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Inventory Criticality – What Are Your Critical Spares?

Truly Critical?


Figure - Example of Shaffer Style Annular


It was early Saturday morning when Joe got the call from the rig telling him the upper annular had failed a pressure test and that they would need to disassemble it to see what the problem was.  Joe quickly called his boss Tom, the Director of Operations and explained what the current status was and then also gave John, the Subsea Support Manager, in town a call to alert him of the problem since the rig had been performing in-between well maintenance.  As Joe knew, there are only a certain amount hours allotted for in-between well time, and this would be on the critical path for the Client. He needed to find a solution quickly as not to incur any downtime.

Hours later, Joe got the call that after disassembly and inspection it was discovered that there was severe scoring on the annular piston and that it could not be repaired onboard the rig.  He asks the OIM if there was one onboard the rig, the OIM told him he would have to call the Materials Coordinator and check.  The OIM called Joe back a few minutes later and said that they didn’t have one onboard in inventory but he believed there was one overhauled on one of their other rigs in the same region.  Joe’s next step was to gain approval to transfer the piston to his rig so they could repair this and not incur any more downtime while waiting to get the Annular back together and tested.  Joe called everyone back and let them know of the situation.  Upon doing this though he found out that the overhauled annular piston had actually been installed a few weeks prior but there might be a new one in the Corporate Inventory in town….

This type of situation happens all too often offshore. Someone thinks they have the critical spare in inventory, but upon further inspection and investigation, it is found that it is either inaccurate or has already been used and not recorded correctly in the Inventory System.  These critical spares are crucial to ensure there is no downtime onboard the rig and thus ensuring the Client stays happy. 

How do you know if you have the right critical spares tagged in the Inventory System and that they are available when you need them?   Most critical items have either been flagged from experience or through recommendations from the OEM (Original Equipment Manufacturer).  By setting up criticality codes and business rules, one can confirm that all spares are properly tagged in the system.  This exercise usually requires collaboration between the Maintenance and Supply Chain Departments to confirm all aspects of the Business are taken into account. Once these have been tagged in the system, the next step is confirming they are properly managed and maintained in the Inventory System so that they are available to use when ready.
Elements to consider when creating criticality for each stock item:

  1. Application – where is it used and fitted – is the equipment considered critical but perhaps not all the items linked to the asset aren’t? - Hierarchy of the item compared to the piece of equipment it is used for and what operation it is used for; like drilling or station keeping. 
  2. The impact of Failure - Safety, Environmental, and Financial consequences of failure - this is usually done through a matrix that is specific to the Company or Industry. 
  3. Practical “real world” considerations or “workarounds” – is there something that can be used instead of the actual part itself or perhaps a justified risk assessed approach with approved temporary change.
  4. Supplier or Original Equipment Manufacturer - as often is the case an OEM will take a typical part and give it a specific part number but usually, is supplied from another vendor.  Also the lead-time for a particular part might be quite long or subject to market fluctuations.
  5. Price – How expensive is the stock item?  Can you keep one for multiple facilities (rigs, sites, etc.)
  6. Other factors and Business Rules – Processes and policies which are specific to your organization that needs to be considered.

Once you can determine criticality for each item, this will help you make decisions about storage (for example keeping it locally to mitigate failure) as well as stock levels (Min/Max) and other very important business decisions.  Criticality is the basis for making these consistent business rules across the company that everyone has agreed upon instead of relying on one individual’s experience to make the call.  Going forward remember the following when it comes to Item Criticality: 

  • Companies need to understand what is truly critical: will it harm your revenue stream, endanger people or the environment if the item is not in stock
  • A simple approach to classifying criticality will most likely lead to wasting money - for example if you only have just a "yes" or "no" delineation for criticality than more than likely everything will be classified as critical.
  • A methodical approach will provide consistent and optimal results - using analytical software (Oniqua) to apply business rules to all your inventory items consistently and sustainably for the future with the changing climate in the market. 
  • Criticality based decisions require information and collaboration from both supply as well as demand - Maintenance, Engineering, and Operations need to work together with Supply Chain to make smart decisions when it comes to Critical Inventory. 

To learn more about Item Criticality please click the link below.

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