managers we have an obligation to fend off the advances that threaten our security. No one wants to be out of a job unless he or she has ways to prevent it.

As Lean Six Sigma leaders, this is a perfect time to be proactive and create the paradigm and ideas to keep jobs and oil flowing.

One standard practice I highly recommend is to schedule, immediately, “Hoshin Kanri.”

Hoshin Kanri is Toyota Production System term for strategic planning, a tool that, in order to be truly effective, must be cross-functional, promoting cooperation along the value stream, within and between business functions that consists of the following seven management tasks:

Identify the key business issues facing the organization.
1.      Establish measurable business objectives that address these issues.
2.      Define the overall vision and goals.
3.      Develop supporting strategies for pursuing the goals. In the Lean organization, this strategy includes the use of Lean methods and techniques.
4.      Determine the tactics and objectives that facilitate each strategy.
5.      Implement performance measures for every business process.
6.      Measure business fundamentals.

I’ve participated in such events and can attest their effectiveness as long as thoughtful ideas and beliefs are logged. My take with a critical resolve is that, as a result of such a meeting, ideas would develop that would keep people working, sustain a steady flow of income, reduce cost and maintain a healthy profit.

Continuous Improvement requires a cooperation of trust among managers and rank and file alike. Ideas flowing in as Kaizens targeting ways to ways to save jobs and open doors of profitability are subjects that can’t be denied.

As LSS practitioners, we have the wherewithal, knowledge, skills and experience to affect positive change. We are obligated to step up to the plate and create the paradigm for survival if not victory in the field of battle.

So? What do we do?

1.      Schedule a serious Hoshin Kanri with management to develop a sincere paradigm that makes sense for the company and its employees;
2.      Plan a united front and meet with rank and file and ask for serious Kaizens for change;
3.      Gemba walk the worksites and open up ideas for continuous improvement;
4.      Work with finance about what financial resources can be used to reach this worthy goal and objective.
5.      Use meeting information to PDCA – Plan, Do, Check and Act a process that targets and focuses on the goal Moral Law or Mission Statement of excellence, productivity, safety and cost efficiency.
6.      Draft up a plan outlining strengths and weaknesses.
7.      Secure steps that consist of indirect measures instead of direct.
8.      Secure and balance resources that can be used to benefit the plan instead of going against it.
9.      Concentrate of economy of force, efficiency and a “less is more” mindset.

As you can see, this is just a small sampling of what can do to keep people working and maintain an unbeatable position in the oil field industry that we’ve worked so hard to build.
Let’s all participate in a worldwide (if not national) Affinity Diagram to pencil in meaningful solutions to a war that is looming just across the horizon.





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