Lean for environmental remediation portfolio manager successBethany Zinni, P.G. Haley & AldrichJeffrey Baker, P.E. Tesoro Corporation

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1 Lean Overview

2 What was the challenge?

3 Lean Approach

4 Improvements to Date

5 Tesoro LSS Initiative, Results & Impact to Portfolio Manager

Agenda

Lean overview - originsFord Assembly

Toyoda Loom

Venice Galleys

Continuous Improvement

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Lean overview - principles

Lean is a system of thinking and acting that:

Increases Value

Reduces Waste Respects People

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Lean overview – value and waste

• What is “value”?– What customers want,– When they want it, – In the amount they want it, – And where they want it delivered

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Lean overview – value and waste

• What is “value”?– What customers want,– When they want it, – In the amount the want it, – And where they want it delivered

• What do we mean by “waste”?– Resource waste / Defects– Overburden– Unevenness– UNUSED EMPLOYEE CREATIVITY,

CAPABILITIES and CAPACITY

All waste obstructs value in some way.

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Lean overview – respect for people

By engaging people who do the work every day, we can collectively:

• Learn about pain points

• Share and create knowledge

• Find hidden resources

• Begin to envision ideas for improvement

• Create ownership and consensus

• Develop problem solvers – Lean ‘eyes’

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Lean overview - kaizen

Kai - take apart and make new/better

Zen - think about so as to help others

A Kaizen is driven to two imperatives:1. Solving Problems2. Eliminating waste

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Tesoro portfolio management challenges

Lacked consistent regulatory

reports

Nothing standarde.g. 15 consultants= 15+ report

formats

No good way to compare sites across

the portfolio

Tesoro PM - too much time

on ‘admin’; not enough on strategic work

No good way to track key

metrics (spend,

progress, etc.)

Lack consistent, effective

remedial system O&M/alignment

on goals

Potential for portfolio

expansion was

significant

Impacts to Tesoro Project Manager• Work was reactionary – no proactive thought

– Constant firefighting – too much ‘noise’ in the portfolio

• No standard approach to portfolio/project management = no way to strategically make spend decisions

• Report reviews were time-consuming, awkward and boring; lacked advocacy/focus – merely ‘data dumps’

• Invoice, budget and reserve review and tracking ate up significant time (35%)

Countermeasure: Use Lean to ‘go slow to go fast’ & invest a little (time/$) to save a lot

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Approach – Kaizen 1 - May 2007• First step was to ‘kaizen’ Tesoro

portfolio management as a whole– ID Tesoro value– Map the process

• ‘See’ together what actually happens– ID problems

• Where is value not being met?• Assess level of waste & ability to improve

– Ideas to increase value/remove waste

Look at value – decide

where to focus

Map out the process

Prioritize what to work on first…..

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Approach – Kaizen 2 - Aug 2007• Regulatory Reporting

– Get the right people in the room– Start with Tesoro value– Map the reporting process

• ID the gaps between what happens and what the customer values

– Develop plan to improve • Implemented on 50 sites for 8 years

– Check and Adjust (Feb 2015)• Applied to acquisition portfolio and new

Tesoro PMs and consultants (200 sites)

Understand what Tesoro values…and

deliver it!

Approach – Kaizen Regulatory Reporting - results

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>$3M annually in

savings

$250K annual

savings –admin

(rev/mgmt)

Template used @

~200 sites by 75

consultants

Template approved

by >90% of regulators

Reports are visual & succinct

Advocacy built in; Site closure rate

increase 50%

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Improvements to date• It’s the way Tesoro and their team

do their work – day to day activities and building

into our culture– everyone is learning to work this

way • ID-ing waste/seeing opportunities• Understanding customer value

Terminal Site Technical Review – November 2015

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Improvements to date

Reserves mgmt,

tracking & reporting

Standardize financial

management and documents

Site closure strategies

Site strategy program

development

Spill response & remedial planning

Sustainability program design

Acquisition planning /

mgmt

Remedial system O&M optimization

Results - summary

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Increased site closure rate

(50%) = millions saved

Reduced risk across the

portfolio by 30%

33% faster report

submittal & turnaround

Decreased ‘admin’ time for Tesoro PMs by 50%+

Increased collaboration across Tesoro

team

Tesoro Environmental Remediation

Reserve Accounting

System

Portfolio

Evaluation Tool

Standard Regulatory Reporting

Standard remedial

system O&M

process and

reporting

Streamlined Acquisition Planning

Processes (lease or buy)

Internal Audit &

Site Strategy

Program

Metrics:

Standard Work Developed:

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• Early adopter shift in role from project work to long term portfolio strategy/special projects

• Spending significantly more time on project strategy & planning

• Regulatory advocacy has resulted in improved standing with agencies

• ‘Brain trust’ / optimized consultant team

Results – the portfolio manager

May seem like we’ve spent a lot on Lean…but ROI has shown a more than worthwhile investment of

time and resources.

Tesoro Corporate Lean Journey• Recent company-wide initiative to

implement Lean Six Sigma (LSS) to improve business processes across organization

• Jeff has been leading the implementation of Lean to his environmental portfolio since 2007

• Today, Lean approaches are actively being applied to the management of the entire remediation portfolio

Jeffrey M. Baker, P.E.Lead Engineer, Environmental253.896.8708jeffrey.m.baker@tsocorp.com

Bethany Zinni, P.G.Haley & Aldrich, Inc.Lean Practitioner, Project Manager585.321.4257bzinni@haleyaldrich.com