Like most global energy players today, Chevron is seeking ways to get capital projects off the drawing board and into production quickly, while ensuring the integrity and safety of the end result. "Yet projects keep getting larger, while supply chains continue to grow more complex," said James Maze, Chevron global category analyst, in a Wednesday presentation to the Emerson Global Users Exchange in Orlando, Fla.
Maze, together with Lori Abernathy, program manager with Emerson’s Fisher valves business, reported on a joint effort between the two companies to wring costs, complexity and delivery time out of the control valve procurement process. Chevron invests some $38 billion annually in capital projects, and a fair chunk of that investment goes to Emerson’s valves business, Chevron’s strategic preferred supplier of control valves. "Because both companies are global, they have projects, manufacturing capabilities and suppliers all over the world," said Abernathy. "The price we all pay for this complexity is more than just cold hard cash. Long lead times can frustrate customers, suppliers and EPC [engineering/procurement/construction] contractors."
To reduce complexity and boost delivery performance, Chevron sponsored a Six Sigma project across the two organizations. Team members from Chevron included several managers and a control valve engineer, while those from Fisher included individuals from sales and account and project management. Subject matter experts (SMEs) from both companies included people in quality assurance, welding, materials, packaging, IT and more.
"Both companies began by laying their cards on the table, so to speak, and asking each other direct, honest questions," continued Maze. Out of this endeavor came the Chevron/Fisher Control Valve Procurement Procedures (CVPP), which standardizes requirements between the major capital projects teams and gives them a line-by-line way to proceed."
The initial CVPP was 41 pages long and had 45 separate reference attachments, according to Maze. "Before, a Chevron engineer could search for 'control valves’ in our standards and practices library, and end up with hundred of results." So the team worked with the SMEs to develop predefined control valve specifications for 32 pre-approved manufacturing procedures such as for welding, testing and painting. It also created a predefined list of Chevron specifications to be submitted with every quote and purchase order. "This, along with creating predefined quality assurance needs and a pre-defined quality control inspection and test plan, was intended to help Emerson meet Chevron’s requirements without getting bogged down."
Once the CVVP reached a certain level of maturity, the team showed it to stakeholders in both companies and got their thumbs up, said Maze.
"Implementing this approach is expected to provide both Chevron and Emerson benefits that will cut costs associated with over-specifying technical and quality requirements, as well as slash the EPC resources needed to approve procedures and drawings," Maze said. "It will also reduce the costs incurred by fabricators to deal with incomplete packages, which must be completed on-site, as well as cut costs from expediting shipments." All told, the new processes are expected to trim months from control valve delivery time.
The CVPP is currently being piloted on several major capital projects, and Chevron plans on moving forward with the approach in the future. The same key issues around control valves exist in other technology areas, so the approach could work in them as well.