One of the greatest challenges facing the oil and gas industry today is the need to effectively manage inventory, equipment and fixed assets in the field. With so many moving parts and materials spread out over large areas (or worldwide), often with limited connectivity, even minor bumps in supply chain processes can ripple downstream, creating delays and unexpected stoppages.
For an industry generating more than $80 trillion annually worldwide but hounded by financial pressures, any initiative capable of offering relief is worth considering.
In response to these challenges—and difficulties associated with expanding into far-flung frontiers—many oil and gas companies have responded by stockpiling assets, inventory and spare parts near remote sites to have materials readily on-hand. However, a recent white paper released by DHL points out that this methodology is “not sustainable, quickly eating into profit margins,” especially as supply chain margins continue to thin against growing costs and infrastructure needs.
If this is not a best practice, then what solution is a best practice for oil and gas?
The answer may lie in digital transformation: Using digitization and digital automation solutions to diminish cost leaks, increase the visibility of materials and drive down operating expenses.
One such digital technology is mobile barcoding, also known as mobile data collection. Using this technology, oil and gas companies can track inventory, fixed assets, spare parts, consumables, equipment and more in real time, all the time, throughout their supply chain.
Why Does Oil and Gas Need Mobile Barcoding?
Mobile barcoding can help the oil and gas sector mitigate the squeeze of rising supply chain costs.
The energy sector as a whole is currently “undergoing a seismic shift,” according to DHL. “This is requiring logistics executives to rethink traditional energy supply chain models and implement a highly integrated approach to drive down logistics costs and enhance profit margins.”
Crucial to such an integrated approach is investing in a technology solution that creates end-to-end inventory visibility but also fully integrates into your other business systems, such as by updating your ERP database as transactions occur. Using a combination of mobile devices and data collection software, your workers can also transact materials at point-of-scan, without having to risk data errors, delays in data entry, or having to rely on physical paper to track costly items.
The end result is very high data accuracy (99% or greater), faster process completion, greater worker productivity and lower operating costs. In short, mobile barcoding can help the oil and gas sector mitigate the squeeze of rising supply chain costs.
Mobile barcoding technology is a best practice for oil and gas because it cuts costs, drives performance and integrates with other digitization strategies.
How Mobile Barcoding Helps Oil and Gas Companies
As digitally transformative solutions become more common in all segments of the oil and gas industry, new windows of opportunity are opening for those seeking a competitive edge. Established companies are often sluggish at implementing technological innovations in favor of existing processes, even if these processes are costing the organization time and money.
A company more willing to adopt and fully embrace proven technologies can lower costs, increase efficiency, and build market share, potentially edging out the competition. A powerful mobile barcoding solution can also help enterprises in the oil and gas industry digitally evolve to be leaner and more efficient.
How does mobile barcoding technology accelerate efficiency in oil and gas?
To name a few examples, mobile barcoding:
- Minimizes costs and downtime associated with unplanned maintenance or parts shortages.
- Sheds excess or stockpiled inventory with real-time stock management and replenishment.
- Reduces overhead bloat associated with missing, aging and obsolescent parts and assets.
- Drives performance through gains in productivity, throughput and accurate forecasting.
- Tracks, assigns and transfers tools, equipment and fixed assets across multiple facilities.
- Controls materials in areas of limited connectivity, such as off-shore oil rigs.
- Integrates with and supports digital transformation and enterprise asset management (EAM) strategies.
Using Mobile Barcoding to Future-Proof Your Supply Chain
Experts from consulting agency Strategy& believe oil and gas companies should “double down on digitization.” Essential, proven “digitization” technologies like mobile barcoding can help you “future-proof” your supply chain in the long term.
Not only does mobile barcoding create real-time inventory and asset control, saving time and money, but it is also considered a best practice in the oil and gas industry. Demonstrating your company’s commitment to established best practices is a powerful selling point for your business as well as for public and governmental relations. Not only does your operation reap the financial benefits of transformative technology, but you also demonstrate an acute awareness for the level of organizational reliability so important in the energy sector.
Some of your would-be competitors may refuse to take inventory management seriously, either due to laziness or a belief that such an investment isn’t worth the cost of doing it. But in an industry growing more and more competitive by the day, the real question you need to ask yourself is, what is the cost of not doing it?