In this interview series, Inventory Matters, we will be speaking with industry leaders to gain their insight into improving inventory management in the oil and gas vertical.
Interview #2 with Patrick Guicheney
Question: What is the best advice you have received in your career in the oilfield?
Answer: At the end of the day, People make all the difference. It is important to focus on training, developing, encouraging, developing the sense of responsibility in People if success is one’s goal.
Question: What do materials coordinators do well?
Answer: Generally speaking, I would say that they keep a good care of their physical local warehouse. But then also, the best materials coordinators are also much involved in the ordering process, expediting, teamwork with the shore base staff.
Question: What could materials coordinators do better?
Answer: Be more involved in the ordering process: setting min/max, challenging the rigs supervisors ordering too much or items that do not move. Restricting access to their warehouse (who would walk freely in a bank safe? When one manages a million-dollar inventory, better be strict on access control). Know better the position of their orders so that they can better answer supervisor’s questions and build this confidence rapport with them.
Question: What is the first thing you do when you step inside a warehouse on one of your rigs?
Answer: Meet the material coordinator. Ask him the value of the inventory (to see whether he is on top of it and to gauge the financial awareness an inventory represents). Do a walk around to quickly assess whether the warehouse is physically tidy.
Question: How important is inventory management offshore?
Answer: Very important. One issue though is that its importance is sometimes highlighted only when a CFO complains about it. A big challenge in offshore drilling is downtime and its costs to the Company. That concern (wrongly) pushes rigs supervisors to order too much inventory: just in case. Nobody wants to be blamed for not having a common spare part on board. And the cost of maintaining an inventory seems like a small issue when compared to the cost of downtime. But at the end of the day, experience shows that the rigs with the highest inventories are not the ones with the lowest downtime figures. Actually it sometimes the opposite as the inventory can also reflects on the rig management skills in general. And also downtime is rarely due to the lack of a part that should be in the warehouse (considering of course that they cannot be parts for everything onboard). So the key remains to find the right balance between having the right parts onboard and the financial burden of large inventories to a Company. This is where Materials Coordinators have a key role to play (see also comments on the next question).
Question: What training is needed most for the materials staff in our industry?
Answer: Before touching on training, I think a Company needs to decide what role they expect a Materials Coordinator (MC) to play for them. So that the training can be developed accordingly and others in the Company understand the role of the MC.For some they are still only storekeepers, giving parts when they are asked to do. An effective use of a MC is actually to manage an inventory offshore: question unnecessary orders, raise flags when parts need to be ordered, put a lot of efforts in min/max, etc.? But in order to do that effectively, it is important that the rigs supervisors treat the MC as a key player (if this is the message the Company passes) of the rig and not just a glorified, rubber stamping clerk.
Question: What technology should be utilized in your opinion to improve inventory management in the oil and gas industry?
Answer: Barcodes and chips should be generalized. That is the only way companies like Amazon can manage their orders. Also further, develop intelligence (including reliability based maintenance input) of computerized systems so that they can assist on ordering the right parts.
Question: What is the best oilfield story you have ever heard?
Answer: It would be instances where a rig crew achieves multi years without a Lost Time Incident. It always reflects on Teamwork and care for each other. And without surprise, they are often the rigs with lower downtime and … well managed inventory. Unfortunately, it strikes me over the years, that Companies seem to focus more on problems and problems rigs and not enough time is spent really understanding how the best rigs do it. I would guess, again, that People are the key on these best rigs.
Question: What is the worst situation you have seen related to inventory management in the oil and gas industry and how could it have been averted?
Answer: It would be a case where the part in store (with long delivery time) is the wrong size or type because nobody checked it when it was received. So not only downtime but also tough explanations to management and the Customer.
Takeaway #1: Companies must decide if they expect the materials staff to be inventory managers or just clerks who do as they are told. The true value comes from training, empowering and holding materials staff accountable for inventory results.
Takeaway #2: The key is to find a balance between dollars invested in inventory and having the right parts available when needed.
Takeaway #3: Barcoding and RFID are proven technologies that must be implemented in the oil and gas vertical to create an efficient and accurate inventory that supports the assets with the lowest capital investment.
What other issues do you see in the industry related to inventory management?
Read our other posts or contact us for more ways to improve inventory management at your company.
Interviewee: Patrick Guicheney
Rig Manager to Vice President of Global Operations
Schlumberger, Transocean and Shelf Drilling
30 Years of Experience