The Schlumberger R&E transformation restructured both the organization and processes across our more than 65 engineering, manufacturing, and sustaining centers worldwide. Our way of working has been changed, from engineering to shop floor and from supply chain to technical support. As a result, a clear, unified methodology and language have been established, enhancing our ability to form collaborative teams across multiple centers and to optimize manufacturing locations independently of engineering location. To this end, training courses developed in collaboration with the California Institute of Technology and University of Michigan on project management and lean manufacturing, respectively, have been attended by more than 600 engineering project managers and manufacturing professionals. An additional 5,000 engineers were also trained on the new methodologies to firmly establish the transformation throughout the R&E organization. Since the start of the transformation more than $350 million have been invested in organizational structure, global training, and test facilities.
New approaches in Schlumberger product development, job planning and design, and job execution have increased product reliability.
Centralization has made a big change in capex and efficiency in the Wireline Center for Reliability and Efficiency in Port Klang, Malaysia.
While systems and technology provide the foundation for reliability and efficiency, it is the behavior and actions of people that really make a difference. Schlumberger is already an industry leader in procedural adherence. This is embedded in every employee from the first day of employment, but we can still do better—first, by again adopting ideas from other industries, such as the challenge and response methodology of aircraft pilot checklists, and second, by reinforcing procedures across all operations to raise all of them to the same level of performance.
A recent trial run with our North American operations achieved a step change in service reliability—reducing the rate of well perforating misruns by more than 50% in the space of only a few months. Schlumberger personnel positively responded to these initiatives and took pride in delivering more efficient and reliable field performance.
The industry has conventionally determined personnel competency based on training records and years of experience. This must change because there will soon not be enough collective years of experience available. The rapid evolution of technology also negates years of service as a guarantee of relevant experience.
Changing the way we work therefore means adopting a model that ensures we develop people with a combination of skills and proficiency independent of their years of service. Schlumberger is known for best-in-class training and development programs—a unique strength that we have created over more than 40 years. We are now complementing skills development by adopting a rigorous systematic approach with proficiency validation.
Schlumberger has tens of billions of dollars invested in its global fleet of assets, yet asset utilization levels are low compared with leading companies in other industries. This situation offers an opportunity for change to lower the cost of service. Furthermore, the company’s inventory stands at close to $5 billion. Even a small improvement in the management of a global inventory of this magnitude can have a material impact on financial results.
Recognizing that our global inventory is far from optimum, we began by looking at improving its management. Raising responsibility for demand planning above the level of the operating location and consolidating the number of physical stores brought management under the ownership of new regional distribution centers. This reorganization enabled the reduction of overall stock levels by aggregating demand while reducing slow-moving parts and obsolescence through better sharing and minimized lead time.
In a similar manner, changing asset utilization from a decentralized model to a hub-and-spoke model, where resourcing decisions are consolidated at the regional level, offers the same advantage in reducing asset numbers. Since August 2013, the Wireline product line has been piloting this approach at Port Klang, Malaysia. In the first few months of operation, asset utilization has already increased significantly.
Changing the way we work through improving reliability and increasing efficiency is an integral part of our unmatched executional capability—another unique Schlumberger advantage. For more than 15 years we have spent significant time and resources in perfecting the structure of our GeoMarket regions and Product Groups as the platform for continuously improving operating performance. Our unmatched flexibility in product-line management and service deployment is neither easy to deploy nor simple to manage without this structural platform in combination with our long-term experience across industry markets and environments.