Historically, value engineering is applied to individual components of a product, striving to improve value through engineering and manufacturing efficiency, reducing cost for those individual components. When the concept of value engineering is expanded from the component level to the larger and more complex system level, the opportunities to reap cost benefits and improved functionality are greater than the individual components would provide.

During 1996 Shell and FMC undertook such a system level focus by initiating a value engineering exercise for their deepwater subsea tree system. In this exercise Shell and FMC were seeking breakthrough innovation which could lead to significant reductions in installation cycle time, capital expenditure, and project cycle time. This paper will illustrate this eal life example of how value engineering was applied at the system level to act as an enabler to create breakthrough value.


In 1995, Shell was planning multiple deep-water subsea development projects upcoming over the next ten years and beyond. Each subsea development had differing needs and requirements. Historically, subsea trees were custom designed to meet the needs of a specific project. This approach was not only costly, but increased delivery time, increased installation times and led to poor product reliability.

A custom designed subsea tree was costly not only in terms of capital expenditures, but consumed precious engineering resources lengthening the project cycle. Each new tree design required extensive testing to prove out the design. The unfamiliarity of each new tree design led to sub-optimal installation times. The learning effect that comes from repetition had not been established.

If Shell and FMC were to satisfy the demands of the upcoming projects, a standard subsea tree was needed. More specifically, a standard tree design that could realize benefits resulting from repeatability, but yet meet the varying needs of the upcoming projects. The standard design could not be rigid. Flexibility was key if one tree design was to sufficiently meet the broad cross-section of needs that these projects presented.

Utilizing modular components that provided a sufficient number of options could create flexibility. The automobile industry has done this by creating a frame upon which many different models could be built. They further enhanced thisapproach by offering packages of individual options rather than offering each option independently. In order to utilize this modular or custom package approach, the requirements for all the upcoming projects would need to be defined. Only thencould the significant reductions in installation times, capital expenditures and project cycle time be realized.

This was a complex multi-faceted problem that required the input and expertise from many different disciplines. No one group or individual would be able to solve the problem. A cross-functional group would be needed. Input was needed from those designing the tree system, designing the well completion, installing the subsea system, to those who were operating and ensuring the availability of the system.

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