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Reducing Waste in Oil and Gas Through Standardization

It’s no secret that the oil and gas industry has much waste that needs to be addressed. One of the issues that is common in the industry is the lack of standardization in parts and equipment.

For example, sometimes when parts are created by two different engineering, procurement and construction suppliers, they may use different naming conventions. This makes it harder to manage stock. When you need a replacement part, you might already have one in the inventory, but because it is not correctly codified, you can’t find it. So, you have to order it again – wasting time and money. You may even need to pay a priority procurement fee if you need the item quickly.

A solution is to use software to standardize and catalogue all items in the design and operation of your plant. This dramatically reduces engineering cost, especially in a global environment. It helps you ensure the same code or description applies across the business and everyone on the team can communicate in the same materials “language” to save time and money.

Hexagon’s Smart Reference Data enables corporate and project-specific material data standardization, which is rule-driven and user-definable. Add to this, Standard Database – a subscription-based product that provides a vast library of content from various standards organizations, which are kept updated and enriched by a dedicated team – and you dramatically compress the timeline and upfront effort required for an optimum start. The content is then used to seed the various design solutions, using pre-built interfaces.

As you design your facility or use contractors, the standard codes work in the background to enhance the intelligence of the design and assist in future procurement, construction and maintenance processes.

As the design phase moves into the procurement and construction phase, Hexagon’s Smart Materials facilitates design-led procurement and gives you the confidence to effectively manage your procurement and inventory, as well as supplier information and reporting.

Suppliers can register online and bid on RFQs. Bids are then evaluated by the procurement manager, winning bidders awarded, and the purchase order is issued. The expediting and traffic teams can use powerful capabilities to ensure timely delivery and manage the inspection and logistics processes.

In large construction projects, the amount of material and complexity of the procurement process is enormous, making efficient warehousing a critical factor.

When construction projects take several months or years, materials forecasting is key. To optimize the project, you need to be able to know what materials are available and what is expected soon, so you can create work packages in the correct order, and the sub-contractors have the materials they need.

Smart Materials reduces waste through several of its features.

Firstly, if you have confidence in the design, and in the handover from design to procurement, you can order exactly what you need. The sub-contractors won’t be wasting time on site waiting for materials. You will also have no fear of shortage, so will have no need to over-order for contingencies.

Also, once the facility is operational, it will be easier to access the parts and materials you need for repairs and maintenance. And if parts are standardized, then there is less chance of wastage and a better chance of finding the part you need.

In fact, a study conducted by a major owner found that by reducing the variety of valves used in its plants, the company was able to derive some 30 per cent cost savings and 80% inventory reduction.

Think of it as your toolbox. If it is well organized and standardized, you might save yourself a trip to the hardware shop to buy a particular washer you already have.

Finally, standardization and better inventory management will improve safety and risk management, meaning less downtime and fewer lost-time injuries. If a part fails, you can match its heat number to identify other parts from that same batch that may also be faulty. Smart Materials stores heat numbers so you can easily track them.

You can save time and money by reducing wastage through using Smart Materials to manage your design, construction, supplier information and inventory.

Get in touch with us for more information or to book a demonstration.

About the Author

Vineesh is a senior Solution Consultant for Hexagon’s Asset Lifecycle Intelligence division, specializing in standardization, procurement, fabrication and construction solutions. He is responsible for leading pre-sales opportunities in the Asia Pacific region and collaborating with cross-functional teams on go-to-market strategies. He has extensive experience in solution architecting, consulting and business development. He is based in Perth, Western Australia.

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