Nothing ever goes according to plan … disruption management in scheduling

In the late 1800s Prussian Field Marshall Helmuth von Moltke made a statement about military operations that we now know as “No plan survives contact with the enemy”. In today’s industrial operations environment, this statement could be rewritten to read “No plan survives contact with the operational world”. This is because as soon as any plan for the execution of a set of operations is put into practice, disruptions will inevitably occur and recovery of some sort will be necessary. The weather doesn’t cooperate. Somebody is injured. A critical piece of equipment breaks down. Market conditions change. The key challenge that must be addressed very rapidly, and also reliably, is how to get things back on track to meet business goals. Here is where disruption management techniques can help. Coupled with sophisticated decision support software and analytic methods, they enable organizations to easily and smoothly cope with the impact of disruptions on plans and schedules.

In this post:

• What is a disruption?
• What is “disruption management”?
• What capabilities are needed for managing disruptions?
• Slow loop vs fast loop
• What happens when fast loop (operations) is decoupled from slow loop (planning)
• The need for sophisticated Decision Support Software like Actenum DSO

What is a disruption?

What exactly is a  “disruption”?  According to a scholarly article on disruption management, “Disruption management – operations research between planning and execution” by Jens Clausen, Jesper Larsen, Allan Larsen, and Jesper Hansen, a disruption is a situation during operational execution in which the deviation from the plan is sufficiently large that the plan has to be changed substantially. The authors note what often happens when disruption occurs. The process used to manage disruption is usually manual because (a) the timeframe to take action and recover from the disruption is short and (b) the tools used to generate the original plan or schedule are labor-intensive and cannot be used effectively in an ad hoc, interactive decision-making environment where an appropriate way of moving forward must be created very rapidly.

What is “disruption management”?

Disruption management deals with how to dynamically recover a predetermined operational plan when various disruptions prevent that original plan from being executed smoothly. The discipline of disruption management was pioneered in the airline industry and is used extensively in today’s flight operations by airlines large and small. The complexity of the operating environment is high, bringing together weather, airports, airliners, crew, and passengers, and it’s also prone to continual changes. At the same time, operations must be kept running as efficiently as possible.

A disruption management system will help decision-makers respond to disruptive events in real-time, so that the additional costs resulting from the disruption, and recovering from it, are reduced to a minimum. The good news is that the impact of such systems is significant: for example, every year disruption management systems used by US airlines save many millions of dollars. As well, many disruption management concepts are extremely relevant to the energy sector, where complex operations, and keeping them running efficiently and effectively, is key to success. 

What capabilities are needed for managing disruptions?

Suppose that you are in charge of a schedule for drilling and completion operations, and there is a disruption at a well site, caused by stuck pipe. It’ll take 4 -5 days to resolve. And then a rig hand is injured at another well, and operations there have to halt for half a day. There will be a ripple effect (sometimes known as “knock-on impact”) as these delays require redeployment of resources like frac spreads. What would help you address these disruptions and get operations back on track? 

1. An effective way of modeling the actual disruptions in the schedule;
2. A rapid way of determining their impact on resource deployments, and Key Performance Indicators (KPIs), such as costs and production forecast;
3. A scenario creation and evaluation capability that will enable you to work out an appropriate way of resolving the disruptions and their knock-on impact;
4. The ability to focus on the parts of the schedule that are affected by the disruption, avoiding unnecessary rework that’s outside the disruption scope;
5. Visibility into how effective your resolution approach will be, in terms of minimizing further disruptions (the ripple effect), and improving your KPIs;
6. A reliable way of communicating the schedule changes required to the entire team, so that everybody knows how operations will be affected and what they need to do as a result.

Without these capabilities, you’re going to make “on the fly” decisions, to “just get going again.” And the 1990s software tools used by many operators today either do not incorporate these capabilities, or require a large amount of effort on the part of the user to work out the most appropriate course of action because they don’t provide much automation or intelligence. For example, there is no way of showing a production forecast change in an application such as Primavera or MS-Project: those tools don’t know anything about wells, so ancillary spreadsheets or other applications are going to be needed. The burden is on the user to do all of the work.

We’ve built all of these capabilities into DSO/Upstream, which is our sophisticated scheduling and decision-support application in use by many oil and gas companies around the world. The software enables modeling of any situation found in the operational world and links each schedule to user-defined Key Performance Indicators which are immediately updated as the schedule changes. Additionally, we’ve incorporated an AI-powered optimization engine into the software, and this enables very rapid focusing and resolution of disruptions without rebuilding the entire schedule. Scenario creation and evaluation capability are built-in, and a companion application, DSO/CX, provides schedule information to all authorized users via the web. Together, both applications provide a highly responsive and high-value disruption management solution.

Slow loop vs. fast loop

In the upstream sector, there are two control and feedback loops running that are relevant to this issue. 

The first loop to consider is often referred to as the “slow loop”: it’s the planning process that runs over extended time periods, and that establishes the overall context for operations within those time periods. In the upstream world, the slow loop is the field development planning process that runs periodically, perhaps once a year, where a specific budget value is used to determine the set of wells to be delivered during an operator’s fiscal year, together with network and facility upgrades. The loop is “slow” because adjustments to the plan will be made over an extended time.

The “fast loop” is found in the execution of the plan, where resources are brought together and the actual activities that are focused on delivering wells happen. In the fast loop, speed of operations, and their efficiency, are key. The process of drilling, completing, and placing a well on production may take place within a few months, and all the time the activity schedule is being adjusted to keep up with operational changes and disruptions.

Both loops need to be coupled to achieve maximum efficiency. That means results of the actual execution of operations (in the fast loop) must be fed back to the planning organization (the slow loop) to drive changes to the plan and adjustments to cost and production forecasts. And this needs to be done in a timely manner; in particular, feedback on disruptions and their resolution must be communicated rapidly so that plans may be updated to reflect the expected outcome.

What happens when fast loop (operations) is decoupled from slow loop (planning)?

Manual methods of linking the two loops are often used as a stop-gap. A manual approach, though, even if supported with some of the commonly-used 1990s  scheduling tools in use today, cannot really contend with high degrees of complexity. As a result, the slow loop/fast loop linkage and feedback process are sub-optimal, with negative, cascading impact.

In this situation, the operating plan will quickly become decoupled from the medium and longer-term plans of the organization (e.g., in the upstream oil and gas industry, drilling operations execution planning becomes decoupled from reservoir management, field development, production, and capital expenditure plans). This decoupling of the “fast loop” (operations) from the “slow loop” (planning) can result in significant misalignment of results from expectations within a very short period of time. When there is a lot of disruption, the problem becomes more acute.

The need for decision support software like Actenum DSO/Upstream

Actenum DSO/Upstream provides much tighter coupling between the fast loop and the slow loop, since outcomes of operational decisions are known within seconds, and are reliable. Appropriate and accurate data may be fed into the slow loop planning cycle at any time, so all parts of the organization are up to date on projected results with no surprises.

In a world where it is getting increasingly difficult and expensive to obtain oil, the need to respond to disruption is important if we are to rely on the effective planning and execution of exploration and production operations. Sophisticated decision support applications are available today that can make a significant difference in our ability to recover from inevitable disruption, through decreased response times and measurably increased decision quality.

If you’re interested in seeing how Actenum DSO/Upstream can help you with decision support, contact us for a live demonstration at info@actenum.com .

 

Owen Plowman
Vice President Business Development