For the past five years, Andeavor Logistics has applied an operational excellence management system (OEMS) to the execution of the company's strategy and operations, and has found the system to be extremely beneficial.
"It was designed to accomplish four things: exponential value creation, transformational business growth, service superiority and market supremacy, while doing the right thing in the right way, every time," said Grigor Bambekov, the company's director of performance and business excellence.
In a presentation titled "Enabling and Delivering Operational Excellence Through Operational Discipline" at the Operational Excellence in Energy, Chemicals and Resources Summit held recently in Houston, Bambekov explained that an OEMS is not theoretical.
"This is a real management system. It is the embodiment of the company vision, guiding principles and strategic priorities," he said.
Further, the company's decision to apply OEMS "did not happen by chance," Bambekov said. "There was something very thoughtful behind it. When we saw prices of crude declining to $40 per barrel -- when other people were selling -- we were buying. We were expanding. We went against all market expectations and did something that was quite significantly different."
A "customer-centric, dynamic and constantly evolving system," according to Bambekov, OEMS consists of 16 elements, 217 expectations, and more than 800 specific operating requirements for standards and work processes to achieve best-in-class safe, compliant, reliable and efficient operations.
In order to be most effective, OEMS has to be executed in sync with operational discipline.
"Operational discipline is not about punishing people," Bambekov said, adding Andeavor has adopted five "Pillars of Excellence" that guide the company's senior executives' application of operational discipline, maintaining sensitivity to operations yet simultaneously encouraging workers to serve with excellence. The pillars require adherence to process and procedures, encouragement of all personnel to ask questions, embracing accountability, the elevation of the team rather than just the individual, and speaking to learn and understand.
People first
The "core essence" of this management system "is people and relationships," Bambekov continued. "Many people want to say that a management system is about standards, policies, expectations, procedures and workflow processes. I do not disagree with this, but all of those things come second after we take care of the people."
According to Bambekov, when workers apply their "brains and skills and capabilities" to designing the best possible workflow processes, standards and procedures, the management system is at risk of becoming "a compilation of bureaucratic materials that rarely help an organization move forward."
"It looks good on paper, but it is unexecutable because nobody wants to follow it," Bambekov said. "Before we start talking about process, procedures, standards and expectations, we have to talk about people and relationships. They are in the very heart of the management system."
"It starts with management, leadership, commitment and accountability," he said. "Everything starts there. We can't underestimate the power of people and relationships.
If we do, we will never be able to capture the minds and hearts of our frontline employees."
"This management system is not specifically exclusive to the functions of the senior executives of the company," Bambekov observed. "They spearhead it, they provide resources for execution, but it is owned by frontline employees, operators and supervisors that do the job every single day. People make up the value of a company. And when they do it the right way, then from that perspective we can see safe, compliant, reliable and efficient impact on operations."
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