2.3 integrated planning paper

7/26/2019 2.3 Integrated Planning Paper

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Integrated Operations Integrated Planning

Integrated Planning

One road to reach Integrated Operations

Presented at SPE Bergen - 1 Day Seminar, April 23rd

2008http://bergen.spe.no/aktiviteten.cfm?cevid=48260

Harald Sleire

Maintenance Management Department

MARINTEK

Norwegian Marine Technology Research Institute

N7450 Trondheim, Norway

[email protected]

Aud-Marit Wahl

Maintenance Management Department

MARINTEK

Norwegian Marine Technology Research Institute

N7450 Trondheim, Norway

[email protected]

Abstract

Agile and resilient organisations can overcome the effect of

the stochastic nature of offshore operations planning. We

argue through this article that this can be achieved through a

formal planning process creating an Integrated Plan. But the

main challenge is the ability to manage the operations plan

in the execution phase where deviation will occur. The

required agility and resilience is achieved by using a

Operations Support Centre for collaboration, data

enhancement and decision making. For the organisation to

exploit the full potential of the OSC a more network centric

organisation have to be developed as part of an

organisational learning approach. There has to be a balancebetween the network centricity (edge empowerment) and the

hierarchical chain of command for this to be flexible and

responsive enough to handle the diversity of plan-deviation.

Keywords

Operations Planning

Integrated Operations

Oil and Gas Operations

1.

Introduction

Integrated Operations have become the offshore buzz of the

21stcentury and the number of meanings associated with the

term gives room for several interpretations. The common

understanding is that IO will lead to a change in the work

processes in oil and gas exploitation world wide. This

change is mainly caused by the use of computer technology

that makes it possible to transfer huge amounts of

information across enormous distances in real time.

The Norwegian Oil Industry Association (OLF, 2006)

describes the use of information technology, change of work

processes and organizational change (moving of functions)

as key elements in integrated operations. The Norwegian

government define IO as the use of information technology

to achieve better decisions, remote operations of equipment

and processes and to move functions as well as people

onshore (Stortingsmelding 38, 2003-2004). The benefit ofIO is described by the Norwegian petroleum directorate as

increased production, lower operating costs, longer field

lifetimes and improved exploitation of the oil and gas

resources on the Norwegian shelf.1 OLF (2006) has

estimated the value increase on the Norwegian continental

shelf due to integrated operations to at least 250 billions

NKR in 2015. The main reason for this is increased

production resulting from improved decision making.2OLF

(2006) also points to how IO influences health, safety and

environmental (HSE) issues in the industry.

Stortingsmelding nr. 12 (2005-2006) underlines that the

technological challenges are not the main issue within IOany more. Now the focus is on HSE challenges related to

safety, new work processes and integration of information.

The goal is to operate even more safely and efficiently by

practising integrated operations. The ambition is to make the

work processes faster, safer and better and create enhanced

value and safer operations through better dialogue across

specialist disciplines and closer cooperation between

employees on land and offshore.

In military operations the IO concept is described as

Network Centric Warfare, Alberts & Hays (2003). The

objective of NCW is the utilisation of information

management supremacy to empower your network(organisation) for fast and reliable decision making under

uncertainty and changing scenery.

We define IO as; improved decision making through new

ways of working utilising real time information to

collaborate across social, professional, organisational and

geographical boundaries. This interpretations of IO is

limited to Organisational Development either being made

possible through new technology (utilising real time

information) or technological development opening for new

1http://www.npd.no/English/Emner/E-drift/introduksjon.htm2http://www.olf.no/io/aktuelt/?32756.pdf

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http://bergen.spe.no/aktiviteten.cfm?cevid=48260mailto:[email protected]:[email protected]://www.npd.no/English/Emner/E-drift/introduksjon.htmhttp://www.olf.no/io/aktuelt/?32756.pdfhttp://www.olf.no/io/aktuelt/?32756.pdfhttp://www.npd.no/English/Emner/E-drift/introduksjon.htmmailto:[email protected]:[email protected]://bergen.spe.no/aktiviteten.cfm?cevid=48260


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ways of working. IO is in it self not an objective but a

method to achieve other objectives; like better efficiency,

improved safety or other organisational goals.

But Integrated Operations can also be interpreted as an

ultimate goal, a wish to create an operation that is truly

integrated, that is where all parts of the operation is aware of

the dependencies and constraints in the operations and

where a collaborative spirit aims at achieving the operational

optimum, where no sub optimisation on lower level take

place. To reach such an operational state several issues are

mandatory; management dedication, cultural changes

rewarding integration and collaboration, contracts

facilitating this (where more than one company is involved),

measurements (KPI) on IO level rather on discipline level

and the willingness to establish and change the business

processes enabling this form of Integrated Operation.

This article is the first in a series of articles establishing a

path towards an Integrated Operation where we use IO as a

method (as defined first) and seek to achieve the objective of

a truly Integrated Operation. We will in this series of articles

narrow the approach to operations planning and plan

execution as one necessary mean to achieve Integrated

Operations and maintain primary focus on logistic support

as the main customer of the Integrated Plan.

Offshore Operations Planning is a multi discipline activity

where domain knowledge is valued higher than the planning

skill, in particularly the integrated planning skills. The

planning is characterised by high degree of uncertainty in

the ability to complete tasks as planned, due to unpredictable

weather and unexpected underground issues causing

interrupts in drilling, well break downs etc.

The driving force to establish an integrated planning process

is the need to optimise the utilisation of the common

resources the operations depend on, mainly logistic support

and the specialised maintenance resources. This challenge is

similar to what is found in military combat operations and in

the operations of space segments like the International Space

Station. They all depend on logistic support limited by

weather, terrain and unplanned changes in operational

activities. This uncertainty indicates that the logistic

operator faces challenges during service provisioning even if

a very tight demand chain management is established.

Wheelock (1997) claims that if logistics is left unattended,

logistics will in the end command the operations due to the

constraints it represents. The obvious way to overcome such

a problem would be to build in redundancy by using

advanced stores, a high degree of slack in plans and a

general overcapacity in the supply chain. This is normally

not feasible due to cost constraints.

We argue that due to the stochastic nature of the operations

and the limited availability of the logistic support an optimal

integrated plan does not exists. To meet these challenges it

is necessary to create a dynamic organisation with a strong

deviation handling capability. This fall along the lines of

NCW as defined by E.A. Smith Jr. who describes the IO (or

NCW) as an ongoing process where one continuously has to

challenge the way of doing operations, taking into account

the potential new technology represents.

2.

The Integrated Nature of the Offshore Operation

Even when an oil field is in its production phase there is a

need for drilling of new wells, restore damaged wells or

performing other kinds of well service jobs in order to

maintain the production capability of the field. The drilling

plans are developed in collaboration with the geologists and

geophysicists. Drilling represents a major activity on a field

and may impede production, modification or maintenance

work on an installation. A drilling operation is also a large

logistic challenge due to the logistic volumes it drives and

the unpredictability of the drilling operations it self.

The production Optimisation can be viewed as detached

from the physical operation since it involves the analysis of

reservoir performance and predictions as well as plans for

future management of the reservoir. But the consequences of

the analysis are directly influencing the production and as

such the logistic need of the production process. Figure 1

indicates this is a tightly coupled system where the varying

demand of the disciplines is accommodated by the Logistic

Support Service in order for the wheels to keep moving.

Figure 1Asbjrnslett (2005)

In addition to these directly value generating activities there

is a large Maintenance and Modification activity on an

offshore installation. The sole aim of this is to keep the

facility in a safe and efficient production mode for the

duration of the oil field. The need for modifications arises

from new technology advancements, changed operational

requirements or new legislation. Generally modifications

are well planned and executed in large scale campaigns

where the time is crucial in order to minimise the impact on

the production. Maintenance is a continuous activity taking

place in parallel with normal operation. Therefore the

planning of maintenance tasks must be coordinated closely

with the operations. Maintenance is a small customer of the

Logistic Support Service whereas the MODs can be

anything from small to large dependent of the modifications

to be performed.

3.

The need for an Integrated Plan

Using the perspective presented by Charles Perrow (1999)

the offshore operation can be regarded as a tightly coupledsystem. The production system requires a high degree of

cooperation, coordination and co-planning among and

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between different disciplines. It is a high degree of

dependability between logistic support and tasks like drilling

and well service, production, maintenance and modifications

as pictured in figure 1. Taking away or even diminish one

part of the system will have consequences for other parts of

the operation. This may lead to what Perrow (1999)

describes as incidents. Lack of supplies or personnel to do

the work may disrupt or even stop the production of oil or

gas. The interactions between the different components of

the production system are in addition rather complex

because of the stochastic nature of the operation.

Interruptions in drilling, underground surprises and

unpredictable weather as well as limited resources, leads to

unfamiliar, unplanned or unexpected sequences of events

that may be difficult to comprehend for the operators of the

system.

Since the number of constraints during planning is large and

is one aspect of planning that need

is done in a highly distributed manner.

lex when tasks are

some constraints are nested and barely comprehensible it is

very hard to maintain a proper overview of the operations in

order to make good local plans. This entangled planning

scenario calls for an integrated process rather than

segregated local planning. The main bulk of tasks can be

handled locally by the discipline planning to keep the

integrated plans on a level where they add value to the

overall operations.

Resource levelling

integration if the resources are shared between several

disciplines. This is the case with the supply chain, the

offshore facility and specialised resources (like scaffolding

etc.). Since the demand for these common resources arise

from different disciplines it is unlikely that the resource

managers themselves can level the resources since they do

not have insight in the discipline priorities and the

background for the demand. Therefore an integrated or

collaborative approach needs to be pursued also for this

aspect of planning.

Task identification

Within the disciplines the task information is collected and

maintained. General maintenance task are reported centrally

and the task are then pulled up when producing the

operations and maintenance plans. One of the short comings

of a distributed system for capturing tasks is that

information about the context in which the task was

nominated often gets lost. This impedes the process of

prioritising and selecting tasks. . This point in the direction

of collaboration in order to resolve what is the optimum list

of tasks for the next planning period.

Task prioritisation becomes comp

nominated from different disciplines and tasks are not

directly comparable, its like comparing apples and pears.

So the development of more comprehensive prioritisation

mechanism seams unavoidable. The question is if it is

possible to make the priorities rule based and if so, is it

possible to define common parameters where a rule based

system will work. Only dealing with cost of implementation

is not good enough. The use of NPV (Net Present Value) for

the investment can be used to compare tasks. This opens

the Pandoras Box of how do you calculate the effect of not

performing a particular task so we regard is not particularly

feasible. The most probable way of solving this is through

collaboration and integrated prioritisation of task influencing

more than one discipline.

It would be beneficial to introduce a Risking method for task

4.

Demand management

nformation is the knowledge

ging demands exists;

come imperfections in the operation with

to be able to foresee potential problems in task execution.

This involves determining the probability for the task to be

performed as planned. This thought is based on an

assumption that 80% of all tasks are business as usual and

15% represents known rework or problems (standard

operating procedures), whereas 5% represents new

challenges that have no immediate solution. The 20% of task

creating disturbances may take up to 80% of the operations

support problem solving capability (the numbers used are

only examples). In this scenario the risking of tasks done by

the disciplines will give an early indication to the operations

planners and support functions where to focus the effort to

build the plan more robust, and also to scale resources in

order to be able to respond to potential changes in the plan.

As the interpretation of risk to some extent is subjective and

context dependent, the evaluation of risk is ideally

performed in collaboration in order to achieve and share a

common interpretation of the situation.

In logistic planning the vital i

about the demand, the variation and the probability

distribution of the demand. Only with this knowledge is it

possible to optimise the logistic supply chain. Thus it seems

as a contradiction of terms to try to establish a tight demand

management regime for offshore operations because of the

stochastic elements. We argue that may be as much as 80%

of the deviations are known deviations, not in the sense

that they where predictable, but in the sense that they have

been observed earlier and as such have a known solution.

Therefore it is vital to elaborate the planning process, not

only to deal with task planning and resource constraint

levelling, but to include the demand capture and levelling

dimension as well. In order to be able to manage the supply

chain as one of the planning constraints it is necessary to

have oversight over the demands.

Several approaches to mana

standardisation of material packages, real time usage

monitoring (online stock) and utilisation of production plans

as demand indicators. All these methods are suitable for

production plans with serial production and predictability in

demand. In the offshore operations an alternative approach

has to be pursued.

We propose to over

organisational means. And the concept of information

sharing, collaboration and the joint development of demandprofiles between stakeholders and logistic support seem as

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one way to go. This correlates with the approach to plan

deviation management, as discussed later in the article.

5.

Integrated Planning Process

There are several aspects of the offshore operations that

require coordination of planning activities. One of the major

organisational challenges in establishing an integrated

planning process is the multi discipline setting where

disciplines are operated almost as separate business units.

This organisational structure means that there is no

hierarchical organisational entity on a higher level that will

host the integrated planning function. The Integrated

Planning function both supports and makes operational

decisions on behalf of other disciplines. This concept needs

maturing and management support to evolve to an operative

tool.

In order for Integrated Planning to work its mandate have to

be established and the disciplines have to accept the added

value planning gives to their own operation. Even if the

planning process belongs to the disciplines there also needs

to be staff dedicated as planners, maintaining the plan and

coaching the process.

As outlined in the figure below the Integrated Planning

Process (IPL) is based on planning input from the

disciplines. This input should be standardised in order to be

able to handle the information equally. In addition a task

database will be used to capture all activity requests. This is

typically done through ERP solutions like SAP.

Figure 2 Integrated Planning Process

The IPL process contains activities like scheduling against

known constraints, resource levelling, resource conflict

resolution, plan acceptance and plan dissemination. The

dissemination of the plan is important as the operational

plans of the disciplines have to be updated to reflect the

agreement made in the IPL.

In parallel with the IPL a demand mapping and resolution

process will run between the disciplines and Logistic

Support. To expose all demands related to the activity plans,

Logistic Support should participate in the IPL process to

answer to the feasibility of different operational proposals.

In this way the logistics will be managed correctly as a

constraint in the IPL process.

After the Integrated Plan is made it has to be put in to action.

We propose that an Operations Support Centre (OSC) is

developed to manage the Integrated Plan.The OSC may bedescribed as a hub where complex decisions are made based

on the interpretation of vast amount of information. Both

technological and organizational characteristics distinguish

it from more traditional work settings. Extended use of

computer technology, for instance messaging, video and net

meetings are often used as tools in the work processes. It

will be based on the same characteristics Suchman (1997)

uses to describe a centre of coordination:

A strict division of labour in which different

personnel have differing responsibilities and

obligations

Personal are co-located in the same physical

domain, but continually interact with others

outside that domain

Real time and asynchronously coordination with

the activities of others

The information needed to accomplish individual

tasks is dispersed amongst equipment and

personnel within (and outside) the domain

Different tools and technologies are available to

facilitate the co-ordination of tasks.

The main objective of the OSC is to maintain the plan up to

date and to resolve conflicts and changes to the agreed plan.

The OSC will function as a workplace for planners,

maintenance managers, logistics-, resource- and material-

planners as well as being a part of a larger network of

activities in the organisation. Suchman (1996) describes how

the actors in a control room come to awareness of the

problems at hand from their particular organizational and

physical place, how they develop a shared orientation to the

situation and establish places for their joint work. She points

to how the location of the room, organizational, spatial and

temporal, sets up the conditions within which the work gets

done.

The OSC have to establish it self as a value adding entityduring handling of plan deviations, therefore building the

trust and reliable performance reputation is instrumental for

the OSC ability to operate. It is an organisational

development challenge to instantiate the OSC with the

correct mandate and role, and to make it an accepted player

of the plan execution and plan deviation management.

6.

A change capable organisation

Cooperation in teams is an important aspect of the concept

of expertise used by Weick and Sutcliffe (2007). They view

expertise as a combination of knowledge, experience,

learning and intuitions, seldom found in one person butmade possible by a team of people, and say that one of the

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characteristics of a mindful organisation is that decision

making migrates to informal networks of expertise rather

than organisational rank. Rochlin (1989) uses the term

epistemic networks to describe the resilience that is

achieved when people self organize into ad hoc networks to

provide expert problem solving. These thoughts are also

supported in the work of Alberts & Hays (2003) where they

argue that agility is achieved through edge empowered

operations with ability to self synchronise.

We argue that an integrated planning and demand

management process will improve by using the Integrated

Plan as a Boundary Object(Star & Griesemer 1989; Wenger1998; Wenger 2000). Boundary objects connect different

social worlds and enhance cooperation and communication

between different communities of practice and gives

possibilities for learning. Star & Griesemer (1989) says that

boundary objects are flexible enough to adapt to local needs,

but also robust enough to maintain an identity across sites.

According to Wenger (1998, 2000) learning will happen

when members from a community of practice are exposed to

different forms of practice. Rolland/Heps/Montairo

(2006) show how boundary objects and CIS (Common

Information Spaces) are dynamic and have to be

renegotiated in order to be relevant to a changing operative

reality in offshore operations and to establish a negotiated

common perception of what has to be done and what

limitation is imminent in the operations ahead. This is

particularly true for an integrated plan that in the extreme

case have to be renegotiated continually if the operative

reality changes.

Figure 3Perry-Class Frigate Combat Management System(GENESS)

Since we can not build plans robust enough to not

experience changes we need to build an organisation capable

of handling the deviations that will occur in the plan, the

major success criteria of integrated operations will be the

ability to establish a change capable organisation, also

known as agile and resilient operations. In this context the

agile capability is related to the ability to take advantage of a

deviation and turning it into something positive with respect

to the business objectives. The resilient capability is the

ability to recover from perturbations or continuous stress

and being able to maintain functioning.

The major elements of being change capable are; (i) having

overview over the actual situation and the resource

situations, (ii) having the required resources to do something

with the change at hand. This functionality is to some extent

perfected in military combat management system like the

depicted ship born combat management room below.

For planners and logistic support to be able to comprehend

the situation in the operating disciplines a method of

keeping them informed have to establish. This can range

from traditional meetings, virtual meeting places, co-

location, web services, advanced situation status display

concepts and applications. The utilisation of business

intelligence SW for data enhancement can prove effective to

enhance situation awareness. The establishment of common

situation awareness is mandatory for the success of IPL as a

method to create an agile and resilient operation. With

common situation awareness and the overview over theactual resource utilisation and resource plans the OSC

community shall be in a position to evaluate the effect of

deviations and also advice about opportunities and potential

recovery paths when a deviation to the plan has occurred. In

performing this activity it is potentially viable to have

simulators or other tools at hand to be able sort out the

consequence of a change. It is believed that this evaluation

will be performed in a collaborative manner.

When a response to a deviation has been found this has to be

put into action and the OSC must have access to the logistic

resources in such a way that they directly can give the order

of implementing the change. Resources belonging to otherdisciplines will be operated by them self, but there has to be

established chain of command ensuring the effectuation of

the revised plans. This indicates that we have dualistic

organisation utilising a network centric approach for

problem solving and a traditional hierarchy for

implementation of solutions. This duality has to be well

defined to avoid blurring the responsibility. The thought of a

duality deviate slightly from the thought of Alberts & Hays

(2003) who state that the truly network centric organisation

will be self synchronising. By self synchronising one could

be led to believe that the hierarchical chain of command no

longer will be in effect. This is not the basic idea in NCW asthe Command Intent always is relayed through the chain of

command, but the execution decisions are made distributed.

We postulate that decision making strategy will be dynamic

and situation dependent whether or not a decision is made in

the hierarchy or by the network. For the organisation to be

agile it has to have the capability to make distributed

decisions but there has to be a hierarchical chain of

command to efficiently implement decision affecting

broader parts of the organisation.

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7.

Conclusion

We have showed that offshore operation planning today is

departmentalised and as a consequence of this task planning

is not synchronised with logistic support. This has

historically driven logistic support to perform under a

surplus strategy, providing more capacity then required in

order to accommodate fluctuation in demand and covering

for imperfections in plan integration. The problem is not that

the discipline plans are of low quality but they are not

coordinated with other activities and they are not translated

to the needs of logistics.

The way to achieve Integrated Planning is through the

establishment of a cyclic inter departmental planning

process where the Integrated Plan serves as a boundary

object for the operations.

We argue that an agile organisation can be achieved by

establishing an Operations Support Centre with the mandate

to support, prioritise and coordinate necessary activities

when deviation from plans occurs. The use of an OSC will

facilitate situational awareness and represents a focal point

for information collection/enhancement and decision

making. This is achieved trough a thoroughly designed

organisational development process changing a

departmentalised and hierarchical organisation towards a

networks oriented organisation. Changing a multi discipline

and knowledge intensive operation like offshore operations

is only possible through knowledge enhancements and

development of a learning organisation. Only through

increased knowledge about the complete operations and it

dependencies can one achieve the required situational

awareness necessary for the agility needed to handle plan

deviations more efficient.

8.

References

Alberts & Hays (2003) Power to the Edge Command

Control in the Information Age, CCRP Publications Series

Wheelock (1997), Review criteria for the Logistic Plan;

Joint Force Quarterly Spring 1997, pp128-133

E.A.Smith Jr. Network Centric Warfare: Wheres the beef? -

www.iwar.org.uk(RMA&C4I)

Asbjrnslett, Bjrn Egil (2005) BRO - Bedre, Raskere

Operasjoner Prosjektrapport for Statoil UPN DST & F&U,

Trondheim: MARINTEK

Perrow, Charles (1999) Normal accidents, New Jersey:

Princeton University Press

Suchman, Lucy (1997) Centers of Communication: A caseand some themes pp. 4162 in L.B. Resnick, R.Slj, C.

Pontecorvo and B. Burge (eds.):Discourse, Tools, and

Reasoning: Essays on Situated Cognition.Berlin: Springer-

Verlag,.

Rolland/Heps/Montairo (2006) Conceptualising Common

Information Spaces Across Heterogeneous Contexts:

Mutable Mobiles and Side-effects of Integration. CSCW 06

November 4-8, 2006, Banaff, Alberta, Canada

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