Scheduling Software Takes The Guesswork Out Of Optimizing Project Delivery

By Paul Wells

New Technology Magazine, March 2008 - According to Alberta Economic Development, the province is currently host to 53 different current or planned oilsands projects, with 27 of those players collectively proposing to invest over $100 billion within the next decade. Of the 53 projects, 13, valued at more than $25 billion, are currently underway. And that doesn't even include the plans of Suncor Energy Inc., which recently announced the approval of a 200,000-barrel-per-day, $20.6-billion expansion that will include construction of four additional stages of in-situ bitumen production and a third upgrader.

If this is the golden era of oilsands development, then it also comes with a price. Cost overruns, project delays and even cancellations are possible, if not likely, as companies struggle to cope with the new, over-heated reality surrounding their respective projects.

With escalating labour, material and other project costs mirroring the frenetic pace of oilsands development, the ability to optimize scheduling through advances in software solutions has became a necessity rather than a luxury.

And that upwards pressure affects not just oilsands, but conventional oil and gas operations as well.

Companies such as Actenum Corporation, which develops schedule optimization software solutions for the petroleum sector, and Clevor Technologies Inc., which has recently adapted its Clevor Schedule Optimizer to the oil and gas industry, are offering products designed to enable organizations to rapidly and reliably schedule important assets and activities for maximum productivity, as well as aiding in understanding the impact of planning and scheduling decisions on daily operations.

Maximizing productivity

Owen Plowman, vice-president of business development for Vancouver- based Actenum, notes it wasn't by happenstance that the company targeted scheduling in its efforts to secure clients in the petroleum sector.

"We looked for areas and functions in which our optimization technology would be most useful and saw that - particularly in the upstream sector - there's a bit of a gap, in terms of automated support, in the scheduling area," he explains.

"Scheduling is very important because it has substantial economic impact. If you do it properly, then you maximize asset uptime, maximize production output, and use your crews in a way that gives you maximum leverage in operations."

Conversely, Plowman says that if scheduling is a weak link in the process, then money can be wasted, and organizational targets can be missed. "We set out to help organizations to do a better and faster job of scheduling their important assets."

To date, the company has applied its technology to two areas in the petroleum sector. The Actenum Rig Activity Scheduler (RAS) harnesses optimization for scheduling of drilling, completion and workover rigs, as well as other assets.

"We've just released Version 2.0, and the product is moving towards the scheduling of the general well lifecycle activities in the upstream energy sector. RAS is a customizable product that can be tailored to meet an organization's specific needs," Plowman says.

For drilling, completion and workover rigs, the base product creates schedules that are aimed at minimizing rig costs, while maximizing rig uptime and, as a result, production output.

The second component of Actenum's energy industry offerings is its Maintenance and Production Scheduler (MPS), which provides collaborative scheduling of preventive maintenance and production output activities for energy companies.

"If you apply MPS to a portion of a production line, with all the equipment involved in the operational activities, it will create preventive maintenance schedules for that equipment and integrate those schedules with production operations," Plowman explains.

Like RAS, Plowman says MPS is a customizable product that allows scheduling and rescheduling to be performed easily, while "maximizing production output and minimizing operating risk."

In most organizations, the development of long-range plans and short-term operational schedules is a complex exercise, made more challenging because the approaches that are traditionally used are manual. In other words, the planning/scheduling process often relies entirely on a human expert.

"While that expert may sometimes use a software package that provides a sort of electronic whiteboard, he or she is really making all the decisions about how to assign assets to activities," Plowman says.

When it comes to the complexities of project scheduling, removing the human element - and vicariously the potential for human error - can pay off, he contends.

Plowman explains that in an operational environment where there is any degree of complexity (a large number of assets, or a lot of tasks, or many disruptions), a manual approach to scheduling is both time-consuming and errorprone. In addition, he says the decisions about how to actually allocate resources to activities are made "in the dark," because the human expert doesn't really know the value of the decision, or of the resulting schedule.

"There may be several ways to sequence the drilling of a set of wells, for example, but which one will yield the best profile in terms of maximum production output at minimum cost? What's the tradeoff between these two metrics? Determining this takes quite a bit of time," he notes.

"Our solutions address these challenges, and others, by providing very fast, automated and interactive scheduling, and by coupling schedules to the display of key performance metrics [such as cost and production output]. This makes the entire scheduling process much quicker, and also enables the user to assess the likely outcomes of decision alternatives and uncover better alternatives."

Among companies using the software is Saudi Arabian state oil giant Saudi Aramco, which uses Actenum RAS to schedule its rig fleet, which is currently in the neighbourhood of 135 rigs. In addition, Plowman says Actenum has enhanced its RAS system for Saudi Aramco's reservoir management division to assist in the development of the company's annual operating plans.

"That is, what wells to drill and when to achieve the desired production levels. That project has multiple phases and we're still in process with it."

Plowman says Actenum is also engaged in RAS deployments with several other producers, "but we're not able to name them at present," adding that Actenum MPS has also been used by a heavy oil producer to schedule maintenance on the primary production trains.

Schedule optimization

Saskatoon, Saskatchewan based Clevor Technologies Inc.'s Schedule Optimizer package is just beginning to make inroads in the oil and gas sector but has proven its worth since 2003 to clients ranging from mining to construction companies.

And based on the successful application of the product during the past five years, company president Ravi Maithel believes Clevor Schedule Optimizer represents a "true breakthrough" in improving project performance.

In essence, the software automatically builds a schedule that "optimizes" a given business objective. These software tools use a patent-pending intelligent systemsbased high performance optimization engine developed by Clevor.

According to Maithel, these solutions provide a compelling value for their users, both in terms of reducing costs and improving efficiency, which in turn can beget a quicker completion timeframe for a given project.

"It is well known in the management literature that to make a major improvement, one has to change the process itself. So, what processes can be changed that would have a major impact on project management? Scheduling is such a process because it is the only process that can impact both the cost, through right deployment and better utilization of the resources, and the project duration. More specifically, schedule optimization is how it is done," Maithel says.

"What we have been able to do is make such a change in the scheduling process. What optimization does is to make sure that the right numbers of resources are deployed and that they are used as well as possible. We have done several projects, mostly in Saskatchewan, which have produced excellent results - we are seeing 20% improvement in the use of resources. Imagine if everybody's productivity went up by 20%. It's very attractive."

Maithel says the Clevor software works with multiple project management platforms such as Microsoft Project, Primavera P3 and SureTrak. The schedule can be seen in all the forms available New Technology Magazine www.ntm.nickles.com March 2008 15 in the project management software being used, and an organization can use all team collaboration and reporting tools available in the project management platform they use.

Clevor claims its approach gives much better results than Critical Path Method alone, which for decades has been perhaps the most utilized form of project scheduling.

In 1957, DuPont and Remington Rand Corporation developed a project management method designed to address the challenge of shutting down chemical plants for maintenance and then restarting the plant once the maintenance had been completed.

They called it the Critical Path Method (CPM). It is based on the reality that in any project some tasks together control the duration of the whole project. Therefore, if any of these tasks are delayed, the whole project will be delayed. All other tasks have a float, which means that they can get delayed at least a little without affecting the duration of the whole project. It does not take into account that for the same project, one can build millions of different schedules with different costs and durations and each with its own Critical Path.

Maithel notes that Clevor's technology respects all constraints potentially involved in a project. He says the software can dramatically improve the effectiveness of the human scheduler.

"The program uses highly complex mathematics but it is a totally automatic system, so all you have to do is to put the data in and then you push a button that says optimize. Our solutions are being used by contractors, general contractors, owners, engineering firms and manufacturing firms, all with great success," Maithel says, adding that the company is close to finalizing its first deal with an oil service company.

"We think we will change the way projects in the oil and gas sector are managed. We do it by technology and we have enough results to have that confirmed - we have enough customers who have used it."

The schedule built by Clevor is "feasible," Maithel says. It takes into account all the engineering constraints, resource capacity constraints and calendar constraints. As well, the schedule can be updated regularly.

"It optimizes for a given business objective, such as minimization of total cost. The schedule provides global optimization over the whole planning horizon and all the resources involved. The total cost objective includes all costs," he says.

The schedule also takes into account alternative resources and available quantities and the optimizer can handle large schedules. "It is a full solution including software, training and implementation assistance. An audit trail is provided so that the users can assure themselves that the optimized schedule is correct," Maithel explains.

Ross Fraser, general manager of Saskatoon-based Supreme Steel Ltd., says his company has used the Clevor software with encouraging results. "The Clevor Schedule Optimizer enables us to provide detailed optimized schedules for all the contracts we undertake. This enables us to provide realistic completion dates to our customers while taking into account all the tasks from drafting to field installation," he says.

"With early schedule identification, we are able to very effectively supplement our capacity by sub-contracting portions of the work to other sub-contractors when our own capacity is in an area that creates a bottleneck."

CONTACTS FOR MORE INFORMATION
Owen Plowman, Actenum,
Tel: (604) 681-1262
E-mail: plowman@actenum.com

Ravi Maithel, Clevor
Tel: (306) 230-3688
E-mail: ravi.maithel@clevor.com

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