Presentation Title. Gary Downs, Lean Master, Shell Canada. your organization logo here

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1 Presentation Title Gary Downs, Lean Master, Shell Canada your organization logo here

2 Shell Canada Please provide information on your organization - overview and history (slide 1 - who we are)

3 Shell s Canadian Oil Sands Assets

4 Continuous Improvement through Kaizen Events Shell Canada uses Kaizen Events as the tool of choice as it uses the intellect of the organization rather than the brains of the few. The Kaizen events are carried out at the place of work( Gemba) This is a great tool to help start to influence culture within an organization

5 Outbound Logistics Current State Platform Control Maint Dept Platform Engineer Team Platform Maint Team Platform Project Team Wells Team Avg Sailings : 46 Avg Containers : 2080 Avg Air Freight : 275 Supplier Procurement Control Customer TMB Vendor W7 W6 ROS ( Required on Site ) Logistics Control Attainment 39 % Feasibility 39 % D6 INV Team T3 W2 Stock Replenishment High Turn Items Stock Level ( Work Order ) Ordered By Platform OPD 2 D4 OPG 4 Create Requirement Issue order to Vendor OPG 5 W8 OPG 3 Goods Receipted : 1600 D5 Receive Physical Receipt Containers AOB : 220 Failed Goods : 30 / 1600 Weight per Container ( May ): 1700 Total Weight ( may ) 5872 t Avg Weight per Container t M2 T1 Stock Long Term Any Platform T4 D1 M1 Hold Short Term A Platform Preserve Maint Items OPD 1 OPD 1 I2 Preserve 341 Lines Million GBP I1 HOLD 9000 Lines 13 Million GBP Total Lines 109 Million GBP W5 I3 Maint Lines Million GBP OPG 2 Prep for Ship Containers > 21 days 79 Containers 8951 Days ( 24 k ) OPG 1 Move to VLA Deck Utilization: Overall: 69% Utilised 85% Permitted I4 W3 W4 W1 D8 VLA T2 OPD 1 D7 Idle Time 2008: 17213hrs $723 per Hour 12.5M Total Costs Annually 1.1M Avg per Month Dispatch Load and Manifest D2 T1 T2 T3 T4 Transportation Inventory Motion Waiting OverProduction OverProcess Defects InterLocation Moves (Edzell, Yarbrough) Deck Utilization Round Trip To Platform % Direct to Torry Dock/Storage I1 I2 I3 I4 Excess Hold Inventory Excess Stock Excess Prevention Excess VLA M1 Moves between Stock/Hold M2 Open Box Policy W1 Container in VLA In/Out W2 Idle time of Vessel W3 Container Rental Time W4 1 Month Test Window W5 Unused (aged) Hold Material W6 Platform Not Ready (Crew not Available) OPD1 OPD2 W7 Waiting for Material that did not make shipment W8 Waiting on PO/Release Material Unconsumed by Work Order (Platform/VLA/Hold) Failed Automation Order OPG1 OPG2 OPG3 OPG4 OPG5 Use of Space in Vendor Container / Our Container Inspection/Open of Return Container Open-Box Policy- 100% Sample Use of Generics results in Expedite Order New Material on Generics when item is in Stock D1 D2 D3 D4 D5 D6 D7 D8 Inventory of material not directly linked to Install Schedule Attainment Defects of Incorrect Specifications Unavailable Stock (StockOuts) % Defective found during Inspection Vendor Compliance for Lead time, quality VLA flagging process (eliminate errors) Container hire costs (21 days free)

6 Why Kaizen? Show me the Waste Waste Comes in many forms, described using the Seven Wastes : Transportation Inventory Motion Waiting Over production Over processing Defects/Rework Remembered using the acronym T.I.M.W.O.O.D.( do not forget, the waste of Intellect) Another waste is: People (untapped and/or misused resources) Benefits & Expectations of Reducing Waste Less Labor Requirements Less Space Requirements Increased Flexibility Decreased Costs Improved Quality Improved Responsiveness Increased Innovation Increased Employee Enthusiasm 7

7 TRUCK UTILISATION CONTRACOST Waste Can Hide in a Process High Oil Prices today can cover many inefficiencies $100 per Barrell

8 TRUCK UTILISATION CONTRACOST Waste Can Hide in a Process When Oil prices fell, then true performance was shown $40 per Barrel

9 What is a Kaizen Event? The Kaizen is a vehicle to execute improvements quickly A. Pre-Event Preparation: Identify and plan the narrow-scoped event Define the problem with a clear problem statement Measure the baseline and establish goal(s) Determine that a solution is possible and that the stakeholders are aligned and supportive Plan the timing if execution of the event by team B. Execute the Kaizen: Engage the team to validate the problem, gather the elements of the solution, get an OK then test and Implement do-now solutions during the Kaizen C. Sustain with Follow-up Action Items: Follow-up actions typically end 21 days following the Kaizen Kaizen Timeline (Can be 2 months from Start of Preparation, Execution of the Event, then to Sustaining Follow-up) Pre-Event Prep (1 day) 3 wks before event Kaizen Event! (3-5 days) Event Follow-up (15-21 workdays) 10

10 Kaizen Change Readiness Process x Acceptance = Results ( P x A = R ) Rate the new process from 1 to 10 Rate the level of acceptance from 1 to 10 Multiply the two numbers P9 X A2 Results = 18 P7 X A5 Results = 35 Conclusion: You will get better results with a good process that has buy-in from the process participants than a better process without buy-in especially applies to long term results (control phase). 11

11 Development Roadmap for Kaizen Certification Train as Kaizen Leader? Lean & Kaizen Training Kaizen Co-delivery 10% Kaizen Co-Delivery 50% Kaizen Delivery 90% Kaizen Leader Certified Co-deliver Lean & Kaizen Training 1 Co-deliver Lean & Kaizen Training 2 Kaizen Facilitator Certified 12

12 Lessons Learned Central CI team versus Being run in the Line or is there a compromise? Just starting on the Lean journey Been on the Lean journey for a few years Well on its way

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14 A Few Tips! Tell your journey like a story, including lots of photographs in your PowerPoint Limit information about your company to 2 minutes Spend your time on the journey Talk about the good, the bad and the ugly Talk about the success and what key lessons were learned to get there Talk about what you would you do differently Show examples of the tools used eg. tracking sheets, performance metrics Talk about the details of your best practices Talk about how the results were achieved 15

15 The Previous Approach to Replication...and Why it Did Not Work Force fitting approach to replication Negative emotions created by focussing on poor performers Replication pack from Area A Gap Area B Performanc e Gap Area C Area C Area B Area C Area A Area B Tracked replication progress through spreadsheet Area A Time Highlighting non-conformance used as mechanism to enforce replication Project 1 Project 2 Area A Area B Area C Direct BI support ends handed over to the line

16 The DSA Approach to Replication Celebrate success of high performing areas and Why it is Working Menu approach used to tailor replication projects to fit specific area needs Area A Area B Area C work tor Discovers the critical success factors that enable an Area perform well Potential Improvement Manual from Area C Tailor replication to fit Area B Tailor replication to fit Area A Area B Area A Replication area picks what critical success factors they want to implement Performance Area B Area C Area A End result: Positive approach to improve the performance of multiple areas BI support implementation of improvements and capture any further lessons Time Direct BI support all the way through replication

17 Successful outcome of implementation: Satellite stores are placed in strategic locations near the point of use. These stores are used to store lube oil products, including sealed jugs. Apply Example of one of the 18 Potential Improvements Who should use suggested solution: Operations Maintenance Lube oil delivery person 8. Satellite Stores Benefits of successful implementation: Reduce motion waste by having lube oil close to equipments that use it Reduce chance of contamination by holding lube oil in dry sealed area Reduce amount of time spent looking for oil around plant How to detect suggested solution is in place: Satellite store is in place Visual Representation: How to put suggested solution in place (one-off exercise to implement): From lube oil schedule and plot plan, work out strategic position for satellite stores from equipment locations Place satellite store cabinets in identified location Place sealed jugs in satellite stores Take photos and put sustainment charts in place Who should put suggested solution in place: Rotating Equipment Engineer/Operations How to use suggested solution: Satellite stores are used by operations to store oil for the area 5S audit should be in place to ensure the store is maintained to standards Oil is taken from the satellite store whenever needed for the job Oil is then placed back in the satellite store after use

18 Continuous Improvement Additional learning's during replication, these are updated in the potential improvements manual 3. Stock Level Controlled through SAP 4. Knowledge to use SAP MRP How to implement solution documented fully in potential improvement manual through capturing screen shots and a how-to guide developed during workshop 5. Standardised Stock Audit Routine 13. Lube Oil Top-up Process XX. Feedback Loop (Platform to Function) Standard processes from St.Fergus tailored to an offshore environment. Collated in potential improvement manual to use on the next offshore replication Critical success factor removed as realised its encompassed in 18. Notification of Oil Change 18. Notification of Oil Spec Change 17. Performance Tracking through Lube Oil Analyst 8. Satellite Stores Further worked and defined critical success factor with help from functional teams Work with reliability engineers to fully determine how to implement this and think about how we can error proof the sampling process Shearwater implement this differently to St.Fergus but still successfully. Pictures captured and added to potential improvement manual

19 Type organization name here Questions & Answers Maximum: 10 minutes

20 Closing slide Gary Downs Session title and number Please return your completed session evaluation form to the room host

21 Contact Information Please contact your Value Stream Leader or Ian Marshall, Program Chair if you have questions on preparing your presentation. VS1 John Chaput VS2 Rod Smith VS3 Kenneth Leung VS4 Vern Campbell