1. Service Quality in the Petroleum Industry - Measuring Up
Josh Ritchie
Schlumberger
Service Quality Compliance Manager – Drilling & Measurements
Argentina, Bolivia, Chile

2. Agenda Measuring Up Quality Improvement in the Service Industry
Attention to Quality
Management System
Risk Analysis

3. 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)

4. 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.

5. 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 ( % efficient) versus 3.4 Sigma (99.36% efficient)

6. How can we improve? Defining and Measuring Quality
Focus on Quality – incorporating into the organization
Management Systems
Knowledge Management

7. 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."

8. 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

9. 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

10. 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?

11. Quality Management System

12. 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.

13. 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.

14. Organization and 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

15. 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

16. 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

17. HARC Work flow

18. HARC: Likelihood and Severity
Multi-Catastrophic
Catastrophic
Major
Serious
Light
Very Low
Low
Medium
High
Very High
Incidents not known to have occurred
Incidents occurring less than once per year
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

19. HARC: The Risk Matrix
Risk Matrix: A two-dimensional 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.

20. HARC
Mitigation and Prevention measures are put in place to reduce the likelihood and severity

21. 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 non-conformance lies: ongoing cycle of improvement.

22. Management System - Recap
Plan Do
Feedback
Check

23. 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