Monday, 16 March 2015

The advantage of not reinventing the wheel

Knowledge Management and Innovation are two sides of the same coin, and only come into conflict when used in the wrong context. Innovating in the wrong context, for example, is known as "reinventing the wheel", and the story quoted below suggests that the value of innovation is usually illusory. 

A recent copy of the internal BP staff magazine, "Horizon," contained an interesting article on Standardisation and the benefits that this can bring when combined with KM when applied to repeat activity. The strategy that BP apply in cases like this is not to reinvent the wheel, and not to tinker with proven designs.

As one of BPs chief engineers says ""There are certainly times when you do need to innovate, but we need to be changing only where it is of value. You have to ask; where do you get real advantage in change, because 90% of the time, we think advantage is illusory, and change costs more."

When the article starts to quote figures, though, you can begin to see the value. BP built three oil platforms in Trinidad, where the second and third were exact copies of the first. The project time for the first was 34 months, 29 months on the second, and 24 months on the third. The platforms were identical, but the performance got better and better, and the build time got shorter and shorter.

Each project was operated with KM as part of the operation philosophy. Each project collected lessons, and applied lessons from the past, and each time this allowed a significant drop in manhours per platform as each facility was designed and built. In effect, they delivered a learning curve, and because the platforms were identical, the learnings could be re-used immediately.

Standardisation brings other benefits, such as the long-term relationship you build with the contractor, and the savings on spares, but the ability to learn and re-use is a massive, massive benefit. If each platform had been different, then each one would have started all over again at the head of the learning curve.

This combination of standardisation  a really pragmatic approach to reining in the risk of "Innovation in the wrong place", and instead delivering the value that comes from a strategic approach to standardisation linked with Knowledge Management and Lesson Learning

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