Here's How Shell Used Systems Engineering to Improve Efficiency

In 2014, a 40% price drop brought more to the oil and gas industry than just lower profits. For one company, Royal Dutch Shell (Shell), it ushered in a comprehensive shift in thinking about the development approach for new capital projects and technology. In 2016, Shell included MIT in its efficiency improvement and energy transition plans by enrolling its first cohort of engineers in MIT xPRO’s four-course program, Architecture and Systems Engineering: Models and Methods to Manage Complex Systems.

Shell applied systems engineering principles to their efficiency improvement and energy transition plans in three key ways:

1. Shell trained their team online to create a common, team-wide systems engineering vocabulary. Many individuals at Shell had to understand large, complex technological and commercial portfolios: from engineers, to Shell customers, to C-suite executives. Using Systems Engineering as a framework helped Shell’s engineers create a common vocabulary through which everyone on the team could visualize these systems, advance in the development process, and rationally manage requirements, interfaces, designs and risks.
2. Their engineers didn’t just focus on whether something could be done, but on whether it would be done well. “Shell is focused on the successful system, not just the technically correct one,” said David Kordonowy ‘02, a Systems Engineering Expert at Shell, and MIT alum. The key to building a successful system? Creating a common vocabulary and understanding of that system (see above), stating the problem definition up front, and then discussing all potential solutions.
3. They applied systems thinking across portfolios. Shell’s Capital Projects group previously organized its portfolio of projects thematically around a technology, asset, or business. MIT xPRO’s Systems Engineering program helped the Shell team take a more integrated approach to improve the flow of projects. “This has helped shift our understanding of commerciality of projects, and allowed us to concentrate on the ones with the best commercial potential,” Kordonowy said.

Take a deeper dive into how stakeholders at Shell boosted the efficiency of their capital projects with MIT xPRO’s online Systems Engineering program. Access the full white paper.