2.1.3.1Operational Excellence Function

Management Approach

The scope of the Company’s Operational Excellence Function is to continually oversee core business activities across their lifecycle (from ’Win’ to ’Execute’ to ’Operate’) and drive the Company towards high performance, not only from an economic perspective (covered in section 2.1.5) but also through effective risk management, quality/compliance assurance and continuous improvement.

Among the various aspects of Operational Excellence within SBM Offshore, are the following main themes :

  • Leadership and Culture: with the ambition to ’Target Excellence’, the complementary Life365 and Right365 programs frame the development of the Company’s leadership and culture, focusing on the combined objectives of ’No Harm, No Defects, No Leaks’
  • Operational governance: as described in section 3.8
  • Process Safety Management and Risk Management : described in sections 2.1.2 and 3.6.1 respectively
  • Management Review: building on International Standards such as ISO 9001, SBM Offshore has established a set of internal processes ensuring a regular, structured review of its management and control framework against its latest strategy and actual performance
  • Knowledge Management and Continuous Improvement: ensuring that lessons are effectively learned, also building on internal knowledge and experience as well as industry best practices
  • New ways of working under Fast4Ward® and Digitalization – explained in sections Fast4Ward® and 2.1.7
  • Quality and Regulatory Management described below

Quality & Regulatory Management

SBM Offshore is committed to performing its business in full compliance with all applicable laws and regulations and to delivering products and services meeting all related regulatory requirements, as well as any applicable specifications and requirements imposed by relevant stakeholders.

As part of the Operational Excellence organization, the combined Quality & Regulatory Management function is dedicated to ensuring that such objectives are consistently met in the Company’s core business, notably through :

  • Promoting a quality and compliance culture
  • Maintaining SBM Offshore’s certification to the ISO 9001:2015 Standard
  • Providing systematic identification of applicable regulatory requirements and ensuring their implementation
  • Ensuring that conformity, compliance and acceptance of the Company’s products and services are effectively achieved and maintained
  • Supporting continuous improvement of business processes and ways of working

Regarding Operational Excellence & Quality overall, the Company is focused on reducing and mitigating risks to its business activities, notably :

  • Material risks related to project execution, process safety, human capital and changes in laws and regulations − as mentioned in section 1.4.
  • Other operational risks such as loss of integrity of aging assets, loss of certificate of class and disruption to the supply chain.

2020 performance

The Company is proud to note the following key achievements :

  • Active promotion of ’Target Excellence’ principles through diverse communication campaigns
  • Renewal of SBM Offshore’s ISO 9001:2015 certification, including scope extension to the Shanghai and Bangalore offices
  • Further development of an integrated Product and Regulatory Assurance approach, building notably on SBM Offshore’s Quality Rules and a ’Cost of Non-Quality’ management approach
  • Strengthening of the Right365 program under the banner of ’Target Excellence’, with a specific focus on ’Doing the Right Thing, Right First Time’ as witnessed during SBM Offshore’s first Right365 Day in November 2020
  • Upgrade of GEMS, including the optimization of contents and a new user interface
  • Furthering of the Fast4Ward® program for standardization and flawless execution during EPCI projects and subsequent Operations
  • Lessons Learned Initiatives performed to improve our projects and operations
  • Effective use of independent third parties for inspection, verification and assurance services related to Execute and Operate activities

Importantly, all Company offshore facilities were duly accepted by all relevant authorities and regulators, with all related permits, licenses, authorizations, notifications and certificates duly granted and kept valid. Offshore facilities have also remained in class at all times as required from both statutory and insurance perspectives. One significant operational fine – amounting to approximately US$950k − was paid by an affiliated company related to technical non-conformities. These were identified during an audit in 2018 performed by the Angolan Ministry of Mineral Resources and Petroleum on the N’Goma FPSO in 2018. 50% of that amount is attributable to SBM Offshore. The findings have since been addressed.

FUTURE

For 2021, SBM Offshore will be focusing on the following subjects :

  • Process Safety Management objectives as described in section 2.1.2
  • Development of a Knowledge Management framework to grow in-house expertise and support continuous improvement
  • Alignment of GEMS business processes with the upgraded Enterprise Resource Planning project (’Integra’)
  • Development and deployment of digital solutions supporting Operational Excellence
  • Reduction of Cost-of-Non-Quality through systematic tracking, investigations and pilot initiatives to both prevent and mitigate future occurrences
  • Maintenance of an effective regulatory watch and interface with regulators

As a permanent, overarching objective, all Company projects, facilities and sites are to be performed, delivered and maintained in full compliance with all applicable laws, regulations and requirements from relevant stakeholders.