June 12, 2019

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The oil and gas supply chain: time to move from shallow to deep digitalisation | SCM



We stay in a world the place ‘talking to Alexa’ not means catching up with a buddy and synthetic intelligence touches areas as diversified as trend and safety. In the primary, digitalisation is lauded as a revolution that’s already making us all extra environment friendly, extra correct and extra related to one another.

And for the oil and gas trade the transformation has already begun – Wood Mackenzie estimates that the upstream sector alone may save up to US$73 billion over 5 years. We’re already seeing this in motion right now, from implementing software program to mannequin and analyse infrastructure efficiency, to utilizing drones and robots to examine offshore belongings. Each answer is designed to cut back safety-related danger whereas enhancing manufacturing and operational efficiency.

However, there’s a method to go earlier than we attain digitalisation’s full potential.

Shallow progress

Just twenty years in the past, a upkeep workforce may operate effectively with an Excel spreadsheet, guide information gathering, and by working by way of issues with recommendation or perception from colleagues who had been there, achieved that.

Today, digitalisation has moved upkeep from a reactive, responsive self-discipline, to a sensible, proactive and preventative operate primarily based on predictive analytics and in-depth insights into asset life and stress components.

However, as spectacular and necessary as such advances are, they’re usually confined to particular person tasks and processes, siloed to one explicit division or firm. This is comprehensible – particular inside processes are easiest to digitise, and it makes good enterprise sense to begin with the low-hanging fruit.

We, as an trade, now discover ourselves at an attention-grabbing intersection of extra new tasks approaching on-line thanks to a steady oil value atmosphere, a scarcity of expert, skilled folks to service all of them and continued value strain to do extra with much less. So, the urgent query stays – is there greater than digital can do for us?

Deep digitalisation

It’s no query that digitalisation has prompted enhancements and breakthroughs when it comes to security, effectivity and productiveness – parts which are elementary to hydrocarbon extraction.

However, there’s sturdy proof to recommend there’s enormous untapped potential. McKinsey calculated that if an operator applied the complete digital stack – IoT, comfortable automation, machine studying and superior analytics – it may translate into value financial savings of round US$11 per barrel. Not a statistic to be ignored.

But it’s price wanting on the micro, in addition to the macro degree; proper down to particular person parts. Creating and implementing data-based processes and decision-making fashions can assist specifying engineers at operators or EPCs whose job it’s to maximise security, efficiency and value effectiveness by drilling into the basics of the element. Where is the steel from? What is its chemical composition? How are comparable parts performing in different present tasks? In impact you’ve a transparent view in real-time, moderately than having to search current, fragmented information which can be outdated, inaccurate or just not accessible.

The provider, for its half, may profit from this digitised, data-led method. Feedback of efficiency information permits engineers to persistently make incremental, iterative enhancements to their tools. These marginal good points provide aggressive benefit to particular person suppliers and contribute to a cumulative uptick in requirements throughout the sector as an entire.

This is the method we’re introducing at PJV. The digitalisation of knowledge sharing has made it simpler to sit down with purchasers and say, let’s take an in depth take a look at what we’ve delivered up to now, perceive how we are able to proceed to get higher, and finally enhance efficiency for tomorrow’s tasks. This basically underpins the collaborative method during which we work to get beneath the pores and skin of our purchasers’ targets and increase every element and course of in keeping with these shared objectives.

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Partnership and collaboration

Working in such a method relies on a partnership mannequin, constructed on collaboration, belief and information sharing. Sometimes that is an uphill wrestle. Different corporations work with completely different information codecs and requirements, which means time spent translating and bridging incompatibilities. Time that may very well be spent innovating and enhancing.

Currently, corporations pursue digitalisation in isolation, forcing engineers to spend time reinventing the wheel for issues already solved. Instead, standardised information codecs throughout the supply chain would enable all events larger overarching management over the design, danger administration and efficiency of every element, system and, finally, asset.

By shifting the main target of digitalisation from inside course of to partnerships, operators improve understanding of their operations, main to elevated security, lowered prices and improved effectivity.

A concentrate on digitalisation by way of partnerships and collaboration additionally shifts the dial from a short-term, transactional relationship to a longer-term one, primarily based on worth supply. Each associate is incentivised to develop nearer ties as new applied sciences emerge and new information yields new, mutually useful insights.  

Power in partnerships

The oil and gas trade has made some nice early strides in the direction of digitalisation, but it surely’s time to go deeper. That means every of us wanting up and outward and exploring the place higher information sharing and evaluation can drive efficiencies and enhance requirements throughout the board.

At PJV, that is exactly the kind of partnership mannequin we intention for, working with our purchasers to design and ship one of the best answer, drawing on evolving know-how to discover new methods of doing so. It’s attainable to construct a virtuous circle, the place partnerships propel one of these collaborative digitalisation, and digitalisation in flip strengthens partnerships for the long-term.

Dan Munro, is the Managing Director, PJ Valves, an impartial, household owned and managed enterprise specialising within the manufacture and supply of valves to multinational vitality enterprises like BP, Petrobras, Shell, Aramco, Statoil and Exxon Mobil.

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