New wireless solution improves visibility, value, safety

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In war, logistics can mean the difference between life and death. In the commercial world, especially in upstream oil and gas, it also can mean the difference between profits and losses – and even company reputations.

At a time when oil demand is resuming but budgets are not growing, equipment is highly constrained, companies want efficiency gains, and system-wide safety is critical. The need for end-to-end visibility of upstream supply chain operations has increased. The bottom line these days is influenced heavily by the ability to get accurate real-time information when needed, anywhere and anytime.

Three risks
Lockheed Martin’s Savi Technology joined forces with partners KBR Wireless and Shipcom Wireless to identify three risks facing the upstream oil and gas industry that are being addressed with the Req-to-Rig solution:

1. Economic and operational risk. Items not arriving on time, items not found, and systematic failures to manage asset bases are costing major oil companies hundreds of millions of dollars each year. Hot-shotting is expensive, but opportunity cost of suspended operations and projects is even more expensive. Buffer inventory throughout the supply chain is not always enough. Reactive, rather than proactive, requisition processes with outdated and incomplete service records are not uncommon. Not always knowing the condition, maintenance, and usage history of assets and parts adds significant risk to operations.
2. Compliance risk. Compliance is necessary, but proving compliance – whether it is demonstrating chain of custody or fiscal accountability – is fundamental. The cost of regulatory compliance and government regulations can be high, whether in Brazil or Kazakhstan, but the costs of non-compliance can soar. Many regions of the world are imposing regulatory compliance rules on asset visibility, and penalties are possible if reports cannot be made on the whereabouts of supply chain assets.
3. Environmental and safety risk. Environmental and safety concerns resulting in ever-growing government oversight require oil and gas companies to ensure people are safe, materials are secure, and operational equipment is in working condition. Accidents are costly. Potentially disastrous errors occur every day in terms of knowing the condition and integrity of assets when they are needed and certifying, identifying, and locating personnel in high-risk operations.

What is missing in the current environment is extended and automated real-time visibility of assets, locations, conditions, and the status of working parts within a process or project.

“Not having the right tool at an offshore platform or oil rig can actually shut down the whole process for a day or two, costing tens of millions of dollars,” Dr. Ben Zoghi, an engineering professor at Texas A&M University and director of the Radio Frequency Identification (RFID) Oil and Gas Consortium, said recently. “RFID technology solutions can relieve new challenges faced in the petroleum industry by helping companies more effectively utilize assets at a time of high oil demand worldwide and constrained capacities as well as detect potential system failures and locate personnel in times of crisis.” Operational supply, risk management
A component of Req-to-Rig is the SmartChain solution. Proven successful in large and complex supply chains, SmartChain provides more than supply chain visibility by addressing the above risks with networked software powered by real-time information from RFID and other automatic identification and data collection (AIDC) wireless monitoring technologies. Recent advances in RFID and AIDC technologies, combined with advanced software that brings them together, are delivering new levels of value to the industry.

Req-to-Rig and SmartChain is a feature-rich solution set that turns real-time data into actionable information, enabling users to gain visibility, management controls, and analytics across the entire supply chain network. It is similar to a command and control center for upstream supply chain operations and can link locations and networks through its multi-enterprise wide capabilities.

One of SmartChain’s distinctions is its ability to automatically capture, aggregate, and transform identification, location, security, and condition data transmitted not only from RFID devices but also from other wireless technologies such as GPS, cellular, or SatCom, which are tagged to assets. Through the partnership, the Req-to-Rig solution is specially designed for the petroleum industry to spot smaller items affixed with passive RFID labels as well as larger assets tracked with active RFID or GPS. This provides “nested visibility,” through which both transport containers or vehicles and their contents can be located and their status known in real time, regardless of their location.

The data are captured by networks of either fixed or mobile wireless infrastructure that has been tested in some of the world’s harshest and most remote environments. While the hardware infrastructure is ruggedized for application almost anywhere, SmartChain is an agile, easy-to-use, and easy-to-implement platform and application suite that can tie together all types of information from various supply chain nodes and operations to provide the controller with a completely consolidated view of the supply chain. Real-world business cases
A number of leading companies that serve various aspects of the petrochemical industry already have begun taking advantage of a new state-of-the-art Req-to-Rig solution, which is both a network-wide software platform and an application that leverages real-time information from wireless identification and data transfer technologies.

For example, drilling contractor Ensco International wanted to replace its manual inventory processes with an automated system for its warehouses and fleet of 52 rigs, including six ultra-deepwater rigs under construction. Ensco had excessive spare parts and was wrestling with challenges managing inventory and preventive maintenance on spares. Its existing enterprise resource planning (ERP) software caused challenges because of its delayed data entry, exhaustive paperwork requirements, and the complexity of using the software for workers in the field.

By simplifying software user interfaces and work flows, leveraging data from barcodes and RFID, and extending its ERP system to the “edge” of the enterprise with agile supply chain execution software, Ensco now has a fully automated system that synchronizes inventory information in near real time among its warehouses and rigs. This integrated approach, which eliminates the white space between ERP and operational activities at the execution level, automatically collects and uses data end to end across operational areas. As a result, Ensco now is able to reduce and consolidate inventory while equipment is on the move to a new drilling location and has improved efficiency and the ability to find equipment when it is needed. “Ongoing communications and the ability to know where everything is allows us to work more offline now where it really counts,” Dave Pascoe, rig manager for Ensco International, said.

In another instance, FMC Technologies wanted to address with RFID such pain points as redundant inspections, job delays, and job cancellations due to non-compliant parts. By attaching RFID tags to oilfield parts such as pipes, valves, swivels, and other components connected to manifold trucks and pumps, FMC had a new means of automating the identification process and decreasing the time it took to process equipment into and out of the field.

Radio frequency identification (RFID) technology can create greater efficiencies and save money when used to track equipment for oil and gas operations. Combining this technology with user-friendly software helps operators reduce and consolidate inventory and to find equipment when it really is needed.

“The intent is to increase safety and efficiency while also realizing cost savings for our customers,” Adam Berg, FMC Technology’s engineering service manager, said. “FMC has developed a comprehensive business case behind the technology and its use within the hydraulic fracturing industry. This includes estimates of US $60 million in industry-wide savings per year. RFID technology provides our customers with substantial improvements in their ability to address and improve some common industry pains around parts inspections and identification. The ability of RFID to alleviate or eliminate these issues is key to our business case.”

The value proposition
In this era of the unpredictable, unexpected, and unplanned, it is mission-critical to have complete, real-time visibility of critical equipment and to monitor operations across the entire supply chain – from requisition to the rig. Req-to-Rig and SmartChain provide “ground truth” information from AIDC technologies, enabling users to make better and faster decisions and to take proactive rather than reactive actions.