Diversity, innovation and cross-segment sales are giving UK Operations a bright future
“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.”
Charles Darwin, On the Origin of Species
Aberdeen, the Granite City. Built out of granite mined from local quarries during the 18th and 19th centuries, Aberdeen is a gray city. Often shrouded in clouds and rainy weather, Aberdeen’s gray granite blends with the sky and hides an otherwise vibrant city. When the sun does make an appearance after a rain, the mica deposits in the granite sparkle, and stone ripples with a light pink hue.
The city sits between two rivers, the Don to the north and the Dee to the south, and has been a hub of human activity for over 8,000 years. The area has held strategic importance to various warring factions, both Scottish and English. From its earliest royal charter in 1179 through the Wars of Scottish Independence in the late 13th and early 14th centuries, men like Robert the Bruce and William Wallace have fought over the rich farmland.
Traditionally a fishing and shipbuilding city, today Aberdeen is busy and commercially diverse. It was transformed in the 1970s into the Oil Capital of Europe after the discovery of oil in the North Sea. Today, nearly every major oil company in the world has offices in Aberdeen.
“Many people in the oil industry here in Aberdeen are from other parts of the country or around the world,” said John Scott, regional manager for UK/Ireland. “It is a very cosmopolitan city.”
The city is also the hub of M-I SWACO operations in the United Kingdom, primarily supporting operations in the North Sea but also providing lab support and training to the entire organization. It is the center of technical innovation and customer diversity. And despite the doom and gloom of the global economic downturn, M-I SWACO UK Operations, like the city itself, sees a bright future ahead. This bright rests on two strengths. The first is the technical innovation that is redirecting the market away from where the company’s competitors are heading.
And second, UK Operations is bridging the gaps between the four product segments —Drilling Solutions (DS), Environmental Solutions (ES), Wellbore Productivity (WP) and Production Technologies (PT)— creating a unique sales approach that combines the efforts of sales teams from each product segment to open doors for one another that might normally be closed. Through a cross-segment sales approach, UK Operations is countering the current economic downturn with a strategy designed to capitalize on the strengths of each individual product segment for the good of the entire organization. While keeping the four product segments within the company as separate entities, Scott has led the development of what he calls bridges at the upper levels of each product segment. In the latter part of 2008, Scott brought key representatives from each of the product segments together in one office at Pocra Quay. Up to this point, the product segments had been separated not only across product lines but geographically as well.
“The challenge was to run an integrated organization from various locations around the city,” Scott said. “We realized that to have that integrated organization, they must all be interacting and working together on a regular basis.”
UK Operations in Aberdeen are housed in five locations throughout the city: Altens, Bridge of Don, Holburn House, Pocra Quay and Westhill. Product segments were miles apart. Now, with the decision makers of each product segment housed at Pocra Quay, the other facilities can serve as support units, performing their individual roles from their facilities and reporting to Pocra Quay.
“In a business sense, they are all separate entities,” said Scott, “but now they are starting to think together as one.”
Scott recognized that there needed to be some kind of conduit through which the interaction between product segments could be coordinated. Scott called for a Continuous Improvement event in November 2007, and the new role of Central Sales Manager was created to be the conduit through which the four product segments could interact. George Stewart was tapped to fill this position.
Since taking on the role, Stewart has examined the sales strategies of each segment and found common connections among them, places where the needs and strategies overlap. He looked at each of the customers and how each of the segments was approaching that customer. By analyzing the sales processes, he saw several segments often had the same targets.
“We hadn’t at that point in time measured how or if we ever had pull-through of sales from one product segment to the other,” said Stewart.
But he also found that there was no common sales pipeline. There was no process that allowed Specialized Tools to benefit from the relationship that Drilling Solutions had with a client. If ST wanted to develop a relationship with that client, they were starting from scratch.
For example, one major customer had presented many roadblocks to the Specialized Tools group. Despite numerous attempts to penetrate the client, ST was unable to make much headway. Drilling Solutions, on the other hand, had developed business with the client. Through their relationship, they opened the door for ST to develop significant business with the client as well.
“Our diverse customer base in DS helps the rest of the organization,” said Alan MacKay, UK Drilling Solutions manager. “WP, ES, even PT can all come in and use the drilling solutions guy as a contact with that customer. Anything we pick up immediately gets passed on.”
Despite these successes, there have been a number of challenges in creating the cross-segment sales approach, not the least of which has been convincing each segment that it would benefit from the connection with the others.
“There was a tendency,” said Stewart, “for someone to say, ‘Our product line is okay,’ without thinking of M-I SWACO as a whole company.”
One way the individual product segments are realizing the benefits of working closely together is their new ability to see how their products and services fit into the bigger picture. As they are asked by their direct clients to bring in technology from outside their core competency, they automatically learn more about the other product lines.
“It allows us to be more product-aware across the product segments,” Stewart said. “Rather than diluting an individual’s knowledge of his own products, it strengthens it because he’s able to see how his products fit in with the rest of the business.”
But despite the challenges, Scott says it is the way to go in the UK because the region is a mature market. The players in the UK market know what technology and service offerings M-I SWACO brings to the table, and by bringing the various elements of the business closer together, the company can better serve its customers and become the industry leader across all product segments.
These customers also expect M-I SWACO to continually develop new technology to meet their specialized needs. The majors are prone to engage the technical departments within UK Operations to create specific tailored solutions to their problems. The smaller oil companies, working on tighter timeframes, tend to just ask, ‘What do you have for us?’ in terms of technology.
“We are committed to serving them all equally,” said Scott. “They are all majors to M-I SWACO; they just operate in different ways. It is our ability to align ourselves with all of our customers that gives M-I SWACO the edge on our competitors.”
New technology is also helping M-I SWACO move into new markets, areas where the company has not previously been, like quay-side boat cleaning. Even if there is a downturn in the drilling market, production platforms are still operating and require supplies like demulsifiers. Not only does this utilize the CLEANCUT* technology for shipping and storage of chemicals, but it requires that the tanks be cleaned before they are refilled. This was previously done by third-party contractors, but as M-I SWACO develops its Automatic Tank Cleaning* (ATC) system, it is able to help customers reduce costs by providing this as an add-on service.
“Wherever a customer has a problem with environmental issues or cost issues, we have to sit up and listen,” said Dave Walker, UK Environmental Solutions manager. “We have to ask, ‘How can we come up with a solution?’ That’s why R&D is so important. If we can get it right through R&D, we can leap- frog over the competition.”
Much of the research and development in the UK is performed at the Westhill office, just outside the city itself. Westhill is the hub for Specialized Tools. Originally the manufacturing point for SPS International, acquired by M-I SWACO in August 2006, it is now the main center for the design, development, testing and assembly of a wide range of tools. As such, it is the prime location for a development of technology for completion and downhole tools that continues to put M-I SWACO ahead of its competition and move the market into new directions.
“The North Sea has always been a flagship for new products and operational excellence,” said Ron Evett, operations manager for Tools and Filtration.
New tools are being developed in the debris recovery, drilling and wellbore clean-up product offerings. Most of the ideas for new tools come from the field and are collected each year by the WP Development team. The ST R&E group is currently developing nine new products at the Westhill facility.
“One of our new tools is totally different from anything on the market,” said Evett. “We’re taking the technology in a whole new direction.”
With the new system, Evett and the Westhill team are confident that they can redefine where the market for such tools is heading. By giving customers not only a new tool but an entirely new way of performing a task, the ST team at Westhill believes it can create a radical shift in customer perception.
“It can change the market,” said Graeme Laws, business development manager, New Technology for Specialized Tools. “It allows people to do things differently; it changes the market in as much as where our competitors are aiming. We’re trying to skew the market over here and they’re still aiming for the market over there. It’s about trying to get things done differently and M-I SWACO being the only company supplying the things that can do it differently.”
For the team at Westhill, it is about providing the customer with solutions. And while customers will sometimes choose the simpler and cheaper alternatives, especially in the current market where cost often overcomes value, Mark Temple, technical director for ST, believes that by giving the customer a solution rather than individual tools, they will continue to see M-I SWACO as a leader in the industry.
“The drive is to get viable products from concept to market quicker,” said Temple. “That is what will keep us ahead of the competition.”
One of the biggest innovations in the UK is not a new drilling fluid or even a piece of specialized equipment. It is a piece of software called KEM-TRAX*, a Net 2.0/SQL Server-based online software package designed to assist in the management of data acquisition, analysis and reporting in oil and gas operations. The software was developed by M-I SWACO in Norway but will revolutionize the Production Technologies business in the UK, and thus emphasizes the successful collaboration between M-I SWACO in the UK and Norway as partners in the North Sea region.
“This is quite a significant differentiator for our services,” said Brett Christie, UK Production Technologies manager. “It frees up other data support, from processing the data to interpreting it and being in front of the customer.”
The old process of gathering, analyzing and interpreting data was time-consuming and did not allow operators to catch potential problems, like product flow issues, in a timely manner. For example, a platform chemist takes samples from the production flow and analyzes them in onboard labs. The data is reported internally to their systems and reviewed by their offshore management. The report is then shipped to supplier companies, who collate the data according to their particular application, whether that of a drilling operator or a corrosion company. The next step is the production chemicals company, which does their own analysis. By the time the complete data set is finally sent back to the operator, a month has passed.
With KEM-TRAX, the offshore chemist can enter data directly into the system via any computer on the rig by using the online portal. The data is then automatically available to anyone who has the access privileges to go in and see the information, presented in near real time.
“It condenses down the processing and interpretation of data to something that’s automatic and relatively instantaneous,” Christie said. “We’re going from reactive management to proactive management.”
The direct benefit to UK Operations is the ability to work smarter and more efficiently than the competition, once again moving the target away from where other services companies are aiming.
“I think what it will do is greatly enhance how we are perceived in the marketplace in terms of managing the chemicals contracts,” said Christie. “It comes back to the value-added argument: we can focus on solving the challenges in the oilfield as opposed to all the backup and office processing requirements. Plus it comes back to this near real-time benefit. It depends on information coming in, but you can analyze it instantaneously so it reduces all that reactivity down to where you can start to get more focused on the day-to-day operations. That’s the big benefit for us.”
Likewise, the training center located at the Bridge of Don in the northern part of Aberdeen is a differentiator for M-I SWACO over the competition. One of four M-I SWACO training centers located around the world, the Bridge of Don facility serves not only UK Operations but the entire M-I SWACO organization.
“We’re basically a global function,” said Tony Wilkinson, training manager. “Even though we’re located in Aberdeen and work closely with John Scott’s team, we regularly receive trainees from the rest of the world. My trainers are also regularly traveling to deliver remote classes in far-flung places like Brazil, USA, Thailand, Egypt and UAE.”
The facility trains about 1,000 people annually, but simply providing training is not the goal of the group.
“We don’t just look at training,” Wilkinson said. “We also consider competency. Competency is defined as having the knowledge, skills and experience to complete a specific task such as operating a centrifuge. During training, we deliver the knowledge and develop the skills necessary to complete set tasks, but experience is typically gained by repeating these tasks in the field under supervised conditions.”
They are able to minimize the time taken to gain experience by offering a real-world experience at the training centre. Utilizing shakers, centrifuges, the CLEANCUT* system, vacuum, CRI, filtration and wellbore cleanup tools and systems, the facility gives trainees the chance to see equipment working as it does on the rig, so when they arrive on the rig, they know what to expect. And because of the availability of the equipment at the training center and the lower trainee-to-trainer ratio, every trainee has the opportunity to run through every task on an individual basis rather than just watching while one person demonstrates what to do.
“We try to make the whole training experience as real as possible. For instance, trainees can operate ES with simulated drilling fluid and cuttings,” said Wilkinson. “It’s as close as you can get to actual rig conditions.”
Wilkinson’s group is continually adding and updating classes to meet the needs of the company. A new high-pressure pump course was rolled out in late 2008, using a new high-pressure pump that, like all the other equipment at the training centre, runs just as it would on-site. And the trainers themselves are always learning as well, so they can continue to offer the best training available to meet the needs of trainees as the industry grows and new technology is added. A technical expert is currently training one of the trainers so that he can take over the class and pass along the experts’ knowledge to new trainees.
“We’re not experts on everything. We rely on the experts and knowledge sources from tech services and feedback from field personnel to keep us up-to-date,” Wilkinson said.
In addition to providing more specialized training than any competitor, the facility also provides the capital sales group the opportunity to demonstrate products. With events normally organized through capital sales, as many as 200 visitors come through the doors at Bridge of Don each year to see the equipment offered by M-I SWACO in near real-world conditions.
“It’s not just a resource for us; it’s a resource for our sales staff to get out there and promote what we do and show clients that our people are being invested in and are better than our competition,” Wilkinson said. “I like to think that this extends to sales of equipment because rig operators see people trained on our equipment and therefore want our equipment. The sales staff seems to say that as they come through, the training center provides an indirect benefit; that good training leads to equipment sales.”
It is this coordination between groups—to use a training facility to make sales, to use customer connections from one product segment to open doors for another product segment, to find new and innovative technologies that not only give M-I SWACO a new product to sell but redefine the mark—that is bringing new light to UK Operations and the company as a whole. Despite the clouds that seem to hang over the entire economy, bringing with them the potential for difficult times ahead, UK Operations has a plan, several in fact, to weather any storm and help bring M-I SWACO through to better times in the future.
