In upstream oil & gas, sometimes the best ideas may come from outside the industry—way outside

Big companies like to take ideas that work in one place and seed them into their other businesses to see if they work there as well. Technology transfer takes a similar approach when managements in different industries look to spread the use of innovative solutions as far afield as possible.

Published Nov 5, 2008

Big companies like to take ideas that work in one place and seed them into their other businesses to see if they work there as well. Technology transfer takes a similar approach when managements in different industries look to spread the use of innovative solutions as far afield as possible.

Randy Darcy is executive vice president of worldwide operations at General Mills, the global cereals brand. At a recent Aberdeen Group Executive Summit Darcy spoke about his efforts to put to good use in the production environment best practices he found in some unusual places.

There’s no reason his technique, and some of the things General Mills has learned as a result, couldn’t be applicable equally to the upstream oil & gas industry.
These include:
• Finding tips on how to do production line changeovers by meeting with NASCAR pit crews;
• Understanding sky surfing as a cultural phenomenon in order to do better new product introductions;
• Checking out whether how movie producers choose leading actors can be applied to identifying managers able to withstand the pressures of novel situations; and
• Examining how China organized its Olympic project so as to better understand working with diverse global cultures.

General Mills today faces global economic challenges that include the need to enter new markets, changing consumer demand, and rising materials and energy costs. Yet in a period of increasing supply chain complexity, the company has been able to lower those costs by double-digit percentages the last five years.

To stay competitive, the company has focused on four key initiatives, says Darcy, including the following:
• Use of technology as a means to innovation;
• Flawless execution based on sound management;
• Integration across a broad range of functional areas (Darcy says this is the hardest to achieve.); and
• Application of best practices

“To identify best practices,” said Darcy, “We looked at organizations outside manufacturing—NASCAR for changeovers, NASA for recruitment, and others.”
Given “product proliferation,” i.e., the tendency for companies to introduce more and more niche products, the number of production line changeovers some General Mills’ plants had to do “accelerated to several times every week, or even every day,” said Darcyl, “and each changeover took several hours.”

It was a problem that drove plant efficiencies down and even threatened the continued operations of some. One such plant “had made progress in reducing changeover times, but it wasn’t enough,” said Darcy. “We told them they needed to reduce the time to 15 minutes, although frankly we didn’t know if that was possible.”

That led to a conversation about how NASCAR pit crews do changeovers. Darcy sent a team to observe one such crew for a week. “And they learned many things,” he said, “including motivation. When they came back they began videotaping all their changeovers, and then brainstormed on that basis, looking at things like tool availability and movement analysis. They found 100 small and big ideas for changeovers. By the end they’d driven changeover times down to 12 minutes and 32 seconds. Eventually the same ideas were applied to new product introductions and other processes.”

His quest for innovative best practices has put Darcy in some unusual situations. For example, he decided to look at how sky surfing went from a niche recreation to a competitive sport with its own world championship in only a few years. The next thing he knew he was jumping out of an airplane himself because it was insisted that was the only way he could really understand the phenomenon.

By the end, though, Darcy said, he did learn something of how creative ideas are best applied. “When it comes to innovation there are creators and there are adopters. Every company needs both types of people: to find the ideas and then to make them work.”