A framework for the implementation of 'Lean' construction principles in Engineering, Procurement and Construction (EPC) in the oil and gas industry

The oil and gas industry is one of the largest sectors in the global economy and as such the sector makes significant investments in all phases of the production process, including the construction of oil rigs/platforms. However, it is well documented that productivity in the oil and gas construction sector lags behind that of other manufacturing industries. Specifically, the bespoke nature of oil and gas projects means that it is difficult to implement efficient management systems, which in turn lead to significant waste in oil and gas construction processes. Almost 80% of oil and gas projects fail to deliver on time or within budget, which again highlights problems within oil and gas construction. Furthermore, COVID-19 and the global shift away from fossil fuels mean that the oil and gas industry is expected to face additional challenges to be cost- and schedule-effective in the new normal. Various management tools exist to tackle efficiency issues in the construction industry. For example, 'lean construction' has been demonstrated to successfully reduce waste and promote continuous improvement in industries (such as car manufacturing) where there are standardised production lines. However, construction in the oil and gas sector is recognised as being non-standardised, with each new oil platform being a bespoke design. Management tools, such as lean construction, have the potential to enhance the performance of the oil and gas construction industry. However, the concept of lean construction is not widely understood in the oil and gas industry, and there is very little research on this subject. The aim of this study is thus to evaluate the effectiveness of implementing lean construction principles and methods in the non-standardised engineering, procurement and construction (EPC) sector of the oil and gas industry. The study utilised a combination of quantitative and qualitative research methodologies. The quantitative methods included a survey of employees of an EPC oil and gas construction company to obtain their views on the awareness of lean construction methods, critical wastes generated and the barriers to implementation of lean construction in EPC in the oil and gas industry. The data obtained from the quantitative survey was analysed using statistical tools. This was followed up using qualitative methodology which involved conducting a semistructured interview to obtain more detailed opinion from experts on the wastes, barriers and the critical success factors to be considered while implementing lean construction in the EPC oil & gas industry The qualitative data from these interviews was analysed using thematic analysis. Analysis of the surveys/interviews revealed that the top five factors contributing to waste generation in EPC in the oil and gas industry were: the long approval process; waiting due to work not completed by others; time for supervising and inspecting the construction process; time for transporting materials and equipment; and waiting for materials and equipment to be delivered to the site. The study also revealed the top five ranked barriers to the implementation of lean construction in the oil and gas industry as: improper resource management; slow decision-making processes due to a complex organizational hierarchy; lack of technological adaptation; lack of technical skills, training and understanding of lean techniques; and uncertainty in the supply chain. Furthermore, it was established that critical success factors need to be considered while implementing lean construction in an EPC company in the oil and gas industry, which could be used to address the challenges and negative impacts of lean construction implementation. Some of these identified in the study are the role of management education and training; innovation; culture; and lean principles and techniques. A framework for assessing the implementation of a lean construction approach to EPC in the oil and gas industry was initially developed based on a review of existing literature and was further refined according to the results of the quantitative and qualitative data analysis. Overall, the study provides new information in the area of lean construction in an EPC company in the oil and gas industry, which was previously unexplored. It also identified the wastes and barriers, and the critical success factors that need to be considered while implementing lean construction in an EPC company in the oil and gas industry. The study also puts forth a framework for assessing the implementation of lean construction in EPC in the oil and gas industry, which is simple to understand and implement and, at the same time, flexible enough to suit its ever-changing complexity.