Tuesday 7 August 2012

Quantified KM success number 45

Another public-domain story showing quantified value from knowledge management; this is one from BP Trinidad, mentioned in this press release, which shows how lesson-learning in the construction of a series of offshore platforms has saved 17% of the overall engineering time for the program.

The press release says
"The engineering work went from 14 months on Cannonball to 13 on Mango, 11 on Cashima and 11 on Savonette. We expect the engineering work for our latest clone NUI, Serrette, to be completed in 9 months, which means that in just eight years, we have been able to reduce our platform engineering execution by five months, which of course translates into improved capital efficiency"
 How do we know this is a result of lessons learned? Well, we need to cross-reference to other publications, such as this one, where we read that
“Serrette is truly the culmination of the significant experience we have been gaining since 2001 when we began plans to construct our first platform locally, the Cannonball. By living the concept of continuous improvement, which is now being embedded across bpTT, we have taken the lessons from each project and applied it to the next project".
The article goes on to describe some of the lessons incorporated into Serrette, and claims that the value of saved time can be in the order of $500k to $1m per day.

The five Trinidad platforms account for a total of 58 months in engineering, which would have been 70 months with no learning (assuming they all took as long as the first). The 12 month savings represents a 17% time saving, and can be valued at between $180m and $360m in total.


Deonie Botha said...

Nick, can one assume from the comment above that lessons learned only contribute to savings in terms of execution time ("the value of saved time")and not in terms of operational excellence? My thinking is that often projects are implemented in a shorter time span but not necessarily more efficient. If a project has been executed five days quicker but resulted in a fatality (as in the case of a mining company) than the targets have not really been achieved?

Nick Milton said...

You can't tell from the figures quoted whether there were other changes, such as increased cost, reduced quality, or compromised safety that made up for the reduced time. However if you read further through the referenced documents, you can see that the project is under budget, and that BPTT has worked more than 13 million manhours without a lost time incident.

So I think in this case the evidence is there that the reduction in time does not come at the expense of other indicators, and represents a real improvement in efficiency, driven by learning.

Time is a key metric in the oil sector, and is often the biggest driver of both cost and value - bigger than raw material costs, for example.

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