The Six Sigma Strategic Objectives Embracing the Six Sigma Strategic Objectives enables service providers to align themselves with their client’ s requirements resulting in improvements to the companies’ operational capabilities and financial standing.
The Six Sigma Strategic Objectives must be equally internalised and shared by all the people in the organisation, from top management to the grass root levels. This will assist in benchmarking the accuracy of mechanical inspection in construction.
Value Based Management( VBM) In the journey towards achieving its corporate vision of becoming‘ A Global Champion’, PETRONAS is fully committed to its ultimate business objective, namely maximising value creation and managing value for its stakeholders. VBM is a tool that will direct the entire organisation towards one ultimate goal, which is shareholder value creation.
Following VBM concepts, there will be a smooth handover from construction to commissioning and then on to the operational phase. Based on this concept, a mechanical completion system is essentially translating business objectives so that the Plant Start-Up can be earlier or as per schedule, thus generating income for the owner and its shareholders.
Balanced Scorecard( BSC)
Under the traditional accounting measures, typically there is a little correlation between shareholder value and return on assets. This may be because the basis for assessing shareholder value to the accounting net is different. While the share market is assessed based on future market opportunity, the accounting returns are based on what has happened. Thus the accounting report can be easily distorted as some of the items such as the intangible assets e. g. staff training, product innovations, etc are excluded from the calculations.
A Balanced Scorecard( BSC) is designed to overcome the limitations of traditional accounting measures. BSC is a complete set of management tools to help managers in managing the performance of the company. It also includes both financial and operational measures that give top management a comprehensive view of the business( e. g. CEO
Dashboard). By applying BSC concepts to a mechanical completion system, they can be crossreferenced into business results by BSC’ s four key perspectives, namely customer perspective, internal business perspective, innovation( learning) and growth perspective, and financial perspective. The mechanical completion system can be measured objectively through schedules, quality, cost, and safety. All these performance measurement aspects are typically balanced during the mechanical completion execution plan.
International Standards in the Oil & Gas Industry The International Association of Oil and Gas producers has collaborated with the International Standards Organisation( ISO) to develop a very wide selection of vital standards for the Oil and Gas Industry. The International Standards cover oil and gas materials, equipment and offshore structures as per the ISO and International Electrotechnical Commission( IEC) documents.
With the International Standards recognition, the benefits are: i. For the industry, it will reduce costs and delivery time and facilitate trade across national borders. and ii. For regulatory authorities, it offers support for goal-setting and functional regulations, while achieving higher levels of safety through better design.
A study conducted by oil and gas producers confirmed industry expectations of the financial benefits of implementing ISO standards. According to the study’ s findings, the oil and gas industry would save an equivalent of 1 % of its annual expenditure by implementing International Standards. This translates into savings of US $ 180 million and represents a return on investment of 25 to 1( ISO Bulletin, July 2001).
Examples of ISO committees in the oil and gas industry are as follows:- a) TC 67 – Materials, equipment and offshore structures for petroleum and natural gas industries. b) TC 28- Petroleum products and lubricants. c) TC 193 – Natural gas. d) TC 192- Gas turbines. e) TC 58- Gas cylinders. f) TC 197 – Analysis of gases. and g) TC 27- Solid mineral fuels.
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