National Oilwell Varco

Sam Houston Parkway Houston, Texas –

National Oilwell Varco (NOV) is a worldwide leader in the design, manufacturing and sales of components and systems used in oil and gas drilling. The company has 683 facilities in 44 countries.

At the Sam Houston Parkway facility, NOV produces power systems for application in drilling rigs.

Results presented by Mohammed Shakeel Shaikh (Industrial Engineering Manager) and Arlyne Han (Operations Process Engineer) at the QRM 2008 Conference.

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QRM Background

Building on QRM implementation success at other NOV facilities, Sam Houston Parkway used QRM to deal with a set of challenges.


  • High increase in demands: from less than 10 units of Top Drive System (TDS) houses in 2006 to 120 units in 2008
  • Old, deteriorating facility
  • Facility overloaded with material and people
  • Shortage of indoor warehouse space leading to inventory damage
  • Inefficient material flow
  • Outdoor work delayed by weather
  • Inadequate test facilities
  • Gaps between facility and product line vision

Implementation & Results

Step 1:
  • Organization and standard work: 5S & kaizen, shared tools/equipments, cross-training
  • Improved material flow
  • Scheduling
  • Engineering/design improvements
  • Reduced labor hours/house from 420 in 2006 to 342 in 2007
  • 20% reduction in manufacturing lead time: $3000 savings/house
  • Reduction in staffing from two shifts of ten people to one shift of twelve people: $73000 savings/month
  • $3000/month reduction in transaction cost
  • Reduction in customer lead time from 12 weeks in 2006 to 8 weeks in 2007
Step 2: Quick Response Dual Sourcing – outsource standard products to NOV-Shanghai, design and build customized equipment in the U.S.
  • Outsourcing standard items resulted in cost reduction because of less labor and raw material
  • 24.1% cost reduction for Power House
  • 42% cost reduction for Drillers’ Cabin
  • Local vendors supplying parts for customized products resulted in smaller feedback loop on quality issues and smaller RFQ to delivery time