Warehousing, storage and inventory management

Because of the risks and costs involved in the oil and gas operations, maintaining a high stock of equipment and materials has always been evident in the industry. This, in turn, requires large warehouse space, equipment and people to manage the operations. The role of warehousing has always been to receive, store and dispatch equipment and materials.

Yet, achieving best practices and ensuring the most effective flow of materials, storage and inventory management is challenging. Efficient resource utilization, stock turn rates, error-free picking and space utilization, is where significant opportunities for improvement reside, especially in the oil & gas industry. There are a number of methodologies and approaches used in warehousing and inventory management, but the degree of caution shall be exercised – oil & gas industry is not driven by moving a high number of SKUs and alike; safety and reliability is the key. Hence, the balance between the traditional stock management and industry specifics is vital, with qualitative analysis of each step involved in warehouse operations. Improving information flow between the supply chain group and operational personnel is one of the key areas of focus that can produce significant benefits.

Materials Handling, loading and offloading

The number and type of equipment used in materials handling operations are fairly standard in most of the applications. Yet, due to the large exposure of people to safety hazards, a number of tailor-made and modified equipment is becoming a widely accepted practice. In addition, special bulk handling equipment is used in the industry to automate bulk materials storage and transportation.

Handling of dangerous goods is a separate discipline that may require specialized expertise and qualifications. Re-packing of general cargo, as well as classified (IATA, IMO, ADR) cargo, may be required on many occasions, i.e. in fully integrated operations with no vendor-managed-inventory practices in place.

Truck & Fleet Management

Effective management of transportation resources could be very critical to drilling operations, in particular when multiple locations are served. Effective planning and scheduling, as well maintenance of the vehicles play a very important role in ensuring an interrupted supply of materials to the locations. Optimizing the best routing and maintenance requirements is achieved using special fleet management software packages, whereby vehicles dispatch is as efficient as possible, as well as providing more effective visibility on vehicle maintenance and breakdown.

Vessel Routing & Management

Offshore Supply Vessels (OSV), also called Platform Supply Vessels (PSV) are used for transportation of materials between the supply base and offshore locations. Storage capabilities of offshore installations are the most important single constraint that makes effective vessel utilization challenging, with routing being the most complicated process. Many of today’s vessel routing is done using manual tools without the utilization of any software packages.
With the space being the biggest constraint ineffective vessel utilization, in many occasions, equipment and materials from offshore installations must be unloaded, before the new supply can be transferred to the installation, which results in requirements for a larger deck space on the vessels, hence more costly logistics operations.

Weather is another challenging aspect, as unworkable sea conditions affect vessels’ route planning and availability. Sudden demand spikes for equipment and materials from offshore installations add another critical dimension vessel operations management. Effective vessel utilization involves a large amount of coordination between all user groups with a requirement of strong integrated demand planning, achievable via various planning and / or ERP software packages.

In addition, those packages allow real-time visibility (tracking) of vessels’ locations that provide a better understanding of fleet utilization and fuel consumption. With multiple vessels operating the field, dispatching the closest vessel may help during sudden demand spikes. Moreover, vessel tracking provides an insight into vessels pre-agreed most optimum route and sailing speed to achieve the most effective fuel consumption.

Pipe Storage and Handling

Tubular products used in the oil industry (also known as OCTG) require a vast amount of open (and closed) storage facilities designed to store multiple joints of pipes, with easy access for loading and offloading, as well as inspection and rig dispatch preparation.

There are a number of industry-used standards on storage and handling of OCTG, yet manufacturers recommendations are considered to be the most robust. Those instructions govern the handling, storage, and inspection requirements, to ensure OCTG can be used and the cost of inspections and repairs are reduced to a minimum. This is in particular critical in Chrome and Premium connection OCTG.