Opportunities of

Improvement
pertaining to Lean
Project Management
relating to Cost
Reduction
Submitted By:
Aritra Sengupta
SAP Id: 500065810
Enrollment No.: R020218013
MBA Oil & Gas Management

Under Guidance of
Dr. Rajesh Gupta
School of Business
  The application of Lean Management principles in project management

Introduction practice contributes to Lean Project Management.

 The origin of Lean Project Management can be traced back to post

Second World War when Japan was faced with a crucial challenge to
thrive in the dire economic environment

 Many scholars attribute Toyota engineer Taiichi Ohno as the father of

TPS and Lean.

 Key principles that can be used to apply the lean concept to project
management:
▪ Specify value
▪ Map the value stream
▪ Make value flow by eliminating waste
▪ Make value flow at the pull of the customer
▪ Embrace continuous improvement in pursuit of perfection
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 Paper Title Citation Findings

Ballard, G., & Howell, G. A. (2010).

 Lean project management differs from traditional project management not only in
Lean project management.
the goals it pursues, but also in the structure of its phases, the relationship
Building Research & Information
between phases and the participants in each phase.
Lean project management (2003) 31(2), 119–133,
 Product and process are designed together
3218(2003).
Literature Review https://doi.org/10.1080/096132103
01997


All product life cycle stages are considered in design
Systematic efforts are made to reduce supply-chain lead times
Project definition process of
Glenn Ballard and Todd Zabelle.  Clarify the problem.
Lean Project Delivery (2000). Lean project delivery  Search externally (users, experts, benchmarking, etc.)
System system. White Paper #9 Lean  Search internally
Construction Institute, 1–10.  Explore systematically
 Reflect on the solutions and the process.
Ballard, G. (2014). The Lean In the Lean Project Delivery System, project definition starts with business planning,
The Lean Project Delivery Project Delivery System : An proceeds to business plan validation if the initial plan appears to be feasible, and ends
System: An Update Update. Lean Construction Journal with a decision by the client to fund or not fund a project.
2008, (May). Allowable Cost ≥ Expected Cost ≥ Target Cost
Buell, R. S., & Turnipseed, S. P.
Application of Lean Application of Lean Project Management and Six Sigma provides a disciplined structure
(2004). Application of Lean Six
Sigma in Oil Field of gaining knowledge delivering safer faster and better results with lower cost rather than
Sigma in Oilfield Operations,
Operations the perceived notion of special shortcut to yield financial benefits.
(November), 5–8.
Lean Principles Implemented by the Area Energy LLC :
 Moving of large batches of wells to single-piece flow.
 Just in time execution of planning and implementing activities.
 Relentless focus on continuous Improvement through Mapping of work process.
 Eliminating Identified waste
Cha, S. R., & Gold, K. (2012).
Implementing Lean  Custom designing of Oil field Equipment for the job at hand.
Implementing Lean Manufacturing
Manufacturing Principles  Creation of transparent system of visual tools to monitor key indicators
Principles in New Well
in New Well Construction  
Construction.
Outcome
 High release rate o wells despite oil price volatility.
 Improved Safety Performance by factor of 10
Drilling and completion cost remained flat contrary to industry standard doubling
during same period.
 Organizations prefer Lean Management methods because its concept is flexible
enough to be customized into specific project requirements.
Itua, O. J., Shamuganathan, G., &  Lean applications to petroleum front end projects are limited owing to non-
Lean Method Application
Campus, S. (2015). Lean Methods standardized project activities.
to Frontend Petroleum
Application to Frontend Petroleum  Though lean methodology was developed for the manufacturing industry but can
Engineer Project
Engineering Project, (2008). be applied onto various project management scenarios with customization.
 In oil and petroleum Industry the application of lean project management well
documented related to safety and production which is reported by Imperial Oil.
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  Research problem
Objective & Delays in project can lead to cost overrun. Improper scheduling and poor
Business Problem waste management can be attributed to cause of delay. The lean
methodology was developed for the manufacturing industry but can be
applied onto various project management scenarios with customization to
contain cost overrun
 Objective
Identify scenarios in the Oil & Gas Industry where Project faced Cost
overrun and explore the opportunity to implement Lean Management which
could lead to cost reduction.

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  Research Methodology:
Research The proposed research is both qualitative and quantitative research. The
Methodology proposed research work would be realized in 3 phases.
▪ Identify projects and industry situations through primary research with
help of questionnaire where difficulty in project execution was
experienced.
▪ Suggestion of appropriate Lean Management Tools identified from
secondary research obtained through research papers and case studies
▪ Design a suggestive action pertaining the problem where cost reduction
is maximum.

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Schedule

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