JW Marriott Houston, Texas June 9, 2014 Improving speed and efficiency while reducing cost in unconventional shale plays Integrated Activity Planning & Scheduling (IAP)
JW Marriott
Houston, Texas
June 9, 2014
Improving speed and efficiency while reducing
cost in unconventional shale plays Integrated Activity Planning & Scheduling (IAP)
2
What keeps the c-suite awake at night?
Stakeholder
demands
Return on
capital
employed
Complexity
CEO CFO COO
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Increased
Complexity
Poor
Execution
Loss of
Control
Poor
Business
Results
Reactive
& Poor
Decisions
3
Increasing business challenges and complexity
Break out of the vicious cycle - “Execution Excellence”
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4
Value chain convergence
Increasing complexity
Merging of physical goods with information flow
Proliferation of available data and information
Improving business intelligence and visualization
Flexibility to quickly adopt and adapt to changes in the business environment
Customizing solutions for different segments of customers and business
Digitalization is disrupting and converging traditional value chains
Financial
supply chain
Physical
supply chain
Information
supply chain
Talent
supply chain
Social media
Mobility
Analytics /
big data
Cloud
Value chain
Digital technologies
Business Digital supply
network
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Unconventional well delivery challenges
Increasing complexity and drilling costs
Immature organizational capability and experience
Reactive decision making
Lack of fully integrated activity planning and scheduling
Inaccurate forecasting and predictability
Supply chain and procurement inefficiencies
Significant non productive time in the field
Field Develop
Plan
Lease & Title App
Staking & Permitting
Water Sourcing
& Mgt Construct Drilling
Complete & Flow Back
Regulatory Complete
Operate
Poor “Execution Excellence” across well delivery value chain
Well Delivery - Concept to production value chain
5
Visibility lacking
between operations
and supply chain
Organizational silos
with reactive
execution
Manual processes
non-standard and
disconnected
Individual well site
focus vs. basin
wide approach
Multiple
disconnected data
and technologies
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Numerous Spreadsheets to “Single Integrated
Activity Plan” Leading to an IAP Management
System Where are organizations today?
Disconnected
Spreadsheets &
Whiteboards
Master Planning &
Scheduling (Offline)
Struggling to implement fully integrated activity planning and
scheduling which is essential for safe and efficient well delivery
~75% ~20%
Integrated Business
Systems – Digitally
Enabled
<5%
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High performing well delivery management system
Strategy
Vision: Adopt a “Factory” style, integrated well delivery approach
7 Copyright © 2014 Accenture All rights reserved.
Units
Pads
Wells
Wells
Digitally enabled
Integration of business systems
8
Seven elements leading companies are getting right
Value Chain
Execution Excellence
Well delivery management system
Supply chain management
Operational excellence
Organizational effectiveness
Business performance management
Strategy deployment
p
Technology enablement
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Reduce
Cycle Time
Reduce
Cost
Improve
Forecasting
Improve
Operational
Excellence
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1. Strategy deployment
Establish true north – WHY?
Define strategic clear goals and objectives
Alignment top to bottom
Holistic basin and well development plan
Limited organizational boundaries and
bureaucratic constraints
Execute strategy more consistently and
reliably than competition
Without strategy, execution is aimless
Without execution, strategy is useless
=
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10
2. Well delivery management system
Digitally enabled integrated activity planning and scheduling
well delivery management system
Integrated activity planning and scheduling (IAP)
Digitally enabled
Efficient
workflow
Integrated
planning
and scheduling
“What if” scenario
planning
Proactive
materials and
management
Production and
financial
forecasting
Cost
controls
Well Delivery Process
Integration of business systems Copyright © 2014 Accenture All rights reserved.
11
Overall integrated schedule for the entire basin
Inventory of ready wells with visibility of potential scheduling issues,
enabling proactive resource, supply chain, pad and rig management
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Integrated with business systems
Resource planning, forecasting and cost management
Integrated schedule with disciplined cost control
Reporting and forecast updates at asset and corporate level
“What if” scenarios
Benefits
Improved forecasting: cost/accruals, forward capital requirements,
production, OPEX and cash flow, driven by integrated well schedule
Predictable financial performance and insight into workforce requirements
Integration of drilling schedule, cost and production forecast to
increase confidence and predictability
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Integration of business systems
Digitally enabled
Current state:
Supplier 1
Supplier 2
Supplier 3
Supplier 4
Well Readiness
“Virtual Warehouse”
Consolidation Point : Vendor managed inventory Reserved inventory Returns Excess Inventory
Production Basin
Transportation Services: Carrier management Planning and execution Freight bill audit and pay Expedited services Milk runs
3. Supply chain management
Future state:
Pro-active “Kit”
Logistics with Managed
Transportation
13
“Our Rig Supervisors
make 700 phone calls
per well delivery”
Proactive kit logistics can reduce field supervision fire fighting to
increase focus on efficient and effective well delivery
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Digitally enabled
Manual work processes
Demand planning and materials management
Structured demand planning
Long term contracts with Information sharing with vendors
Benefits
Reduce cost of goods and services
Enable vendor managed inventory
Standardize bill of material for well types
Limited crisis “spot” purchases
Minimal non productive time associated with lack of materials
“What if” Demand Planning Proactive Materials Management
Shared insight to material and services forecast with suppliers
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Integration of business systems
Digitally enabled
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4. Operational excellence
State of alignment for achieving business strategies
Holistic approach to leveraging improvement methodologies
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
productivity
losses
Reducing
variation in
supply
chain
Sustainably
lowering
costs
Maximizing
value
delivered
from portfolio
Digitally enabled
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16
5. Organizational effectiveness
Strong and visible leadership
Deep workforce engagement
Role clarity and accountability
Right technical, functional skills
and capabilities
Effective knowledge transfer
Sharing of best practices
Corporate culture committed to
continuous and deliberate
improvement
When leaders don’t lead,
Followers won’t follow
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Asset centric organization functionally supported
Integrated Field Development Plan
Fu
ncti
on
s
Asset Team Leads
Supply Chain &
Operations
Drilling
Completions
Facilities
Pad
Construction A
sset T
eam
Asset T
eam
Asset T
eam
Asset T
eam
Asset T
eam
Asset T
eam
Asset
Planner
Asset
Planner
Asset
Planner
Asset
Planner
Planner
Planner
Planner
Master
Schedule
Integrated Planning & Scheduling Meetings
Asset KPI Scorecards
Fu
ncti
on
al K
PI S
co
recard
s
Asset Plans
Functional Schedules
Breaking down organizational silos to operate as a aligned,
collaborative and integrated team with shared goals and metrics
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Digitally Enabled
Lead
Planner
Asset
Planner
Asset
Planner
Inte
gra
ted
Tech
no
log
y P
latf
orm
17
Digitally Enabled
18
6. Business performance management
Insights and information
Visibility of performance
Manage by exception
Increase 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,
planning &
scheduling
metrics
Corporate
metrics
Functional &
Individual
metrics
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Key performance
Indicators and
dashboards
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7. Technology enablement
Connected, collaborative, contextual and capable
Revolutionize how data is acquired and processed
Visualization of entire well delivery value chain—end to end
Intelligent analytics and information
Improve speed, quality and effectiveness of decision making
Every business is a digital business
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Big data Cloud
Data
velocity Mobile
Digital
well Digital
pipeline
Predictive
analytics
Real-time
process
visualization
Integrated activity planning & scheduling systems map
Scheduling • Well Docs • Locations • Rigs • Fracs • Facilities • Start-up
Cost Management
• Program Funding
• Budgeting • Field Est. • Accruals • Actuals
Risk & Issues Management
Rig & Activity Management
Prepare, Pre-Spud Docs: GeoProg,
Permits, Land, etc.
Reports & KPI Scorecards
Workflow Management
Reporting / Tracking
Workflow+Doc Management
Field Development Plan
Workflow and
Analytics
Planning and
Scheduling
Well Info Database
Morning Reports
Wellsite Management
Field Cost Estimating
Inventories and POs
Reporting
Accounting, AFEs, Accruals/Actuals
Maintenance Management
In
terf
ace
Cu
sto
m
Inte
rfa
ce
Bottleneck Reporting
Supply / Demand Forecasting
What-if Analysis
Supply Chain
Integrated S&OP Process
Inte
rfa
ce
Interface Interface Interface
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ERP
Well Systems
20
Oracle’s industry leading project portfolio and value chain planning products
with Accenture’s industry expertise, services and value proposition
Leading project portfolio
and value chain
planning software suites
Comprehensive solution
Integrated planning
and scheduling
What if / scenario
enablement
Electronic workflow
Analytics / reporting
Easy to use
Flexible deployment
Leading global
management consulting,
technology and
outsourcing services
Comprehensive solution
Workflow optimization
Systems Integration
and training
Value driven culture
Fit for purpose
Results focused
Change management
Summary: Jointly developed well delivery solution
KPI Dashboard / Performance Management
Field Development Plan
Well Readiness Rig/Drilling
Schedule Mgmt
Site & Facility Schedule Mgmt
Completions Schedule Mgmt
Cost Management and Forecasting
Supply Chain, Material and Logistics Planning
Integrated to Financials, Procurement, Inventory
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Change management
Digitally enabled
Integration of systems
Seven Key
Organizational Capabilities
Seven ways effective IAP drives value in well delivery
1. Strategy deployment
2. Well delivery management system
3. Supply chain management
4. Operational excellence
5. Organizational effectiveness
6. Business performance management
7. Technology enablement
Value Drivers
Reduce
Cost
Reduce
Cycle Time
Improve
Forecasting
Labor, materials,
goods and services
Capital efficiency
Predictability
HES & field productivity Improve
Operational
Excellence
Copyright © 2014 Accenture All rights reserved.
Improving capital efficiency, time to value, cost and reducing risk
22
Numerous Spreadsheets to “Single Integrated
Activity Plan” Leading to an IAP Management
System Where is your organization today?
Robust integrated digitally enabled activity planning and scheduling
is essential to ensure safe, reliable and cost effective operations
Copyright © 2014 Accenture All rights reserved. 23
Disconnected
Spreadsheets &
Whiteboards
Master Planning &
Scheduling (Offline)
~75% ~20%
Integrated Business
Systems – Digitally
Enabled
<5%
24
Final remarks
“Perfection is not attainable,
but if we chase perfection
we can catch excellence.”
Vince Lombardi
(USA NFL Football Coach)
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