Our journey to Continuous Improvement Stavanger | September 26, 2016 Bengt Persson SVP, Head of Quality and Performance

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Aker Solutions is a global provider of products, systems and services to the oil and gas industry

13,000 EMPLOYEES

20

COUNTRIES

Solstrandseminaret om olje og økonomi

50

LOCATIONS

175

YEARS OF EXPERIENCE

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Lean initiatives have been around in Aker Solutions for many years

Geographically spread Division specific Focusing on factory sites

5S

VSM

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White board meetings

A3s

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However, given the market situation and project performance, we saw a need for a more structured approach to improvements

US$ / bbl

US$ / bbl

Brent crude oil prices

Findings from survey on EPC projects

140 120 100 80 60 40 20 1985

64% Nylig kollaps

1990

1995

2000

2005

2010

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Significant cost overrun

73% Significant schedule days overrun

2015

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Global Improvement Program – #thejourney

Targeting minimum 30 percent improvement in cost-efficiency across company and building culture of continuous improvement

Simplifying work methods, organizational set-up, geographic footprint and products and services

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Leaner and more efficient processes that reduce overall costs of projects and products while boosting quality

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2015 Annual report

The results we see today

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#thejourney – Lean SemiTM Production Platform Low-Cost Floater Unlocking Marginal Fields

30 %

reduced weight compared to a conventional topside design

§ Designed to make marginal field

developments with reserves up to 300 MMBOE viable in a low oil price environment § Based on proven building blocks with

conventional standard equipment § Down to 29 months delivery time § 6,000 metric tons topside

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#thejourney – Engineering

30 % reduction in Engineering & Procurement service cost

50 % new target for cost reduction by the end of 2017

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#thejourney – Manufacturing Tranby, Norway

50- 80 % reduction of lead time for assembly and testing of x-mas trees

20 %

reduction in direct hours

180%

increased machining run time

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#thejourney – Fabrication Egersund, Norway

28 %

productivity improvement on direct fabrication on subsea projects last 12 months

38 %

productivity improvement on scaffolding last 12 months

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#thejourney – Maintenance, Modifications and Operations (MMO) Selected project, Norway

64 %

reduction of man-hours and

57 %

reduction of costs

in project execution compared to study

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#thejourney – Supply Chain Excellence

70% reduction in number of active suppliers by Q316

70% Reduction in Quality Surveillance related travels as hubs are organizing inspections to provide a leaner, simplified and more efficient service

193MNOK renegotiation of open Purchase Orders

.

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Our journey so far…

2015 Build up

2014 4Q Piloting

2016 - 2017 Global rollout

#thejourney

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What is our approach?

Lean principles embedded in Quality and Operating strategy

Lean principles

Visible, coaching and driving change Leadership

Leadership

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Lean training and coaching in all levels of the organization

Training

Improvements done locally and implemented globally

Operating system

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Lean principles in Aker Solutions

1

Understand customer value and create value from the customer perspective

2

Prioritize value chain flow efficiency over resource efficiency

3

Visualize work flow, progress and performance

4

Work according to defined standards and continuously improve

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Improvements executed and followed-up in a structured way Initiatives identified & potential validated

Target & Principles Established

Activities initiated & executed

Bottom line impact updated

KPIs established to track progress

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First of all, before you jump into execution…..

1

Understand the problem “What are we trying to solve?”

3

2

Pick the right approach Keep it simple Build on what is already there

Verify with key stakeholders

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Reconfirm problem statement Achieve a common view

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…then start testing and showcase the results ■ Run short, carefully selected pilots

■ Work with your change agents

To be updated

Results Work card preparation at SNADF in MMO

Engineering XMT Tranby in Kaombo

-54%

+172%

+76%

+78% Before After Plan

Team 1 Team 2 On time delivery (OTD) of documents

■ Deliver significant impact and

create awareness around the results

Lead time

Approval of supplier documentation in Kaombo WP03

-24%

+120%

-83%

Handled within a week

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Slide 18

Lead time

Productivity

Minor Modification project in MMO

-64%

Lead time

November 5, 2015

-57%

Cost

Preferred partner

Creating a demand and “pull” in the organization Solstrandseminaret om olje og økonomi

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Along the way, we learned a lot about our operations …the root causes to our problems ■ Focusing on resource efficiency

and not flow

■ Lack of common view and

synchronization

■ Not aware of internal customers and

customers’ requirements

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We have demonstrated our ability for a step change in performance

But how to build a Continuous Improvement culture and ensure sustainability?

Step change

Continuous Improvement

100%

50

NOK bn 0

0% 2015

2016

2017

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■Improvements

need to be a part of daily work and everyone’s responsibility

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Create ambition and purpose to lead the way ■ Align and commit management to

ambition ■ Communicate purpose and be

transparent ■ Demonstrate a genuine commitment to

employees’ improvements efforts ■ Empower employees, offer training,

coaching and mentoring ■ “Just do it” micro improvements ■ Recognize improvements and

achievements

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Collaboration is key Collaboration with customer and suppliers boost business’ competitiveness

We see potential reduction* in collaboration:

10% in quality cost 40% in supplier documentation 40% in technical requirements to suppliers

50% in lead time reduction

* Based on selected project

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Questions and Answers

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