Even at the height of the COVID-19 pandemic, maintaining the flow of oil and gas is vital to keeping businesses operating. Sourcing the right parts for everything from planned maintenance to offshore emergencies demands a dependable, fast MRO supply chain.
With planes grounded by pandemic lockdowns and millions of commuters working from home, the pattern of energy demand in the UK has been radically altered by COVID-19. But the job of maintaining oil and gas infrastructure has had to continue unchanged. Maintenance, repair and operations (MRO) professionals face particular challenges in the oil and gas sector. Most UK production takes place offshore in hostile environments and downstream processing is also safety critical.
The nature of offshore operations makes assets vulnerable to extreme weather and sea conditions that can also prevent engineers reaching locations quickly when machinery fails. Emergencies are not uncommon. All of which increases the importance of preventative maintenance and the need to have stock on site to deal with unplanned issues. Shutting down a production platform incurs very high costs from lost output.
In this environment, cloud-based condition monitoring can prove invaluable. Sensors that track the performance of critical components in real time not only give advance warning of failures but also provide valuable performance data.
By analysing the data generated by condition monitoring, it is possible to improve the scheduling of planned maintenance based on the actual performance of components rather than assumptions about their service lifecycles.
Avoiding ad hoc purchasing
Multiple customer sites in the oil and gas industry make it harder for companies to ensure compliance with procurement policies across their business and they increase the temptation for engineers to rely on locally sourced ad hoc purchases. This in turn pushes up costs and makes it hard to achieve the cost efficiencies of planned MRO activities.
The Indirect Procurement Report 2020 – The evolution of MRO procurement, compiled by RS Components with the support of the Chartered Institute of Procurement & Supply (CIPS), found that the average UK company is using 88 different MRO suppliers.
Almost half of companies acknowledged they needed to do more to ensure better procurement contract compliance in an environment where cost pressures are mounting. In the UK, 17% said the pandemic had prompted them to rationalise the number of suppliers they were using in order to improve procurement efficiency.
The oil and gas industry is no exception. As it seeks to rationalise the number of suppliers, the RS Local network of branches can provide the speed of supply to mitigate against engineers being tempted to make ad hoc local purchases.
A contractor supporting offshore facilities for the oil and gas industry made an out-of-hours call to its RS Local branch on a Saturday afternoon, after a leading supplier of testing equipment had issued an urgent recall of products. These products were in service, but with the electricians occupied on various rigs and boats, necessary checks were not able to be carried out. The contractor was able to find a suitable replacement kit, but the standard delivery time would be Monday morning. Various members of the RS Local team were able to find a solution for the customer, which resulted in the product arriving at 5am on Sunday morning and the contractor being able to safely and accurately carry out necessary work.
Always at hand
Availability of products in a timely manner and confidence of supply is critical to the day-to-day running of oil and gas companies. RS ConnectPoint™ is ideal for addressing these issues, although connectivity may be an issue on some offshore locations.
eProcurement tools such as RS PurchasingManager™ allow MRO professionals to delegate buying decisions to engineers and line managers, while retaining budgetary control and oversight through pre-set spending limits.
Companies in all sectors struggle to keep track of procurement activity, especially where orders are placed by multiple employees. Hidden costs associated with setting up new vendors, raising purchase orders and processing invoices and payments soon mount up. A customisable tool that allows engineers to place orders using mobile devices works well in a dispersed industry such as oil and gas. And simplifying and automating the purchasing processes, especially when using a single purchase order, can save significant costs.
Given the complexity of oil and gas downstream processing plants, enabling an engineer to place an order without needing to return to the office saves time and therefore money. Fast delivery means the parts are ready to install within 24 hours. Some companies use contractors to carry out routine work, especially facilities management (FM). This can lead to higher procurement costs, especially if the FM contractor simply recharges the price it pays directly to the company. Adding the contractors working on your site to your e-procurement system, with appropriate authorisation levels, will provide visibility of MRO purchasing and enable your company to get the best value.
Oil and gas is a safety-critical industry and it’s vital employees have the best personal protective equipment (PPE) compliant with the latest standards. It’s therefore important to select a supplier who can deliver the appropriate PPE for the type of workplaces in the sector.
When it comes to selecting a value-added supply partner, experience and knowledge of your sector is essential. So too, of course, is their ability to stock a large range of appropriate components.
In today’s financially stressed times, it pays to take the long view. Buying ad hoc at the cheapest price will not save money in the long run due to the hidden costs of processing one-off orders. Nor will small local suppliers be able to offer advice and support about products and procurement process.
The RS Components team have unique insights into oil and gas because they are supporting the industry every day to become more efficient, profitable and productive in today’s highly challenging environment.
RS Components have expert advisers on hand to talk through any MRO challenges you may have and can can give you examples of how we’ve helped organisations overcome them. If you would like to speak with one of them, please contact us here