Lean transformation in upstream: A success story in the Oil & Gas sector

Case Study

Lean transformation in upstream: A success story in the Oil & Gas sector

Goals: increase productivity and reduce costs through a structured and cross-functional Lean transformation

twitter
linkedin
facebook

Leading multinational in the Oil & Gas sector

This project was conducted at a leading multinational company in the Oil & Gas sector, with operations spread across onshore and offshore units. The organization is recognized for its strict safety, reliability, and efficiency standards, as well as its high level of complexity.

The company is deeply committed to operational excellence, consistently investing in building and strengthening a culture of continuous improvement across all its units. With multiple dispersed facilities and highly specialized teams, the company was under increasing pressure to boost productivity and reduce the associated costs.

Market pressure, unstable performance, and urgency for results

The project was launched during a particularly challenging context for the Oil & Gas sector. A sharp drop in oil barrel prices placed significant pressure on operational profitability, leading the company to reassess its plans and accelerate the achievement of tangible results.

In several operational units, production often fell short of expectations due to recurring operational problems and breakdowns that were not being addressed in a structured manner. Analyses highlighted the urgent need to stabilize operations, reduce costs, and enhance the safety and reliability of assets.

Given this context, it became clear that a deep, coordinated transformation was necessary, based on the principles of operational excellence and continuous improvement.

A three-pillar transformation framework

The transformation was implemented through a systematic, integrated approach built on three complementary pillars: Support Kaizen, Daily Kaizen, and Kaizen Projects. Each of these elements played a critical role in establishing a culture of continuous improvement.

Increase operational efficiency and reduce costs in the Oil & Gas sector

Support Kaizen – A transformation support structure

A robust support system was created to monitor the transformation. Through Mission Control Rooms, teams gained visibility and coordination, ensuring alignment with strategic goals. These visual management rooms featured continuous improvement journey displays, project progress tracking, and real-time monitoring of KPIs and achieved results.

A structured training program was developed to strengthen team knowledge and skills in continuous improvement, with content tailored to the organization’s specific context and challenges. The program included practical training, field application, and a certification process to recognize team progress and maturity.

In parallel, regular “Leaders Go See” sessions brought leadership closer to the Gemba, reinforcing their active role in monitoring execution, removing obstacles, and recognizing team contributions.

Daily Kaizen – Embedding a culture of improvement in daily operations

More than 90 onshore and offshore teams were trained to implement structured daily routines, fostering a culture of continuous improvement that is embedded in daily operations. These routines were organized on two levels:

  • Level 1: Implementation of visual management boards with daily planning, operational indicators, and improvement plans. Operations management meetings were standardized, with a focus on safety, quality, and productivity. During these meetings, teams analyzed deviations, validated work plans, and defined improvement actions as needed, becoming more proactive in identifying and solving problems.
  • Level 2: Organization of work areas using the 5S methodology, supported by visual management and standardization principles, ensuring workplace accessibility, safety, and efficiency.

These practices enabled the detection of real-time deviations, prompt response to root causes, and direct involvement of operational teams in process stabilization and improvement.

Kaizen Projects – High-impact interventions in key processes

Based on a diagnosis of the main value streams, a series of improvement workshops were launched to address problems and optimize processes. These projects engaged cross-functional teams working on-site and followed a systematic approach to analysis, root cause identification, solution design, and standardization.

Key workshops included:

  • Planned offshore maintenance intervention: Focused on reducing intervention duration and improving activity execution efficiency. Efforts focused on ensuring rigorous planning, eliminating wasted time, and ensuring the availability of materials at the right time.
  • Preventive maintenance plan optimization: Aimed at critically reviewing preventive maintenance activities to eliminate low-value tasks, adjust frequencies, transfer tasks to operations (autonomous maintenance), and increase overall maintenance team effectiveness.
  • Well Delivery Process (WDP): Focused on reducing lead time between well approval and execution phases by standardizing deliverables and tasks and eliminating unnecessary approvals.
  • Supply chain and logistics: Targeted improved efficiency in warehouse operations, on-time offshore deliveries, and elimination of redundant handling across the logistics chain.
  • Start-up of new assets: Centered on structured preparation for launching new production assets, including team coordination through SIMOPS (Simultaneous Operations) and implementation of standardized routines for data collection and analysis.

Each project was developed with strong field team involvement, aligning operational goals with business strategy and laying the groundwork for disciplined, results-driven execution.

Cultural transformation with operational gains far exceeding expectations

The structured implementation of the Kaizen approach led to substantial operational improvements, with a direct impact on performance indicators. The outcomes of individual projects highlight the transformation’s value:

  • Planned offshore maintenance intervention:
    • 27% reduction in intervention duration.
    • Significant financial savings through intervention optimization.
    • Additional 2-day reduction in turnaround time.
  • Preventive maintenance plan optimization:
    • Over 35% of preventive maintenance tasks transferred to the operations team.
    • Significant increase in production.
  • Well Delivery Process (WDP):
    • 50% reduction in new well delivery time.
  • Supply chain and logistics:
    • 40% reduction in logistics process lead time.
    • Significant financial gains from supply chain improvements.
  • Start-up of new assets:
    • Earlier production start-up.
    • Net gain of 23 additional production days.

The set of improvement initiatives implemented delivered financial benefits well above expectations, four times higher than the initial target.

This performance reflects not only the effectiveness of the technical solutions but also the high level of team engagement, focus on Gemba, and commitment to continuous improvement.

Illustrative images of the Kaizen workshops carried out

See more on Oil & Gas

Find out more about transformation in this sector

Get the latest news about Kaizen Institute