How marginal gains can reap huge savings in the long run
28 November 2016
Although the downturn of the oil and gas industry is likely to have lasting effects, not all of these are necessarily negative. Fraser Graham of Arnlea Systems says there are now real opportunities for companies which invest not just in big ticket items but also scrutinise everyday operations and go after marginal gains.
It is estimated that in 2015 more than 84,000 jobs linked to the oil and gas industry were lost, and that figure is expected to reach around 120,000 by the end of 2016. Deirdre Michie, the Chief Executive of Oil & Gas UK, has said: "To survive, the industry has no choice but to improve its performance. It is looking to find efficiencies to restore competitiveness, to attract investment and stimulate activity in the North Sea.”
Many companies are taking to heart the recommendations of the Wood Review on Maximising Recovery from the UKCS which concluded: “Securing a sustainable future for the UKCS requires a reduction of 20% - 40% in operating costs, whilst enhancing maintenance, inspections, asset integrity, compliance and safety within the supply chain and operations.” The question is, how do you reduce costs to this extent without jeopardising safety?
The concept of marginal gains has revolutionised sports, especially British cycling. Now these practices are being put in place in businesses across the country, where incremental changes across various aspects of the business can altogether may make a considerable difference.
The advantages of using new technology and systems
Using technology to improve process is seen as a key driver in reducing costs for many oil and gas and other high hazard facilities. Introducing Auto ID technology such as RFID and software solutions for inspection and maintenance not only speed up processes and improve data capture accuracy but also allow the operator to reduce hefty third-party inspection costs. At the same time, this allows the operator to have full, 24/7 access to the most up to date asset information available, making overall plant safety strategy more agile and responsive.
Both operators and contractors need to reduce costs associated with routine inspection and maintenance, decreasing the number of bed spaces taken up by contractors performing tasks while making sure safety and downtime remain a primary focus.
This has led to some companies rethinking how these tasks are performed and how new technology can play a major part in the future of this industry. Numerous operators now have projects in place investigating how tablets and RFID tags, commonplace outside oil and gas, can lead to efficiency gains both while offshore performing inspections and in the back office where days can be tied up in archaic paperwork.
Automated systems provide inspectors with audit history, populate check sheets and ensure compliance, are becoming more common in the industry and where introduced have led to big improvements in operational efficiency.
The “We don’t have any money” myth
A common response when questioning potential customers on their ambitions to move forward with new technology is: “We don’t have any money”. But if the original system and technology are less efficient, they will also impose higher costs on the organisation.
For many, moving from a labour-intensive, paper-based system can be daunting. Set-up costs can be difficult to get past those who control the purse strings. What needs to be made clear here is the value/return on investment. In some cases, after deploying a solution, companies are seeing inspection and maintenance activities increase by up to 300% and a return on investment of about 400% within a year.
Implementing smarter software and the latest technology solutions not only reduce the time it takes for the front line worker to carry out daily tasks but also reduces paperwork, increases real-time accuracy, improves strategy planning and safety, and can lead to considerable savings.
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