Value Creation Through an Integrated Approach to Performance Improvement
Authors: Chessa Costantino , Magnani Franco , De Fiorido Fabrizio 
Published: September 2013

eni is pursuing an organic growth strategy in exploration and production, built on major exploration discoveries, a robust project pipeline and strong performance in operations.

To support the achievement of growth targets with the most efficient deployment of resources, a "continuous improvement" approach was introduced.

The Continuous Improvement Program was initially focused on exploiting Headquarter improvement opportunities, running 30-40 initiatives at any given time; later the program was deployed in Geographical Units, with projects differing in size and impact.

The Program has an intentionally wide scope, encompassing processes, know-how, deployment of technologies, best practices and methodologies.

The continuous improvement process starts both from analysis of operational KPIs or improvement ideas identified in ordinary activity. It produces initiatives in multiple areas, such as Brownfield production optimization, Methodologies development, Process optimization, Sustainability and HSE. The Portfolio of initiatives is monitored and renewed periodically.

Responsibility for initiatives belongs to Line Management: HQ and GU functions, as performance improvement process key players, maintain a leading role in identifying and executing improvement projects. A central Continuous Improvement department was established to coordinate the whole process-setting priorities, capturing synergies and monitoring progress.

Specific techniques applied include Project Management, Lean Production and Six Sigma, as well as methodologies developed in-house.

A benchmark with other upstream majors was run in order to validate design choices made for the Program. It showed common mission and objectives, namely developing a culture that delivers constant results through focused projects. On the other hand, design choices for implementation are widely differentiated. Benchmark comparison also showed the importance of balancing the operational and strategic dimensions and to focusing on deployment throughout the organization.

In its first three years of running, the Program completed about a hundred projects achieving value in the order of some hundreds of millions of USD, spreading important improvements in operating practices and identifying huge potential value to be exploited down the line.

The main areas of significance of this experience are:

Specific design choices were made to fit Company objectives, which resulted in a tailored approach and immediate tangible results. The approach achieves main goals to improve measurable performances and allows for better deployment of finite resources, while supporting competence building and mitigation of risks. The approach allows technical and operational best practices to be spread throughout the organization. The chosen operational model allows to manage effectively a portfolio that includes both Top-Down and Bottom-Up initiatives and has to be managed actively, balancing initiatives carried out in geographies and global projects planned by the HQ. The approach also allows to set priorities and steer initiatives portfolio towards strategic goals, also spotting uncovered areas and direct future efforts. Rigorous project monitoring is key to guarantee achievement of milestones. Measuring value created by initiatives ensures actual implementation and contributes to evolution of portfolio.

Overall, the continuous improvement approach provides a key contribution to value creation, through better performance across geographies and the development of a culture of change.