For asset-intensive businesses in the oil and gas industry, keeping equipment with extraordinary lifecycles ― such as pipes, pumps, turbines, compressors, and oil field platforms ― running at peak performance is an awesome undertaking.
As an asset manager, your job is to keep everything safely contained, concealed, pressurized, and compressed so that not a drop of hydrocarbon leaks into the atmosphere or spills onto the ground.
The smallest break in a critical piece of equipment can literally shut down the whole refinery or oil well at a cost of hundreds of thousands of barrels per day.
The underlying fear of every asset manager is that a single missed opportunity can lead to a disaster of catastrophic proportions. One has only to murmur the words “Deepwater Horizon” to send chills running through the corridors of every building and the veins of every employee in the petroleum industry.
An equipment failure of epic proportions, the industrial disaster in the Gulf of Mexico cost 11 lives. An estimated 8,000–12,000 workers were left temporarily unemployed. Those reliant on tourism had their incomes devastated. A multitude of marine life and birds, including the brown pelican that had only recently been delisted as an endangered species, were negatively affected for several generations.
The total cost of the Deepwater Horizon disaster has been estimated to be about $38 billion. BP, its reputation in tatters and the harm caused to the entire industry incalculable, ultimately pleaded guilty to 14 criminal charges, including 11 counts of felony manslaughter.
And it all stemmed, not from malicious intent, but from equipment failure.
So to say that asset managers have a huge responsibility is an understatement in the extreme. It’s no wonder at all that you take your job so seriously.
Your role in the organization
Challenging, taxing, and often chaotic, your job on an average day, a good day, is stressful.
You’re maintaining your equipment registry. You’re reducing overall supply chain cost. You’re managing sales, inventory, and operations planning. You’re supervising warehouse labor costs. And you’re keeping up with the technology that allows you to manage your entire team.
In recent years, pioneering asset managers have been leading the way in the transformation to digital leadership and the intelligent enterprise.
For example, when you use predictive analytics, your operational and business data helps determine the condition of specific equipment. That way, you can predict when to perform maintenance at regular intervals, based on sensors and abnormalities.
Mandating micro-detailed asset performance at each step of operational integrity, continuously observing the status of each asset in order to react to predefined conditions and events, and advising on asset utilization and operating cost are just a few of the responsibilities that are the hallmark of today’s asset managers.
Maintenance as the intelligence center
To become an intelligent enterprise, you need to have maintenance as the center of asset and integrity units.
- How many high-risk maintenance, repair, and operations (MRO) parts in inventory are redundant across facility sites?
- How close to market is our MRO parts costs?
- What is the utilization of our highest-risk assets?
- What asset has caused the most bottlenecks per product?
- What assets are down due to unplanned events for today?
- Are the unplanned outages impacting any of our planned maintenance schedules?
- Are we facing any shortages of MRO parts or labor for maintenance across our sites?
- How is our move to predictive from preventive timeline progressing?
Petrochemicals company: A customer success story
We recently worked with a global petrochemicals company that sought to automate, streamline, and standardize operations at its facilities.
The company had issues with implementing shared services for MRO procurement across multiple plants and locations. But we were able to achieve increased adoption of procurement network and utilize e-invoicing capability.
The company had a requirement for automated and standardized MRO procurement processes for geographically dispersed plants and locations to adopt. And it required features and usability inherent in the technology solutions.
The company benefited from conversion to a digital process, sub-processes, and increased compliance to processes and contracts. It also increased its cost savings in MRO procurement and reduced its purchase-order processing timeframe. And it utilized a procurement network to connect with its vendors.
The company benefited from 40% lower spend savings and a 50% improvement in its procurement cycle. It also benefited from 50% lower inventory cost.
Refining company: A customer success story
At a refining company, we were able to increase the accuracy of asset management activities to align with budget, schedule, and hydrocarbon operations. And we were able to increase cost accuracy to increase competitiveness. In addition, we increased diligence in project execution for timeframe, budget, and policy.
We delivered a joint digital refinery model and digital solutions for hydrocarbon management and asset management.
The refining company increased its savings benefits and increased cost savings in MRO procurement. It also increased asset utilization and hydrocarbon movement, as well as compliance with processes and contracts. It lowered its total cost of ownership (TCO) and had 100% tracking of MRO parts for operations and projects. And it had real-time visibility to hydrocarbon movement compared to asset management activity. More than that, it improved processing and payment to suppliers of MRO parts and labor.
The heart of your company
Asset management is at the heart of oil and gas, especially as we embark on the intelligent enterprise journey. And new technologies such as the Internet of Things, blockchain, analytics, and artificial intelligence are modernizing oil and gas production so we can avoid another cataclysmic tragedy like Deepwater Horizon. The right digital platform and data management and intelligent technologies are the building blocks of a truly intelligent oil and gas enterprise.
For more on this topic, read “Upstream Oil And Gas CFOs: Increase Oilfield Margins And Reduce Operating Costs.”