Managing the Tradeoffs: Similarities Between Managing New Product Development and Managing a Well Drilling/Completion Project

Abstract

To move and take action as quickly as possible, a development team must have a clear path and direction. It needs the best tools for the job and the ability to use them effectively. And it needs positive motivation to finish the work on schedule while achieving acceptable performance and quality goals. One of the potential "chokes" to the speedy delivery of both new products and new oil/gas wells is the decision-making process - the on-going debate between various interested and influential parties within the organization as to which aspects of the end product are most important. Multiple or conflicting priorities are often overlooked by planning teams when developing project schedules, budgets, performance objectives, and milestones. This frequently causes frustration, delays, and disappointments during and after the execution of the project. The authors draw on their own experience in new product development (downhole tools) and subsea well delivery. The roles and responsibilities of a cross-functional new product development team are similar to those of an operator's on-shore support and offshore operations teams. For both types of development project, risk mitigation and project execution are best achieved by utilizing the skills and experience of a highly competent multi-disciplinary team using a well-planned and documented decision-making process. These teams benefit by inclusion of key supplier technical experts as full- or part-time contributing members. The ability of the project execution team to consistently make value-added decisions rapidly, under pressure, is a key element of their success. Specific examples from a supplier's new product development process and from a recent major deepwater development project are used to illustrate the key concepts. Introduction As exemplified by Smith and Reinertsen in Developing Products in Half the Time1, "managing the tradeoffs" should be a primary consideration when planning and executing a development project. Managing the tradeoffs means being aware of four major project objectives inherent in all development projects, and actively managing the six potential interactions between these four objectives. This technique provides the project execution team with a set of tools that, when applied consistently, ensure optimised project/product delivery within a win-win atmosphere. This technique can work as well for a drilling/completion project as it does for new product development projects. Cross-Functional Teams The concept of establishing co-located cross-functional project execution teams for both new product development and for oil/gas field development is well established and generally accepted1,2,3. These teams are most effective when they are3,4,5,6:led by a competent and committed project manager with full management support;empowered to make value-added decisions on behalf of the project and the company;aligned with a common set of goals and rewards;allowed to define their own work processes and encouraged to build team spirit;held accountable to clear and realistic targets;provided with the best training, tools, and technical support available. For developments that rely on suppliers for delivery of critical equipment, services, and/or technology, an important element of success is to include a technical representative from each major supplier6,7,11,12. Additionally, a well-constructed development process, such as a stages-and-gates (or "toll-gate") process, helps the team break the work into manageable pieces and to focus on the deliverables that will lead to success at the next step of the project2,8,10. For the purpose of this paper, we focus on the project execution team as opposed to the project planning team. These two teams may, in fact, be comprised of many of the same staff. We assume that the execution team experiences open and effective communication with the planning team and "buys-in" to the goals and objectives established in the planning stage7,8,11,12.