Computer-Aided Lean Management

by Roger Anderson, Albert Boulanger, John Johnson, and Arthur Kressner
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August 29th, 2010
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By Roger Anderson, Columbia University

Worst Blowout Ever? Coastal wetlands fouled? Seafood safe to eat? Miners killed? Survivors trapped for MONTHS? Drinking water polluted? Pipeline explosions? Refinery fires? Tanker spills?

The BP blowout in the Gulf of Mexico (GOM) has not quite faded from public view, but the ramifications of shaky safety practices will rattle throughout the worldwide energy industry for decades to come.  What’s going to fix our energy industry?

Let’s start with the obvious.  In our book, Computer-Aided Lean Management, we pointed to three exemplary manufacturing companies to guide the way to the transition to both cheaper and better systems engineering practices.  Since publication of the book, Toyota and Boeing have both fallen on hard times.  Only GE continues to excel. The lesson is that sustaining Lean Management processes requires constant vigilance to prevent sabotage of the very improvements and efficiencies that were so difficult to win in the first place.

After first getting it right, what Toyota and Boeing did wrong is a powerful lesson for BP and the Energy Industry worldwide.  Constant vigilance and challenges to business-as-usual will be required, once we get it right in the first place.  The energy industry will require double vigilance as we recover from our bad incentive programs: improper executive bonuses, ill conceived cost cutting, poor merger management, and faulty decision making.

My best answer to how we don’t fall off the Lean log, assuming we make it in the first place, is to watch the New York Times.  The “Grey Lady” is the “Newspaper of Record” for a reason.  Subscribe in the morning, then observe every evening how not only the cable TV news, but also mainstream channels repeat what you read that morning in the Times. The Times has not only an editorial culture of self-criticism, but also an independent “Public Editor” who they hire to work for their readers and not for them, to insure they publish “only the news fit to print” — see for example, the latest Public Editor’s  mission statement at http://www.nytimes.com/2010/08/29/opinion/29pubed.html?_r=1&ref=opinion .

The Energy Industry can only hope for that kind of self examination, AFTER we have gotten to Lean Management in the first place.  To get that far will require extraordinary leadership from the very tops of every major energy company in the world, including  government-owned, internationals, and independents. A tall task indeed.

Let’s start with Lean Manufacturing.  As you read in my last blog, we tried to convince BP that Lean Systems Integration was required for billion dollar, deep water oil and gas production in the 1990’s.  We even brought in Boeing to demonstrate that independent contractors, often welding on dirt manufacturing floors, could not see the big picture that life-of-system design and maintenance requires for superior performance.  That money spent upfront creates savings in the long run is a hard lesson to learn.

In the future and across the board, tragic mistakes must be prevented in the Energy Industry.  Such will not be avoided by hiring “image consultants” to cook up catchy news phrases or manage bad events after they have happened. Only difficult and expensive systems engineering up front  prevents disasters later on in the life of critical assets. Ask the aerospace industry.

The proof will be in the pudding.

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