What oil & gas companies can learn from other sectors

Since January this year, the oil and gas sector has faced total uncertainty - declining oil price, rising capital and operational costs, reduction in exploration and job fears.

It is, however still one of Scotland’s most important economic sectors. In 2014 total UK expenditure in oil and gas reached £26.6 billion with capital expenditure reaching a record £14.8 billion.

In Scotland, the 2,000 oil and gas supply chain companies delivered a record £22.2 billion of sales in 2013 with international activity accounting for over half of total sales at 50.3 per cent.

But as the sector faces the impact of the declining oil price, it needs to look both inside and outside of the sector to ensure its long term sustainability.

Familiar pressures

The pressures facing the industry are all too familiar. Not so long ago the shipbuilding industry was facing similar challenges of a changing political landscape impacting on jobs in the sector.

We recognised that to remain globally competitive we needed to adapt to survive. However, with a workforce split between those in their 20’s and those over 50 this was one of our biggest challenges.

We had some of the most experienced ship builders in the business, but when faced with change they remember it being tried and failing 30 years ago. Similar, I imagine, to the oil and gas sector and a tough culture to break. But that’s what we did.

Developing new skills

In 2011 we introduced our Lean Learning Academy, a two week training course which brings together teams of individuals focussed on preserving value within the organisation but with less work.

After the training, graduates have continued to be supported as they developed improvement ideas using their new skills, ultimately presenting them back to the company. It’s a win win situation. We find new, better more efficient ways to run our business and our staff feel empowered and get the recognition for the important role they play in this process.

So far over 500 of our 4,000 workforce have been through the Academy and the changes they’ve made as a result have been instrumental in its success. The pipe shop, for example has seen radical improvements. Before the programme, people kept their heads down and just looked after their own task. Now you can see people passing pipes and drawings back and forth figuring out the most efficient way to get the job done well, together.

Other changes which have been introduced include a breakfast bar for teas and coffees through the day as well as the eradication of the shipyard 'horn' to keep time.

The system for targets has also been improved. The Pipe Shop team traditionally work a 37 hour week, however with the new working method if their targets are met ahead of time then the team can take the rest of the week off. The team have worked themselves a Friday off seven out of the last 10 weeks.

Change for success

This cultural change has been the driving force behind our success. It’s not until you take the time to look back at the journey we’ve been on that you remember what the culture used to be like.

Like us, the oil and gas sector will survive this downturn. It will come out leaner, more efficient and more effective by working more collaboratively and putting in place the strategies and changes required to make this happen.

Innovation and internationalisation will play a fundamental role in this, but so too will the need for continuous improvement in its day to day operations.

Oil and gas will provide most of our energy for decades to come and the industry will continue to offer a variety of exciting, rewarding and well paid jobs into the future right across Scotland.

How we're supporting Scotland's oil & gas supply chain companies