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Supplier KPI Project Meeting Houston PIDX Fall Conference - Sept 14 th 2012 Chair Daryl Fullerton Vice Chair: Mike Washington © PIDX, Inc. 2012.

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Presentation on theme: "Supplier KPI Project Meeting Houston PIDX Fall Conference - Sept 14 th 2012 Chair Daryl Fullerton Vice Chair: Mike Washington © PIDX, Inc. 2012."— Presentation transcript:

1 Supplier KPI Project Meeting Houston PIDX Fall Conference - Sept 14 th 2012 Chair Daryl Fullerton Vice Chair: Mike Washington © PIDX, Inc. 2012

2 Agenda Sept 14 th Meeting © PIDX, Inc Project status –Objectives –Status project plan –Roadmap – Short / Long term 2.KPI portfolio –KPI Data Dictionary Template –KPI Supplier performance areas/categories –Discussions 3.Statoil Overview –Performance Areas 4.Performance area - Group work –Performance Areas Agreement 5.Participant overview – role, competance and commitments – discussions 6.Onwards London - Next meeting –Actions bullets – Individual To do’s –Deadlines –Rough- cut agenda discussions for London workshop

3 © PIDX, Inc Supplier KPI Project Overview Overview The PIDX Supplier KPI Project focus is to develop a Supplier KPI Data Dictionary (Phase 1) followed by Automation of Supplier KPI data transfer between Suppliers and Oil & Gas Operators (Phase 2) 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 Commenced: 2011 Participants : c70 Contact: Daryl Fullerton Mike Washington Wins when Implemented Standardization on KPI Terminology Industry Recognized KPI Data Dictionary Standard for Supplier KPI Data Transfer Significantly better QPR’s Cost savings for Service Companies More Accurate Data for Operators Key Drivers – Why we Need Industry Wide KPI Definition Chaos Scorecard Overload Cost Savings Time = Money Better Data Accuracy Improved Data QA/QC Scorecard impact on working conditions.

4 © PIDX, Inc Goals and Objectives Educate / Recruit Continue to meet, educate and recruit additional interested parties to Supplier KPI Workgroup. Develop Define KPI DD Template Define 5 Performance Areas Nominate Performance Area Team Leads Mapping KPI’s To Performance Areas Appoint European Vice Chair Draft Version 1 of Supplier KPI Draft Version 2 of Supplier KPI Quarterly Release of Data Dictionary Meetings 1 x London (Oct 2012) Outputs: Mapped Indicators to Performance Areas Draft Version 2 of Supplier KPI Build Develop Grow Grow Participant Numbers Performance Area Team Meetings. Develop Version 1 of Supplier KPI Data Dictionary to be circulated to Participating Members. Add KPI’s to Data Dictionary. Meetings Regular Performance Area Team Meetings via Telecall. 4 Quarterly Meetings Per Year (F2F) Outputs: Release of Latest Version of KPI Data Dictionary after each Quarterly Meeting Publish Supplier KPI Data Dictionary for Industry Review and Feedback. Engage / Survey with IT Vendors on current data transmission formats for Supplier KPI Data. Gauge Interest for Pilot 2014 Develop Excel Version of Supplier KPI Template for XML similar to RP76 HSE Plan for Data Collection Pilot between 2 Operators and 3 Suppliers (2015) Outputs: Agreement of Supplier KPI Data Dictionary Definitions by Operators and Suppliers. Pilot Take-up & Usage of Data Dictionary Short Term Goals (2012 Q3, Q4)Medium Term Goals (2013 )Long Term Goals ( )

5 © PIDX, Inc Workgroup Meeting Participation / Expressions of Interest BP Cairn Energy* Chevron ConocoPhillips EL Paso Green Energy Murphy Oil * Noble Energy Nexen Origin Energy * Petroleum Development Oman Penn West Exploration * RWE Shell Statoil Tullow Oil * Wintershall (*) Expressions of Interest to become involved. Aker Solutions Amec Baker Hughes Cameron GE Oil & Gas Halliburton KCI bv * NCH Corporation Quality Distribution Systems Schlumberger Siemens Weatherford Cortex Business Solutions 8over8 Pervasive Software FPAL / Achililes PICS Software AG StoneBond ThruBit Logging Solutions Total Participants / Interested Parties = c70 Last Updated Date: Sept 2012 OperatorsSuppliersSoftware / Consultancy

6 Why Become Involved? © PIDX, Inc Data Dictionary Access – Exposure to More KPIs 2.Your KPI’s are Part of a Standardized Industry wide Accepted KPI Portfolio 3.Access to Quarterly Release of Supplier KPI Data Dictionary 4.Network with Industry Peers on best practices and Lessons Learned on SRM 5.Get Guidance on Establishing Supplier KPI’s

7 7 SUPPLIER HSE QUALITY DELIVERY COST BEHAVIOUR Performance Areas Performance Areas Framework 12/04/2015 Classification: Internal

8 Budget Risks Performance Areas Framework (Detailed) 812/04/2015 Classification: Internal SUPPLIER HSE TRIF SIF Environmental Incidents Risk Management DELIVERY Material delivery Time Quantity Flexibility Service deliverySee OTIF materials QUALITY Quality deviation COST Total cost Compliance with compensation format Cost reduction Market benchmarking BEHAVIOUR To be developed Performance Area Sub performance area L1 Sub performance area L2 The common performance area and are divided into sub groups. The same performance areas are valid for all categories. General performance indicators Category specific performance indicators Contract specific performance indicators Performance indicators applicable for most contracts and categories. Example: HSE is relevant within most categories Owner: HSE Procurement Performance indicators which may vary according to the needs of the categories. Example: Rig availability is relevant within Drilling & Well. Owner: Category manager Performance indicators which may vary according to the needs of the contracts. Example: Characteristics related to a specific product Owner: Contract responsible/Comp any representative Performance indicators Within each Performance Area there are numerous performance areas within three different sub groups:

9 912/04/2015 Classification: Internal HSE Total recordable injuries frequency (TRIF) Lost time incidents (LTI) Restricted work cases (RWC) Medical treatment cases (MTC) First Aid cases (FAC) Work related sickness Serious incidents frequency (SIF) Dropped objects (actually) Near Miss (Nr) No. Near miss / Actual incidents No. Authority Notification Security incidents Environmental Incidents No. Serious spills No Spills Risk Management HSE program Activity list Average day action over due Risk Assessment Sub supplier monitoring

10 Delivery 1012/04/2015 Classification: Internal DELIVERY Material delivery Time Flexibility Quantity Service delivery See OTIF materials

11 Quality 1112/04/2015 Classification: Internal QUALITY Quality of Material Procedure violation Breach of contract System failure Technical deviations Insufficient documentation Labelling and packaging deviation Quality of Service Drilling performance – m/day Rig capacity (rig time available) Manpower capacity (organisational development compared to plan) Procedure violation Breach of contract System failure Technical deviations Insufficient documentation Labelling and packaging deviation Examples of performance indicators:

12 1212/04/2015 Classification: Internal Cost COST Total cost Invoiced value*, Ordered value, Delivered value, Spend framework agreements, Production cost, Unforeseen costs, Costs related to claims, Maintenance estimate, Lifecycle costs, Variaton/change orders, Value/Cost, Cost of poor quality Compliance with compensation format Number of invoices with errors, Number of non-compliant cases registered Cost reduction Bonus, Stretch targets, Increase of efficiency Market benchmarking Rate level, Price trend, Benchmark price Examples of performance indicators:

13 Behaviour 1312/04/2015 Classification: Internal Behaviour Corporate social responsibility (CSR) and ethics Compliance with Supplier Declaration Follow-up of sub-suppliers’ compliance with Supplier Declaration ISO Social responsibility (human rights, working conditions, environment, trustworthy conduct, local community contribution) Compliance with ethics standards Completed ethics and anticorruption compliance e-learning programme Assessment made by IDD-unit prior to contract signing (passed audits, risk areas, rating of the supplier and follow-up actions) Environmental impact assessment Code of conduct compliance (Online portals with self assessment questionnaire compiled into a report for each company. Example: Sedex, BSCI, Factlines) Collaboration Supplier meetings (Y/N, #meetings) Prioritisation of Statoil Compliance & Leadership training completed Responsiveness and availability Service orientation, attitude and proactivity Innovation New ideas leading to improvements (internally or in Statoil), delivery, quality, cost reduction, standardisation, business process Number of patents

14 © PIDX, Inc Project Contacts Project Chair: Daryl Fullerton Daryl has been working within the Oil & Gas Industry for the last 12 years. His area of specialism is Supply Chain & Procurement Management Solutions including Supplier Performance Management Systems, Supplier Risk Management, HSE Performance Management, Drilling Performance Management, P2P, B2B integration, and eInvoicing. Clients he has worked for include BP, BG-Group, ConocoPhillips, Chevron, Noble Energy, Origin Energy, Oxy, Respol, Shell and TNK-BP. Daryl now works with Pervasive Software as Oil & Gas Industry Principal. Daryl is Chair of the PIDX Supplier KPI Standard Workgroup and is actively working with Operators and Service Companies to better define Supplier KPI Terminology and to automate this data gathering process. He is also a Member of the Aberdeen Group Global Supply Chain Research Council. Daryl studied Accountancy at University College Galway and went on to complete a MA in Advanced Accounting and MSc in Computing and Information Systems, Daryl is a member of SPE, IADC, ISM and a frequent speaker at Oil & Gas Supply Chain Conferences. Project ViceChair : Michael Washington Michael, has been working within the Oil & Gas Industry for the last 8 years and is currently in the role of Integrated Performance Lead at Conoco Phillips. His area of specialism is Global Supplier Performance Management, KPI development and Quality Performance reviews, Software Implementation, Performance Management tools, Metrics, Economic modeling & analysis, Supplier Risk Management, Business Planning, Production scheduling, Procurement, Supply Chain, Material Planning, HSE Performance Management, Drilling & Completions Performance Management, Strategic Sourcing, and Process and Quality Management Michael is Vice Chair of the PIDX Supplier KPI Standard Workgroup and is actively working with Operators and Service Companies to better define Supplier KPI Terminology and to automate this data gathering process and has participated in several Oil & Gas Supply Chain Conferences He acquired his BBA at Sam Houston State University, Michael is a member of ISM, SPE, APICS, and has a Six Sigma Green belt Certification, and APICS certification courses


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