Industrial engineering success stories
A series of blogs presented by IISE President Michael Foss
ATTN: Business and company leaders who aspire to excel
Meet Charlotte Deom, procurement supervisor, Southern Region Supply Chain, Halliburton
B.S., industrial engineering, Texas Tech University
Halliburton Supply Chain Success Formula: Centralization, standard works, best practices
“In July 2015, the oil market was experiencing one of its deepest challenges in decades. With oil prices sinking, operators were reducing capital spending, canceling or delaying large projects, and reducing rig counts. I became a procurement supervisor for Halliburton’s Southern Region Supply Chain organization in the midst of the crisis.
The Southern Region occupies roughly the eastern half of North America, including three distinct areas: the Northeast, the Southeast and the Permian Basin — some of the continent’s most profitable and active areas. With market conditions significantly constrained, the Southern Region management challenged the supply chain to increase efficiencies, standardize processes and cut costs wherever possible.
My specific challenge was to create a centralized procurement team that would standardize processes across the region and to develop metrics to drive performance.
My initial focus was on centralizing and standardizing the processing of financial invoices for field camps in the region. Processing financial invoices — supplier invoices for services or materials purchased — is highly tactical and time-consuming. Additionally, each area procurement team had its own process and strategy for financial invoices. This created confusion and frustration among suppliers, who needed a clear system for obtaining payment status updates, and caused uncertainty for internal stakeholders looking for efficiency. I was charged with centralizing the process so that local procurement personnel could focus more on value-added projects. I had to complete this transition by December 2015.
As I prepared to assemble my team, it was crucial for me to understand the FI processing output for the region and for each area and to evaluate the region’s existing organizational structure. I met with all area supervisors within the region, individually and as a group, to determine a scope of responsibility that would enable my team to add value to their business. Once I had completed these evaluations, I created a timeline for centralizing all financial invoice processing for the four local procurement teams in six months.
I began this project with three strong employees, later adding two more. Their backgrounds and work experiences were diverse, but they shared one common denominator: They had little to no experience in processing invoices. To bridge this knowledge gap and transform them into subject matter experts, I enlisted two of Halliburton’s senior processing professionals as tutors. Working with those key individuals, my team members learned the process used in each area and began to define best practices. They became the subject matter experts and standard bearers for efficient invoice processing.
Now I needed to standardize the team’s roles and responsibilities to allow me to measure performance, make improvements where needed and report effectively on our progress. My approach to standardization focused on employing best practices, creating standard works and outlining processes for suppliers and stakeholders. We held weekly meetings with the four local procurement teams to discover the region’s best practices. Next, we held a kaizen event to discuss current invoice processes and to determine what changes would be required to implement best practices. The weekly local meetings also enabled me to develop standard works for my employees and establish daily, weekly and monthly performance expectations.
With best practices and standard works established, I created a letter for field employees, product service line managers and suppliers, explaining how invoices would now be processed. The standardized process was also shared with the rest of North America.
After standardizing processes and implementing best practices, it was important to drive my team’s performance toward achieving the region’s goals and expectations. To do this, I developed a Measuring Daily Improvement Board, or MDI Board, to highlight the region’s expectations for monthly performance and its progress in safety, quality, delivery and cost. The MDI Board is the focal point for daily meetings and stimulates discussion of individual highlights, lesson learns, corrective actions and issues that must be addressed to achieve daily performance targets.
Since July 2015, industry conditions have continued to deteriorate, with a prolonged slump in oil prices, historically low rig counts and operator spending, and industrywide reductions in personnel numbers. Centralization efforts and activities have remained a priority for Halliburton. By December 2015, the centralized invoice processing team was responsible for processing financial invoices for all but one of the region’s local procurement groups.
Removing tactical invoice processing from the field has allowed these teams to focus on more strategic, value-added projects, resulting in significant cost savings. One area took on a sourcing initiative that will save $400,000 in 2016. The centralization effort continues to yield significant gains in efficiency and cost savings, giving product service lines better visibility into their spend and helping management forecast profit margins more accurately.”
Industrial and system engineers provide incredible value to any organization in any industry, and I am really excited to share these stories and inspire you and your company to hire ISEs.
Blessings to you all!
President, Institute of Industrial and Systems Engineers