Maximizing Supply Chain Efficiency
By Marwa Eltohamy, Business Development, Vintri
The Oil and Gas industry is dealing with major global events which are triggering an expedited need for innovation and technology. The Supply Chains for Oil and Gas projects must maximize their efficiencies to run as lean as possible without compromising quality and safety. Working on process enhancements to better facilitate the flow of information can have significant positive effects on the supply chain and their mutual end customer. Better data sharing between stakeholders leads to collaborative relationship between the nucleus firm and its suppliers and service providers, which leads to mutual gains and savings.
Global supply chains (SC) are moving toward collaboration and transparency between all stakeholders within the network and the Oil and Gas industry will not be exempt from this. Capital projects need to maintain the flow of information throughout engineering, design, procurement, construction, commissioning, operations, and retirement / transfer. Previously, supply chain’s focus has been on the materials and services, which limited the group to sourcing and logistic efforts. The new definition of supply chain management is moving toward an actual chain with all elements connected and the end in mind from the very beginning. This includes incorporating demand forecast and analysis in making sourcing and logistics decisions and moving toward pull systems instead of push systems. This is why process enhancement and refinement are vital components to complete the chain idea. Technology is finding its way in the industry and in order to gain the most out of technology, we need standardized, accurate, and accessible data. This is especially important for capital projects where the nucleus firm has control over what to capture, how it will be captured, and in which format. Such form of usable information is fundamental to all aspects of SC such as the order fulfilment process where data needs to be inspected and validated against original engineering specifications, relevant regulations, and contract conditions. This alone can provide significant savings and efficiencies to the overall project.
Maximizing supply chain efficiencies is needed now more than ever. Organizations can look to data and technology to help reduce unnecessary costs and prevent project delays. Understanding and leveraging data throughout the supply chain will enable better resource allocation, automation of routine tasks, minimization of over ordered or wasted material, and much more.
A few real-life examples would be:
Eliminating expediting costs due to material that was not ordered or missed from the PO
Deployment of leftover stockpiled material from a different project because it has maintained total traceability
Avoid standby charges while critical records such as Material Test Reports (MTR) are tracked down
Automating these tasks can lead to engineering / professional hours being more valuably deployed for the tasks that requires a human brain, which will have a great impact on morale due to job satisfaction.
Other benefits include:
Providing transparency and visibility into each node in the supply chain which allows for productive accountability.
Digitizing processes and data capture which mitigate risk by eliminating human error and substantially cuts down on post-production processing.
Accurate and accessible data across an entire supply chain can act as the foundation for a more predictive and proactive supply chain. This data will allow the nucleus firm to explore many more opportunities to extract further value and benefits.
Some potential opportunities include:
Feed project cost forecast estimating tools and lessons learned initiatives
Depict the actions taken in the field five years from now when integrity efforts are underway
Analyse suppliers from the metadata perspective evaluating their KPIs
Integrating the Usable Data* with powerful data visualization and analysis platforms
A critical first step in this digital transformation journey is planning out how the nucleus firm will achieve accurate data and then store it securely. Accessible and secure are not always intersecting when choosing a method