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Inventory Matters: Interview With Patrick Guicheney

People make all the difference…

People, Inventory Barcoding and Processes

Introduction

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

Interview Body

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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).
  6. 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.
  1. 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.
  1. 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.
  1. 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.

Interview Takeaways

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. 

Inv_Cash_Scale

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. 

 

 

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Inventory Matters: Interview With Matthew Heaviside- Importance of Oil & Gas Inventory Management

Supply Chain nourishes the organization…

Oil and Gas Inventory Management

Introduction (Oil and Gas Inventory Management)

It is imperative that drilling contractors ensure that inventory management at their facilities is operating effectively. With the few contracts that are available, it would be devastating to lose one due to an inventory management issue that might have easily been averted. In this interview series, Inventory Matters,  we will be speaking with industry leaders to gain their insight into improving oil & gas inventory management. 

Interview #1 with Matthew Heaviside

Interview Body

  1. Question: What is the best advice you have received in your career in the oilfield?
    • Answer: Look and see.  Hear and listen.  Speak with humility.  Spend time with the man sweeping the floors and ask him what he thinks.  The best ideas usually come from the most unexpected places.  Keep your ego in-check—it drives many of the world’s problems today.  Understand that you are not separate but part of a greater organizational ecosystem.  Lastly, don’t be surprised when a company behaves like a company.
  2. Question: What do materials coordinators do well?
    • Answer: I have very rarely met a materials coordinator who did not give 100% and I have never met one who felt that his/her 100% was sufficient.  They nearly always are in need of support of some type—training, tools, and streamlined processes.
  3. Question: What could materials coordinators do better?
    • Answer: Better understand the equipment, its functionality, and level of criticality.  Planning and follow-up.
  4. Question: What is the first thing you do when you step inside a warehouse on one of your rigs?
    • Answer Part 1: People First: Look the warehouseman in the eyes and get a feel for how his ship is running.  Speak with him and get him to level with me on how things are.  I always ask, “Is there anything I can do to support you or is there anything you need to drive improvement?”
    • Answer Part 2: Equipment & Facilities Second: Look at preservation, housekeeping, and organization.  Clean surfaces, proper preservation, tidy shelves, and organized paperwork are all indicators of the overall level of health in a warehouse.  I will usually follow-up with some cycle count spot checks.  Another important indicator is the consumables and equipment the warehouseman needs to do his or her job properly.  This includes everything from labels to IT/IS Systems.
  5. Question: How important is oil & gas inventory management offshore?
    • Answer: Oil and Gas Inventory management is a critical component of any successful organization.  As the old adage goes, “an army marches on its stomach.”  Supply chain nourishes the organization.  It may not feed the men but it feeds the assets and promotes wellness within the company if it is functioning properly.
  6. Question: What training is needed most for the materials staff in our industry?
    • Answer: Four primary areas for development
      1. Equipment Familiarization and Functionality.
      2. IT/IS Skills.  This includes everything from Microsoft Excel to ERP Systems such as SAP, Oracle, PeopleSoft, etc.
      3. Planning, tactical decision making and ownership.  Materials staff will benefit the organization at a higher level with enhanced ability to understand the full cycle of the business.  For example, understanding the criticality of a part, choosing the right vendor based requirements beyond cost (schedule, quality, other business constraints), and following the transaction through to delivery and acceptance from the internal customer (Operations and/or Projects) is essential.  We need to evolve from transactional to customer relationships.
      4. Project Management Skills.  A good buyer and warehouseman on a project is hard to come by and essential to the success of any project.  They need to understand basic project management methodology and understand how their contribution affects the project ecosystem.
  1. Question: What technology should be utilized in your opinion to improve inventory management in the oil and gas industry?
    • Answer: I am a huge proponent of Information Technology and Information Systems.  Recent decades have seen monumental strides in technology.  Unfortunately, the opportunity hasn’t been fully realized within the industry for a variety of reasons.  Advances in inventory management systems, RFID, automation, and big data are a major opportunity.  I am most excited about continuing integration between historically disparate functions and the benefit of data analysis.  For example, condition based maintenance data coupled with computational horsepower and integrated with a robust and advanced supply chain system could be a supreme differentiator.
  1. Question: What is the best oilfield story you have ever heard?
    • Answer: The worker who arrives safe, goes home safe, and retires healthy.
  1. 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: Too many to count.  Anytime someone is harmed is the most heartbreaking.  Purely from a business standpoint, in most cases it comes down to ownership, planning, visibility, and follow-up.  Once we get to accountability, it’s too late.  Nearly all failures can be attributed to people, processes, and tools.  In most cases it is the company itself that requires positive change to promote excellence and not any single person who has dropped the ball.  When I say people, this includes providing proper training to the employee and clear expectations, as well as holding them accountable for performance.

 

Interview Takeaways- Oil & Gas Inventory Management

Takeaway #1:Materials staff  are in the field trying their best to do their jobs as effectively as possible but they don’t feel it is sufficient which we see at customers as well around the globe. Oil & gas inventory management is typically overlooked and not considered an important cog in the wheel. If companies would invest in these areas of the business it could pay off greatly in increased up times of rig and reduced costs. The capital required to make these changes is minimal compared to the revenue savings that could be gained. 

Takeaway #2: Rig management should spend time on all rig visits with warehouse/materials staff to ensure effective inventory management is in place and to show the staff the importance that management places on inventory. This should include spot checking the inventory, inspecting housekeeping, and ensuring they can operate the ERP system. 

Takeaway #3: Most downtime issues that are related to inventory stem from a lack of ownership, planning, visibility and follow-up. Preventing these issues is not easy but with the correct planning, reporting, training and procedures they can be alleviated before they cost your company. 

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. 

 

 

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