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What advice would you offer to manufacturers who wish to expand without sacrificing the overall control of daily operations?
The oil and gas industry is continually growing and manufacturers within it have to deal with that pressure. The correct systems foundation and business processes must be entrenched right from the start. Without them, embarking on rapid expansion, either geographically or product-wise is destined to fail.
You want to have low risk, low cost, predictable processes when you expand, especially into a new geography. You don’t want to arrive with systems you can’t implement, so having a dependable, pre-existing system with the right process, enables you to simply roll out those standardised processes anywhere and anytime you choose.
What are the benefits of integrating procurement, engineering, manufacturing and installation?
Typically the landscape of oil and gas manufacturers is comprised of various different systems, with little integration between processes making information difficult to obtain. The processes themselves aren’t well designed, projects aren’t integrated into the business objectives and generally the whole set-up is antiquated and reliant on considerable manual input.
The majority of manufacturers in this industry are project-centric, that means the project should be driving everything, the project should be the glue that joins all of these different processes together. The benefit of integrating every aspect of your processes is that you aren’t concentrating solely on manufacturing or engineering, but on the project as a whole.
What are the advantages of project lifecycle management?
Project lifecycle management is the ability to manage project and asset life cycles from an integrated approach. Previously the project plan has sat outside ERP/MRP systems, so you can’t achieve a suitable level of integration between the various dependencies of the project.
Traditional ERP/MRP systems are designed for repetitive manufacturing, not for bespoke project management and that’s what the majority of industry manufacturers are using, so IFS has become a specialist in providing a unique, scalable approach.
Our project plans drive everything, allowing users to deliver projects more reliably, improve their reputation for on-time delivery, promote less shortages and obsolescence, improve efficiencies, reduce overtime, and create more predictable projects.
With quality and Health & Safety regulations becoming ever more stringent, how do you suggest manufacturers improve their current provision?
H&S is crucial, especially in oil and gas because of the inherent risks associated with the working environment. Regulations are being passed down to the manufacturing companies who supply the components, putting them under pressure to prove that they have the right H&S processes in place and importantly, have the right systems in place to manage corrective actions.
Managing quality, H&S, risk audits and all of the associated procedures is extremely important, and we offer add-on modules in H&S, risk management and performance management to build a more effective and efficient core solution. We engage with H&S organisations to better assist companies to manage not only manufacturing and project processes, but also offer H&S solutions to better drive corrective actions as part of an integrated business process.
There is a current focus on after-sales services, i.e. supplying spares or performing regular maintenance; how do you see this trend growing?
Companies are shifting from seeing themselves as solely manufacturers to complete solution providers. Often the oil and gas clients are doing the maintenance and spares management themselves, or through a third party organisation; I would argue that the manufacturing company is in the best position to offer these services.
The benefit is you have a robust service revenue helping to smooth out inconsistent project revenue, plus service work generally tends to more profitable. The market is still perhaps immature in terms of what manufacturers have achieved, with many just concentrating on spares, service contracts or repairs. Manufacturers have even moved into the hire and rental market because clients don’t want to buy the equipment outright; they just want to have it available as and when required.
What benefits arise from integrating ‘concurrent engineering’ into the design stage?
Design usually falls into two camps, either pure R&D, developing prototypes and one-offs, or designing a solution to a customer’s specification, which is more common.
Integrating ERP with design tools such as 3D modelling and CAD systems is crucial because the technical drawings and part-numbers won’t need to be re-entered manually, creating a far more efficient process with fewer mistakes.
Concurrent engineering is absolutely vital in project-centric businesses. When you start a project, the design hasn’t been finalised, you only know part of it; yet you need to start the procurement and manufacturing process early because of long lead times. You need to be able to design things while you’re buying and manufacturing parts concurrently, and traditional MRP systems don’t like that.
IFS supports what’s called an ‘evolving bill of materials’, which allows design gates as the product evolves to release information as it becomes available to get the next stage rolling promptly.
What do you see as the most important trend currently driving the industry forward?
Mobility is a very hot topic currently, and becomes even more important when expanding into after-sales, where you may find yourself supporting engineers out in the field via mobile devices to accomplish repairs and preventative maintenance, for example.
Another shift we are increasingly seeing is a rise in the use of RFID, especially on the asset management side which has advantages over traditional bar-coding techniques.
Speaking with manufacturers, you begin to appreciate that to some extent how far ahead the technology is. Many of them are still doing things using methods arguably 30 years out of date; for example one manufacturer I visited recently doesn’t use part numbers, which is incredible when you consider the complexity of the bespoke products they produce.
In the aerospace and defence industries they use the term ‘power-by-the-hour’ because I think they are probably ahead of the oil and gas industry in terms of embracing the need to provide total service solutions through the life support of the asset.
Ultimately, having one integrated lifecycle solution allows you to grow your company in a controlled way, offering you the firm foundation and right processes to expand upon. The adaptable offerings IFS provides offers the ability to be agile, making our clients more competitive, responsive, productive and efficient, coupled with improved quality, improved customer service, reduced costs and increased revenue.
About IFS Applications:
IFS Applications provide flexible manufacturing solutions across a variety of sectors including defence, pharmaceuticals, automotive and construction. Specifically within the oil and gas industry, its clients are typically either OEMs or individual component fabricators.
Specialising in project-based manufacturing rather than the discrete manufacturing, IFS cover every corner of the global, with half its 3,000+ customers involved in manufacturing of some form or another. The size of customer varies from those turning over £20-30 million through to those turning over billions, including a variety of mid-tier and tier-one companies within the industry.