PIDX Supplier KPI Project Update
May 28th 2014
Michael Washington, Conocophillips
Daryl Fullerton, Actian / PIDX
© PIDX, Inc. 2012
Supplier KPI Project Overview
Overview
The PIDX Supplier KPI Projects main focus is to develop a Supplier KPI
Dictionary (Phase 1) ending in Q4 2014 followed by the development
and automation of Supplier KPI data transfer between Suppliers and
Oil & Gas Operators (Phase 2) beginning in 2015.
Phase 1 project objectives are to compile an Industry Data Dictionary for
Standardization of KPI terminology and definitions, e.g. NPT, TRIR etc
Focus: Upstream / Downstream
Contact: Daryl Fullerton
Mike Washington
Commenced: 2011 Participants : c80
dfullerton@pidx.org
michael.washington@conocophillips.com
Key Drivers – Why we Need
Wins when Implemented
• Industry Wide KPI Definition Chaos
between different Operator KPI Definitions
and the Supply Chain Supplier Base
• Scorecard Overload
• Cost Savings Time = Money
• Better Data Accuracy
• Improved Data QA/QC
• Scorecard impact on working conditions.
• Standardization on KPI Terminology
• Industry Recognized and endorsed
Supplier KPI Data Dictionary.
• Significantly better QPR’s
• Cost savings for Service Companies
• More Accurate Data for Operators
•Standard for Supplier KPI Data Transfer
© PIDX, Inc. 2012
Industry – Current State of SPM
• Many Operators have SPM Initiatives in operation or
underway.
• Often Contract Awards for a new Supplier based on WOM or
past performance but KPI Terminology / Definitions may
differ. – Big Problem Area
• Many KPI initiatives are Regionally Focused or Category
Line Focused with no Global Company Wide KPI role up.
• Very few provide Visibility on KPIs on Real Time to Suppliers
• Often no way of telling whether A team or B team until things
go wrong – Likeness to Political Campaigns / Elections
• No way of facilitating regional Specific KPIs that Matter.
• Huge Drive to Standardise KPI terminology. Apples with
Apples and Like with Like.
• Automated of KPI data gathering extremely low.
Confidential © 2012 Actian Corporation
3
Supplier KPI Data Dictionary Update
(May 2014)
Accomplishments to Date
1.
2.
3.
4.
5.
Template for Data Collection Agreed.
5 Performance Areas Defined and Agreed.
Over 450 KPI’s recieved and in progress of
being added to Master Data Dictionary
KPI’s Submitted by 15 Companies
Planning for Conversion of KPI Dictionary
Spreadsheet to from Excel to Data Base
underway.
© PIDX, Inc. 2011
Performance Areas (Level 1)
Framework Agreed –Sept 14th 2012
SUPPLIER
Level 1
•5
•14/03/2016
•
Classification: Internal
•
HSE
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QUALITY
•
DELIVERY
•
COST
•
BEHAVIOUR
Work Group Meeting Outcomes Houson May 14th
ConocoPhillips , Houston Texas
5 Hour Meeting
30 Attendees / Participants
Outcomes
1. Review Progress
2. 65 Similar KPIs
3. Operator Challenges on Standardization
4. Supplier Challenges on Standardization
5. Business Case for Operators
6. Business Case for Suppliers
7. Proposed KPI Standardization Sheet (Version 2)
© PIDX, Inc. 2011
Takeaway Template Discussed
Challenges for Operators and Suppliers
Outcomes Workgroup Meeting working secession May 14, 2014
Operators Challenges
Supplier Challenges
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• Different Operators use different Naming
Conventions
• Operator places burdon on Suppliers to
complete scorecards.
• Not all Operators providing visibility on data
gathered.
• Many Operators don’t do 360 Degree KPIs and
Surveys
• Data Duplication – Data already exists in
Operator Systems – HSE Systems , Well View ,
Open Wells
• Suppliers Not always engaged at start of
Operators SPM program.
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Internally many different definitions for Same KPI
Time Taken to Approve and Validate Data.
Lack of System Integration lacking
Executive sponsorship –Busines Case Needed
Internal agreement within our BU’s and globally on
KPI Naming Conventions.
Internal alignment between supply chain and
operation groups
Compelling business case to drive KPI
standardization
Supplier engagement - How do we get our suppliers
on board?
KPI data capture - How do we easily capture this
data?
I may not be the right person to drive this globally
within my organization
Effort involved in Managing suppliers Performance
and Validating the data
Legal impacts of Supplier KPI Standardization
Work Group Meeting Outcomes London May 27th
GE , Houston Texas
5 Hour Meeting
30 Attendees / Participants
Outcomes
1. Review Progress
2. Operator Challenges on Standardization
3. Supplier Challenges on Standardization
4. Business Case for Operators
5. Business Case for Suppliers
6. Identified 19 Global Common KPIs
7. Proposed KPI Standardization Sheet (Version 2)
© PIDX, Inc. 2011
KPIs to Standardize
KPI Name
KPI Definition
Total Recordable Incident Rate
(TRIR)
OSHA Severity Rate
OSHA SR = (Lost Workdays + Restricted Workdays) * 200,000 / Hours Worked
Lost Workday Case Incidence Rate
LWIR = Lost Workday Cases * 200,000 / Hours Worked
OSHA Incidence Rate
(OSHA IR) = (Lost Workday Cases + Restricted Workday Cases) * 200,000 / Hours Worked
Actual Costs Vs Planned Cost Days
(Actual Cost of Services/Actual Operating Time (days))/(Planned Cost of Services/Planned
Operating Time (days) )
NPC % OF ACTUAL COST
(Total non productive Cost NPC/Actual Cost of Services)*100.0
Days per 10k
(Total number of drilling days / Total feet drilled)*10,000
NPT in % of operating time
(Product Line Related Total Non-Productive Time NPT (days)/Actual Operating Time
(days))*100.0
Operating Efficiency %
Operating Efficiency = (Operating Time-Agreed NPT)/Operating Time x 100
Days Away from Work Injury Freq.
(Days Away From Work Injuries/Total Manhours)*200000.0
Stop Cards Issue Rate
Number of Stop Cards recorded for the supplier per 200,000 man hours
Recordable Injuries and Illnesses Frequency
(No. of Recordable Injury and Illnesses*200000.0)/No.of Man-hours worked
% Objectives Met
(number of objectives met / number of objectives defined) * 100
On Time Delivery Rate
On Time Delivery in Full to Specification / Total Deliveries Received
Right First Time Invoicing Rate
Invoices received Right First Time / Total Invoices Received *100
Days Sales Outstanding Ratio
DSO ratio = accounts receivable / (annual sales / 365 days)
Days Payment Outstanding Ratio
DPO ratio = accounts payable / (annual sales / 365 days)
= Recordable Cases * 200,000 / Hours Worked
Common Global KPIs - Ver 1 (May 27th)
Next Meetings / Key Dates
Houston 10th Sept - Baker Hughes
Calgary – September 24th 2014
Paris – October 2014
October 2014 – Standardized KPIs
Standardized KPIs – November / December 2014
Why Become Involved?
1.
2.
3.
4.
5.
6.
KPI Dictionary Access – Exposure to More
KPIs
Your KPI’s are Part of a Standardized
Industry wide Accepted KPI Portfolio
Access to Quarterly Release of Supplier KPI
Dictionary
Network with Industry Peers on best practices
and Lessons Learned on SRM
Get Guidance on Establishing Supplier KPI’s
Operator / Supplier Presentations
© PIDX, Inc. 2011
Q&A
Contact:
dfullerton@pidx.org
michael.washington@conocophillips.com
www.pidx.org
Linkedin Group:
Supplier Performance Relationship
Management Group (Oil & Gas)
© PIDX, Inc. 2011