Engineering Innovations - Case Study Example

Running Head: ENGINEERING INOVATIONS Engineering Innovations Name Institution Outline 1. Abstract. 2. Introduction. 3. Recent innovative achievements of the company-Baker Hughes Inc. 4. The major innovative process adopted and implemented by the company. 5. Diffusion and enterprise associated with the process in 4 above. 6. Cross-cultural engagement policies of the company. 7. Functions of a senior engineer. 8. Circumstances that hindered and facilitated innovation in the company. 9. Work cited. Abstract Engineering innovations have given breakthroughs to many problems affecting our daily lives so much so that companies and organizations are channeling more resources that never before to capitalize on the new frontier of entrepreneurship-innovations. The purpose of this report was to demonstrate the place of innovations and entrepreneurship, their importance and nature for engineers. It also aimed to highlight the impact of innovations on plant and factory environments without compromising occupational safety and health procedures. This report delved into establishing the recent innovative achievements of Baker Hughes Incorporated, the major innovative process adopted and implemented by the company where the supply chain process was looked at, the diffusion and enterprise associated with this process, the company’s cross-cultural engagement policies, functions of a senior engineer in innovation and the circumstances that hindered or facilitated innovation in Baker Hughes. Contacting Baker Hughes was quite a challenge given the number of correspondents from suppliers to consumers that write to them. We wrote a number of letters and tried to call for an appointment but with little success. We needed to make pre-visits before our scheduled appointment to familiarize with the company’s profile. This became quite a hurdle in terms of security clearance and permission to do so seeing as we had already scheduled an appointment. Getting the right respondent to our specific questions was also difficult since we had to really explain our exact intentions and then be directed appropriately to whom to ask what. The set questions sometimes were not answered satisfactorily resulting in the need to improvise impromptu to get the information we required since the appointments were under the background of busy company schedules. However, we gladly overcame all these difficulties and wrote our report. Introduction Baker Hughes Incorporated is a public listed oil and gas company on the New York Stock Exchange (NYSE), founded in 1907 and had a major merger in 1987. It operates in over 80 countries all over the world in oilfield services providing both services of drilling and their products. It has its headquarters at the American General Center in Houston, Texas, U.S. Last year, Baker Hughes was in talks with Halliburton for a merger, but earlier this year, January 2015, Baker Hughes Inc. went into talks with Schlumberger with the objective of merging. However, various lawsuits have since delayed the process as investigations into the conduct of the board of directors. Moreover, the question of whether the decision to sell shares at 19 US$ was in the best interest of the shareholders. (Pautler, 2015) Some recent innovative achievements of the company In the 2013 World Oil Awards held to honor the top innovators and innovations in the energy industry, Baker Hughes Inc. was recognized for the following. The best data management and application solution- WellinkVision mobile app, best drilling technology-Counter Force PDC Bit Technology, best drilling and completion fluids-TergoVis I Efficiency Fluid and best outreach program-Baker Hughes Endeavor Professional Development Organization. (Newswire, 2013). Some of the most innovative achievements in recent years by Bakers Hughes Incorporated have revolutionized the oil and gas industry. The company released its AutoTrak eXact high-build rotary steerable system (RSS). (Carpenter, 2015). This system’s objectives are to maximize production and using precise steering control, reduce economic risk. RSS reduces drilling complex 3D wells away from the target that shields the company from going slower than the schedule or cutting a bigger percentage into the proposed budget. The system drills shorter curve sections when compared to standard systems at 12º/100 ft. Against the conventional 5-6º/100 ft., maximizing reservoir exposure that eliminates additional costs in troublesome formations direction wise. ZX-eTM Gas Migration Prevention Annular Casing Packer has proven a sound innovation that prevents serious health risk. It gets achieved through the elimination of gas migration and blowouts from sustained casing pressure (SCP). If the seal from the cement gets compromised, bleed-off operations and other production processes would be interrupted. The ZX packer eliminates SCP by establishing an annular barrier. It saves much rig time than other elastomeric seals. The greatest gain though is that this innovation protects the environment and people from hazardous emissions. (Knebel, 2013) SorbTM Ultra Solid inhibitors are another recent breakthrough that provide many years of flow assurance and save costs for offshore wells. The solid substrate ensures treatment of the deposition of scale, paraffin, and asphaltene in deepwater environments. Fluids produced are made to come into contact with the inhibitors before reaching the wellbore where temperature and pressure changes would cause negative results in the flow assurance. Placing a long-lasting inhibitor eliminates the need for near future interventions from depositions as would be occasioned by a short term inhibitor. This technology saves millions thus significantly affects the economics of oil extraction like never before. (Baker Hughes Incorporated, 2015) For harsh environments in most oilfields, Baker Hughes has developed a solution-the Centrilift Extreme TemperatureTM (ET) ESP system. It can withstand steam and gasses at the most abrasive pressures using the abrasion-resistant technology synonymous with the ESP system. It gets enabled by the MVPTM multiphase pump design where the gas intakes in lateral orientations are more reliable thus avoiding gas and steam pressures. Ultra TemperatureTM SAGD ESP system developed by Baker Hughes Inc. was voted the best production technology during the 10th annual world oil awards. This system is operational at temperatures exceeding 482ºF (250ºC) which help develop a larger chamber of steam and the production of oil with lower viscosity. The design of the ESP system has a longer run life than the previous SAGD wells translating in less operational expenditures and production interruptions. Downhole packer and fiber-optic wet connect system another recent innovation developed by Baker with the purpose of easing the monitoring of fiber-optics in completions that require two trips such as in those of sand control. The downhole packer protects the fiber connectors against rust and other damaging agents. It performs the task through a door of sorts and provides details of chemical, temperature, seismic and pressure by combining instrument information from both the upper and lower completions. Baker Hughes added the GeoFORM Conformable Sand Management System to the industry as a first to achieve the best control of sand using the minimum cost and the technology of shape-memory polymer. Previously, production costs and compaction of the wellbore caused plugging of sand but the GeoFORM reduces this and time requirements for rig, machines used and the workers producing an efficient system for dust control. Analysts in the oil and gas industry work to minimize the costs and environmental impact costs thus the GeoFORM technology with Morphic is gaining the best response yet as an industry’s first. On the same night of the 10th annual world oil awards, the company was rewarded for having the best data management and application solution through its VisionTM web-based monitoring system. This system optimizer as a tool the electrical submersible pumping (ESP) systems performance by monitoring 2900 ESPs worldwide, generating operating data, better run life, and higher production. The monitoring system stands out by giving a fusion report across both functional and organizational lines. AutoTrakTM Curve BHA is an innovative drilling tool developed to heighten reliability and ease of operation. The BHA building rate exceeds 15º/100 ft. That enables long lateral sections drilling in one run through the global axes for a 3D cut from the part. The tool has an integrated gamma detector at the bit to achieve the best steering of the well. One of the company’s flagship engineering innovations is the AutoTrak rotary steerable drilling system. (Humorglazer, 2015). It is a fact that this system has put the company over the years in recent times, since its introduction in 1997, at the high share market position. The primary mode of operation of this is the application of a combination of the pushing and pointing techniques. The method replaces the one aspect say either push or end as is the case with the PowerDrive and GeoPilot, both rivals to AutoTrak. Many other innovations have resulted in recent years by the company since the establishment of the R&D program that focuses on improved and solution providing technologies in the oil and gas industry. More innovations in recent years include the Eco-LinkTM online tracking system, ZX-eTM gas-tight annular packer, and the multizone single-trip completion system. The major innovative process adopted and implemented by the company. Baker Hughes is always producing firsts in the oil and gas industry. From the R&D segment to the center for technology (CTI) that was built on a $42 million investment capital to provide the required research materials for engineering innovation. The greatest innovation process adopted by the company two years ago is its global supply chain group (Erick Slack, 2015). It is inclusive of product lines such as manufacturing, strategic planning, logistics, distribution and customer service resulting in an integrated supply chain system. In order to harmonize all operations, this system works in tandem with the departments of finance, quality, human resources and reliability. One Morytko heads the supply chain stream. Some of the responsibilities given to the supply chain team are sales in all the countries and regions, operations and their planning, customer service for all goods, manufacturing oversight, strategic sourcing, and procurement worldwide. The distribution, transport, logistics, compliance to industry and trade regulations and assessment of market response to the company’s products and services are also areas where the supply chain team takes charge. It is important to quantify the scale of facilities and processes managed by the team. It thus, helps to understand the scope of works involved and required from them. Baker Hughes has more than 65 supply chain and manufacturing centers all over the world some in very harsh climatic conditions. Despite all the drawbacks that may hinder the successful accomplishment of the team, they have been credited with offering satisfactorily to global customers, the company’s products and services. The company operated under an old regime. Therefore, the first focal concern for the supply chain system has been to modernize the inter-production lines linking system of Hughes. It includes improving the cycle of cash conversion by improving aspects of Baker being agile and visible globally. The result of this modernization has ensured that the company is favorably placed globally in logistics, production, and sourcing raw materials when compared to its peers in the oil and gas industry. Previously a preserve of programmers and computer geeks, more manufacturers are currently adopting the use of their tailor-made operating system (OS). Following the introduction of the supply chain group, Baker Hughes developed its own OS two years ago. The OS is the central recipient and analyzer of the processes and procedures undertaken by the company and all its affiliates. The Central placement of data and information has improved customer service since they can access all these functions, products and services offered by the company from anywhere in the world. Baker Hughes has improved, and better developed the IT infrastructure to support the supply chain group that is always evolving. The company, for base platform purposes, has adopted SAP and continued to add bolt-on products when the need arises since the supply chain stream is in always changing. Proof of the success of this endeavor got witnessed when Baker Hughes was voted the Best in Supply Chain Management during the 2010 Boston Strategies International Oil and Gas Awards. The underlined attributes were strategic sourcing, lean manufacturing, and cost reduction and supplier rationalization. Baker Hughes has moved to a geo market-focused business model from a product-based one. It has accomplished this through the structures put in place by the supply chain group. The model utilizes single contact points for a range of services from the customers, unlike the previous model that had to use multiple contact points.It eliminates redundancy and other bureaucratic hurdles associated with fragmented systems. The one-stop shop scenario is more efficient and solution oriented especially in the dynamic oil industry. The principle of utilizing local talents has helped the supply chain stream to serve the customers better at all levels through local teams for each project undertaken anywhere in the world by the company. The company’s proper experts, data, and technology are passed along to the local group’s conjunction with the experienced staff from Hughes, employ the requisite requirements and resources to drill, operate, distribute or sell the company’s variables. The company has invested in up to 20 geo market management teams and about ten regional ones for a more comprehensive customer service and response to their needs. The central regions get noted as Russia and Caspian, mainland United States, Middle East and Asia Pacific, Latin America, Africa, Gulf of Mexico and Canada. The supply chain group uses historical data for simulation in order to come up with several alert systems to monitor shifts in these trends. The overall effect has been to standardize Baker Hughes business processes and improved monitoring activities. The human capital development is another pillar identified by the supply chain group as an integral long-term investment for the company. With the presence of many employees working on supply chain segment alone, it is correct to assume that all other product lines have figures as high and investment in the employees’ development. Such data alone will secure the company a better-motivated workforce in future. Career development for this program identifies all range of employees for positions in internships to leadership trainings and workshops especially the college graduates with an MBA in supply chain management. It revolves around three years of an inter-departmental journey through the internal divisions of Baker Hughes for certification and assignments. Joe Damico, one time Director of Procurement underlines the shift in mentality about supply chain being only about the placement of orders. He says that their work is more complex since it requires the knowledge of all that goes on in all departments for improved quality delivery. It is the approach that has been adopted by the supply chain group at Baker Hughes Incorporated. In conclusion, therefore, I state that in all honesty, the greatest achievement and innovative process adopted by Baker Hughes has been the supply chain group model. It has strategically placed it well above its peers in the global arena. Diffusion and enterprise associated with the innovative process Baker Hughes has diffused and seen improved business better globally using this innovative process under its supply chain group. Through it, the groups created a business sales process and planning operations to predict and so seek to satisfy products’ and service’ needs globally to meet the customers’ requirements. For more diffusion into the global sphere, the company is investing in acquisitions and other facilities under the stewardship of the supply chain group to achieve its development agenda better. It got undertaken in countries such as Mexico, Saudi Arabia, United Arab Emirates especially Dubai and Malaysia with an emphasis on manufacturing companies. China and Thailand have also seen the company acquire more manufacturing companies than any other company. In addition, the company has enlisted more suppliers from India, Singapore, Thailand, Russia, China and Thailand to expand its global footprint. By moving some of the manufacturing units previously located in Texas and Oklahoma, the supply chain group is getting the customers closer to the company’s products and services and at the same time saving on sourcing. The constant process of building the company’s suppliers unit globally continues to strengthen the portfolio of Baker Hughes. Oil and gas are an industry that pegs a large chunk of operation costs on freight and transportation. In order for the supply chain to curb against an escalating cost every day, the group has developed well-placed logistics hubs and transportation strategies to deal with shipping of the products and materials. The same approach of strategic placements got used to the repair and maintenance units for more efficiency and reliable assets in the oil fields. The global diffusion and entrepreneurship has not been taken lightly by the supply chain group. It has evidenced by the global position of the company’s distribution centers in Houston, Singapore, Amsterdam and Dubai that ensures maximum asset movement. In conclusion, therefore, the establishment of the group by Baker Hughes Incorporated has helped its global penetration and reliability internationally. Cross-cultural engagement policies Intercultural (including indigenous) gets defined as a concept of embracing and knowing other cultures, their opinions, beliefs and sensitivity to issues seen as normal to the outside but deeply held by the said culture people. The benefits accrued from this interaction include tolerance, dialog, diversity diplomacy and respect across people all over the world. (Wikipedia, 2015) The Torres Strait Islander culture is unique to the Aboriginal one. They are seafarers and often trade with people of Australia and Papua New Guinea, where their roots are. The Islanders are more of agriculturalists. Baker Hughes, in respect to these two cultures, should come up with a cross-cultural policy where the indigenous people of Aboriginal descent are well consulted and adequately satisfied that the innovations being done on their land and habitat get undertaken with the requisite respect to their spiritual land. In the same way, the Islanders should be given an explanation of the active utilization of their land in other ways other than agriculture where, in this case, the utility would be under oil and gas exploration. The consensus amongst Baker and all other cultures would result in more innovations and eliminate delays and outright protests as happens when sensitivities get directed towards people of a different culture. Functions of an engineer with senior status A senior engineer in state in Baker Hughes has certain functions when there is a new innovation in the offing such as heading the research team of experts in them, supervising the design of the change, managing and training more junior engineers as part of their career development on field operations. The engineer also gets tasked with identifying the key hurdles in the successful development of the innovation and, therefore, has the responsibility to provide solutions to the same. Health and safety standards, as enshrined in the policies of BHI, must get complied with, and the engineer makes sure this is the case during the innovation. Circumstances that hindered and facilitated innovation in the company In the journey to innovate more and pioneer research in the oil and gas industry, Baker Hughes has experienced numerous challenges that have hindered certain milestones but in equal measure some circumstances that have facilitated innovation. Some of the challenges encountered are the extreme pressure and temperature (XHPHT), completions with big bores and working in deep water. Storage of test cells has been another challenge often in site tests that get located in some parts of the world with extreme weather and physical conditions. The personnel that work in innovation hubs at Baker Hughes are subjected to rigorous endurance tests for the rough terrain and unbearable weather conditions in some parts of the globe that they are likely to encounter in testing their innovations in the oilfields when the need arises. Some who fail and are not in the good enough fitness of health give the company a hard time in trying to replace them with persons of equal capacity and expertise. An integrated platform where all control contacts were lacking for a seamless innovation process was achieved by the establishment of the supply chain group under one Morytko. Using this group, Baker Hughes has been able to identify an innovative idea, allocate resources in capital and human terms, set a timeline and establish a supervisory team to oversee the fruition of the innovation without need for much friction between the various internal product lines of the company. The company has however developed top-notch innovations aided by the creation of the Center for Technology Innovation (CTI). This center got opened in 2009 on 14 acres of land with the goal of the continuous development of innovations in a toughening oil industry. (The American Society of Mechanical Engineers, 2012) The CTI has over 600 scientists, technicians and scientists who ensure proper scientific approaches to the various ideas floated. They have the right tools,30 000 square feet of lab space an IT department at the ready to support any infrastructure that requires so and the latest scientific technology to facilitate innovation better at Baker Hughes Incorporated. (Baker Hughes Incorporated, 2015). Work cited Read More