Service Quality in the Petroleum Industry Measuring Up
Josh Ritchie
Schlumberger
Service Quality Compliance Manager – Drilling & Measurements
Argentina, Bolivia, Chile
Agenda
• Measuring Up
• Quality Improvement in the Service Industry
– Attention to Quality
– Management System
– Risk Analysis
Measuring Up – Tire Industry
• Well known tire manufacturer produced
6,000,000 tires, 2,000 which failed and caused
accidents.
• 4.9 Sigma (99.977% efficient) versus 3.4 Sigma
(99.36% efficient)
Measuring Up : Medical Industry
• 3.4 Sigma – 99.36% efficient
• 5,000 incorrect surgical procedures per week
in the U.S.
• 200,000 incorrect drug prescriptions annually
in the U.S.
Measuring Up : Airlines
• Heathrow Airport in London is the busiest
airport in the world: 468,000 flights per year
• Based on fatality rate from airline safety
records, 1 fatality incurs every 5 years
• 6.42 Sigma (99.99999997% efficient) versus
3.4 Sigma (99.36% efficient)
How can we improve?
• Defining and Measuring Quality
• Focus on Quality – incorporating into the
organization
• Management Systems
• Knowledge Management
What is Quality? Wikipedia:
• ISO 9000: "Degree to which a set of inherent
characteristic fulfills requirements."
• Six Sigma: "Number of defects per million
opportunities."
• Peter Drucker: "Quality in a product or service
is not what the supplier puts in. It is what the
customer gets out and is willing to pay for."
Measuring Quality
• Lost time / Operating time (efficiency)
• Failures per pumping hour or per meter drilled
(MTBF)
• Net Pay / Gross Interval drilled
• < 5 deg/100’ dogleg severity
Power of Focus
• Doubled in size since 2003
• Injury Rate held constant
(companywide focus on
Safety)
• Increase in Serious Quality
Incidents, directly
proportional to company
growth
Focus on Quality
• Raise importance of SQ to that of HSE
• Culture change in organization
– You would stop a job if Safety was compromised
– Would you stop it if Quality was compromised?
Quality Management System
Commitment, Leadership and
Accountability
• The foundation of the Quality Management System
(QHSEMS) is leadership, commitment and
accountability from top management and its
readiness to provide adequate resources for QHSE.
• Particular attention is drawn to the importance of
senior management providing a visible expression of
commitment.
• Failure to do so will undermine the credibility of
Quality policy and objectives.
Policies and Objectives
• Dictate limits and requirements.
• Define the restraints under which business is
conducted.
• Give the personnel clear and precise
communication about principle issues.
• Provide a certain level of control over
identified risk.
Organization and Resources
• Organization
• Resources:
– Information Management
– Personnel (Training and Competency)
– Standards
• Sets of rules for implementing policies that define the
requirements and minimum acceptable criteria
– Guidelines (companion documents to standards)
• Provide additional technical or procedural information to ensure
compliance with standards
Risk Management
• Hazard Analysis and Risk Control (HARC)
– New Activities and Services
– Existing Activities where the rate of occurrence of
undesired events is abnormally high
– Management of Change
– Existing Activities with new exposures
– Infrequent / irregular activities
HARC
A simple, one-page form that:
• Guides employees at any level through the
HARC
Process
• Classifies Quality Hazards
• Facilitates implementation of prevention
and mitigation measures to reduce risk
HARC Work flow
Identify all hazards
associated with planned
activities
Assess Likelihood of each
undesired event
Assess Potential Severity
of each undesired event
Place analysis on the Risk
Matrix. Is it acceptable?
No
Yes
Document in HARC form,
agree review cycle,
proceed
Risk reduction with
improved Prevention
Risk reduction with
improved Mitigation
HARC: Likelihood and Severity
• Likelihood
Very Low
Low
Incidents not
Incidents
known to have occurring less
occurred
than once per
year
• Severity
–
–
–
–
–
Multi-Catastrophic
Catastrophic
Major
Serious
Light
Medium
High
Very High
Incidents
occurring once
or more per
year
Incidents
occurring once
or more per
month
Incidents
occurring once
or more per
week
C
M
S
L
N
HARC: The Risk Matrix
• Risk Matrix: A twodimensional matrix used to
quantify Risk Level by
plotting Likelihood versus
Severity.
• Potential Risk: Risk Level
(as defined on the Risk
Matrix) before the
implementation of Risk
Control measures.
• Residual Risk: Risk Level
(as defined on the Risk
Matrix) after the
implementation of Risk
Control measures.
HARC
• Mitigation and
Prevention measures
are put in place to
reduce the likelihood
and severity
PREVENTION
LIKELIHOOD
LIKELIHOOD
MITIGATION
SEVERITY
SEVERITY
Audits and Reviews
• How well do you conform to your Standards?
• Performed annual by each location
• HQ Audit every 3 years
– Personnel from various locations
• Output are Remedial Work Plans put into
place to ensure changes are made where nonconformance lies: ongoing cycle of
improvement.
Management System - Recap
Plan
Do
Check
Feedbac
k
Conclusions
• The Petroleum Industry has much room for
improvement with respect to Quality – our current
performance would cause 13,565 deaths annually in
the airline business
• Define Quality with your Service Providers
• Power of Focus
• Management Systems
– Computer code – everyone working in the same fashion
• Risk Control for Quality