kevin duffy global vice president kepner tregoe inc sto conference june 14th

Kevin Duffy

Global Vice President

Kepner Tregoe Inc

STO Conference June 14th

Copyright © 2010 Kepner-Tregoe, Inc. All Rights Reserved. 2

Presentation Overview

• Share high level findings of the KT STO bench marking audit

• Focus on one area of the survey that is a consistent area of concern for organizations

• Review a current client case study as example of how they are addressing a highlighted process deficiency


Benchmarking Survey

• 75 Sites Participated North America

Europe

Southeast Asia

Australasia

Industries represented included mining, minerals ,industrial chemicals, power generation, oil and gas, steel manufacturing, building products manufacturing, paper manufacturing.


Benchmarking Survey

Self Assessment on unit performance

Likert Scale base

Questions and scoring in the context of the KT STO model framework


STO Excellence Process Flowchart


STO Process Weakness Concerns

• We do not a have a codified STO process

• Our business processes do not support the STO activities


A Second Perspective


InuBenchmarking Audit Feedback .

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%Definition

Planning

Implementation

Shut processes

Metrics/measuresDecommissioning

Restart

Communication & issue resolution

Safety

STO Survey: Feedback for Individual

All Responses Average

Individual Result


Regional Variations


STO Excellence Process Flowchart


• Procurement• Stock-keeping• Authorization• Shipping• Warehousing• Contractor Management• Training and Safety• Induction• Security • Reporting• Finance

STO PlanningKey STO Support Processes


STO Processes have one or more of the three types of deficiencies typically found

DesignExecutionManagement

STO PlanningSTO Process Review


Design

• Weak Connections

• Bottlenecks

• Complexity

• Automation (lack of)

• Control

STO Process Deficiencies


Execution• Lack of Resources• People Skills• Reward System

STO Process Deficiencies


The Three Dimensions of Process Maturity

1. Process Design1. Process Design• Customer-focused

• No non-value-added steps

• Free of redundancies

• No bottlenecks

• Steps in parallel wherever possible

• Smooth hand-offs between functions

Supplier(s)Supplier(s) Customer(s)Customer(s)

3. Process Management3. Process Management• End and upstream process metrics

• Process performance monitoring/reporting system

• Process ownership

• Process planning

• Process resource allocation

• Inter-process links

• Continuous improvement

2. Process Execution2. Process Execution• Clear roles

• Necessary skills

• Capable and user-friendly information systems

• Supportive culture


STO PlanningSTO Process Deficiencies

Management • Lack of ownership• Non-existent of ineffective

measurements• Not integrated into the STO

planning framework

Driving Zero Harm and Efficiency Improvements through improved Contractor Management

A Case Study


Background

Organization• Kennecott Utah Copper• 2000 permanent employees• 500 permanent contractors• Onboard an additional 1000-1800 contractors for major STO

events

Key Issues• Contractor Safety Performance• Inefficiencies• Cost management


Business Case/Project Objectives

• Improve the safe, effective, and efficient management of KUCC Contractors

• Design improvements to the tools and information used to plan, schedule, monitor, and manage contractor performance

• Improved the ability of those responsible for the daily management of contractors to detect and resolve problems:


Contractor managementCurrent State Phase

• Extensive Analysis completed over a 4 week period

• Twelve potential improvement projects identified and presented

• Four tactical projects and two sustainability projects recommended based on ability to provide an improvement in Contractor Management Processes

• Project team members selected for Future State development:• Superintendants

• Contract Administrators

• Project Engineers


Contractor ManagementCurrent State Phase - Findings

No standard processes for planning and monitoring contracted work; everyone has their own way of going about it.

Without defined processes, expectations and responsibilities are not always clear.

Lack of planning increases risks and often creates need for excessive firefighting.

KUC’s Contractor Management System recognized a “scope-of-work” underpins success of any contracted work. However, it did not define a process, clear expectations, nor provide for compiling a quality scope.

There were significant redundancies and confusion between the SHEA, Pre-job, & other safety planning tools. All reference the Scope of Work and were often not relevant to the work being performed.

It was not always clear to the contractors when to escalate issues, or even who to contact.

Copyright © 2011 Kepner Tregoe Inc. All Rights Reserved


Contractor ManagementFuture State Design Considerations

Tactical:

Design “small job” work scoping and planning process

Select One Best Way for Project Definition and Planning

Design Perfect Shift process for shift start-up/hand-off

Design Issue Escalation and Resolution process for work execution

Sustainability:

Determine Optimal Organization Structure and appropriate job profiles

Design Process Measurement and Management process



Cross Functional team designed the future state business process:

• Emphasis on quick implementation• Transferable SITE-WIDE while still

resolving the SMELTER’s most pressing issue(s)

Contractor ManagementFuture State Phase


Results Achieved

At the conclusion of the project Contractors rate of injury dropped significantly

and into line with full-time internal workers Continues to show benefits going forward

Amount of Contractor work being done has increased: number of resources required to plan have stayed

the same Contractor feedback is positive particularly around

issue resolution and communications


Kennecott Utah Copper* Smelter

All Injuries(LTI + Medical Treatment Cases)

MONTHLY NUMBER

12 MONTH ROLLING AVERAGE

*Employees and Contractors


Results Achieved through process Improvement

Improved cost performance At the conclusion of repair project, a contractor asked for additional fees. A

review of the Issue Escalation Tracking Form revealed no concerns, issues or problems that required additional work were raised at any time during the project.

Savings = $75,000

A contractor removed an agreed-upon volume of material from the east pond at KUC. This dredging project took more time than expected leading to a request for additional funds. A review of the Initial Scoping Worksheet revealed an agreement on volume – not time.

Savings = $75,000

A dispute arose regarding damages and delays associated with a slag bunker project. A review of the Issue Escalation Tracking Form provided factual details on weather and production delays, showing 50% fewer delays than claimed by the contractor.

Savings to = $30,000



Critical Success Factors

• Top management commitment:

• to improving business process

• of the resources required

• patience to do the job right (no magic bullet)

• to seeing this as a project and engaging a full-time Project Manager

• Willingness to have our warts exposed

• Credible (technical and organizationally respected) resources were critical in the design of the future state and implementation phases

• Integrating best practices into the KUC culture and environment

• Maintaining ownership of the solution while taking counsel from KT ensures sustainability

• Consistent and ongoing communication at all levels throughout the engagement



Thanks

Questions ?

kevin duffy global vice president kepner tregoe inc sto conference june 14th

Documents

sto processes

sto activitiescopyright

kt sto bench

sto planning frameworkdriving

products manufacturing

steel manufacturing

paper manufacturing

audit focus