W8.1_ASY_Workflow for Productivity Improvement

Problem Statement

Here in Indonesia, beside in new field there are many oil and gas companies are operatingin a mature field, problems raised when the company faced to manage how to achieve high recovery rates, how to use personnel effectively, how improve production and create an efficient cost structure. That would mean improving business processes, formalizing its corporate knowledge and supporting integrated long-term asset planning and short-term operational planning. As revision from my W8 blog discuss here I want to talk about how could the company introduce workflow improve productivity as well as reduce maintenance cost to increase reliability at minimum cost as part of business improvement.

Development The Feasible Alternatives

As previously mentioned in my blog W7, the approach from management to improve business process can also adapted from management view of improving maintenance performance that is:

  1. Business and Management : Skills used to translate an organization’s business goals into appropriate maintenance and reliability goals that support and contribute to the organization’s business results
  2. Manufacturing Process Reliability : Maintenance and reliability activities to the manufacturing process of the organization to ensure that maintenance and reliability activities improve the manufacturing process.
  3. Equipment Reliability : Two kinds of activities that apply to the equipment and processes for which the maintenance and reliability professional is accountable. First are those activities used to assess the current capabilities of the equipment and processes interms of their reliability, availability, maintainability, and criticality. Second are the activities used to select and apply the most appropriate maintenance practices, so that the equipment and processes continue to deliver their intended capabilities in the safest and most cost-effective manner.
  4. Organization & Leadership : Processes for assuring that the maintenance and reliability staff is the most qualified and best assigned to achieve the maintenance and reliability organization goals
  5. Work Management : Skills used to get the maintenance and reliability work done. It includes planning and scheduling activities, quality assurance of maintenance activities, stores and inventory management.

And the cost component of operation and maintenance can be classified into 6 categories as follows:

  1. Operations and administration
  2. Site maintenance
  3. Equipment and supplies
  4. Labor
  5. Parts
  6. Consumables

To reduce cost in operation and maintenance at least there are 5 alternatives / options:

  • Assign Tasks to Outside Services: Outsorcing contract outside service organizations to provide some or all of the O&M services
  • Condition Monitoring: to minimize reactive work
  • Aftermarket Components: reduce cost of inventory
  • Addressing to new technology: increase productivity
  • Good recordkeeping: management of change, lesson learned

Development Outcomes of Alternative

Now I want to determine what is action plan to be prioritzed when company want to focus reliability aspect instructed by board of management.

Below is data from last year activity at Company ABC Oil listed, the data has been factorized to make sure confidentiality from original source is secured :


then categorized all the component cost to criteria for management discussion resulting cost distribution as follow:


Selection of the alternative

The selection shall be based which alternative has the maximum total score, for selected option

Analysis/ Comparison of the Alternatives

Using Multi attribute technique, the cost component for activity is converted into dimensionless as tabulated below:


According company database cost categorization, the most effective approach (highest score) to increase reliability are presented in table below:



Preferred Alternative Compared against the Criteria

The result of what is alternatives prioritization is based on the highest score given from the calculations, means the lowest cost can be taken to give reliability raised up at certain level can be achieved.

And according the calculation, the prioritize level is shown below:


The result shows that condition & monitoring is as the highest priority level should be taken

Performance Monitoring and Post Evaluation of Result/ Follow up Assessment

The improvement process for reducing cost above is an interaction process. All parameters usually dependent to another process as a part of integrated system. The important factor should be considered is how to determine what kind of action plan at certain level of hierarchial part of the company to ensure the most economic alternative. And the relative ranking for every company might different from one to another because of each unique characteristic.


  1. Sullivan, William G., Wick, Elin M., Koelling, C. Patric. (2012), Engineering Economy. Chapter 14 Pp. 551 – 573, Fifteenth edition,Prentice hall.
  2. Brassard, Michael., Ritter, Diane. (2010), The Memory Jogger 2nd Edition (pp.112-117). New Hampshire, United States: GOAL/QPC.
  3. Kumar, U. and Ellingsen, H. P. (2000). Development and implementation of maintenance performance indicators for the Norwegian oil and gas industry.Proceedings of the 14th International Maintenance Congress (Euro maintenance,2000), 7-10 March, Gothenburg, Sweden, pp. 221-228.
  4. Society for Maintenance & Reliability Professionals (2012). Body of Knowledge. [ONLINE] Available at: http://www.smrp.org/i4a/pages/index.cfm?pageid=3323. [Last Accessed 9 October 2013].

1 Comment

Filed under Asyhad, Week 08

One response to “W8.1_ASY_Workflow for Productivity Improvement

  1. Much better, this time around, Pak Asyhad!!!

    Don’t forget that you are entitled to claim one of your two questions from Chapter 14 with this blog posting…….

    Dr. PDG, back home in Jakarta

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