The Infosys global supply chain management blog enables leaner supply chains through process and IT related interventions. Discuss the latest trends and solutions across the supply chain management landscape.

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July 30, 2012

Oil operators and Oil services firms - time to dissolve 'internal walls'

I recently came across an interesting write-up from consultancy firm, Arthur D Little, on how a few Oil majors have re-structured their E&P ops by combining three divisions - Projects, Technology and Procurement (PTP). Calling for the emergence of a new organizational form, the paper highlights how today's battles' - increasing size and complexity of oil projects with a majority of them going over budget and exceeding schedule targets; skills shortage; and resistance to new technology adoption - can be countered by dissolving a few internal walls. The challenges gripping the industry can be effectively tackled by "...integration of all relevant Projects (including Drilling), Technology (including R&D) and Procurement units into one single, integrated global division which is then tasked with the full burden of delivery".

 

  

Strengthening external supply chains no doubt yields high benefits but in the case of high-capex-projects based industries such as Oil and Gas, streamlining internal supply chain often holds the key to achieving on-time and within-budget project delivery. For the energy majors, reducing the time from discovery to delivery and commissioning is critical. And the way the firms are structured often decides the lead times in decisions, the number of hand-overs accompanied by the inevitable 'drop'; and the adverse possibilities of local optimum's resulting in global sub-optima. As the paper sums up "PTP organizations lead to a clearer accountability for on-plan project delivery because of greater ease in aligning relevant stakeholders"

 

To put things in perspective, we are talking here about the very first stage in the journey to supply chain nirvana i.e. supply chain integration (supply chain optimization and re-configuration are the next evolution phases). But having witnessed critical project implementations at some of these firms getting delayed due to internal misalignments, I have become a firm believer in going to the root i.e. an organization's design and its decision making culture. (see previous posts here & here).

 

In-fact, the need for dissolving walls is not restricted to just the Oil operators. The Oil services firms too need to introspect to figure out whether they are poised to deliver in the current situation, characterized by a period of increased bidding, mega projects in the reckoning, record backlogs in upwards of double digit billions and an acute shortage of resource skills. Their ability to bid effectively and to follow it up with a neat execution requires several departments/divisions to collaborate. Given that the quarterly margins boil down to effective collaboration, does anyone have a choice?  

July 18, 2012

Spicing up your supply chain recipe through robust Yard Management

Today, optimizing the warehouse yard does not appear to be of top priority on most CEOs' dashboards. Since Yard Management constitutes a relatively small portion of the overall expenses pie, it is easily overlooked by management. This is why a significantly high percentage of businesses today still rely on manual yard operations. However, poor Yard Management can have a direct impact on warehouse operations in the form of lost trailers, lost SKUs and loss of critical labor productivity - especially in volume intensive businesses.

On the other hand, the smaller chunk of  a growing number of businesses realize the importance of having a strong Yard Management program and continuously invent and innovate in this area of supply chain, resulting in:
a) Improvements in processes beyond the four walls of a warehouse thereby benefiting the warehouse directly.
b) Maturity of processes within the Yard Management practice resulting in a transition to completely automated processes requiring minimal human intervention.
c) Ability of organizations to direct resources to more critical/core functions of supply chain execution.

Using technology as the catalyst in the overall transformation process, industries have been able to achieve operational excellence by automating the following areas:

Self help for Carriers: With basic internet connectivity, carriers can integrate into shipper systems and gain insight into available time slots for appointments of a shipper's yard. Further, they can request/schedule appointments on their own and have shipper's system automatically capture their requests. This can help carriers better plan their trips and also avoid waiting at a shipper's yard. On the other hand, shippers no longer have to manually fix appointments and also can avoid paying huge detention and demurrage charges for holding back carrier's assets.

Seamless Check-In and Check-Out processes: With appointments scheduled much before their arrival, during check-in, carriers can simply furnish their identity, and quickly be guided to either a dock door or a yard slot depending on service level agreements. More sophisticated systems have GPS systems installed on trucks and GPS device sensors spread across key points within the warehouse yard. Within moments of arrival, the details can be automatically fed to the Yard Management system and the truck routed to the appropriate location without human intervention.

Automatic updates to drivers/carriers: With capabilities such as sending messages to drivers' beepers or notifying drivers of moving trailers either from dock door to yard slot on GPS systems, a Yard Management System can also keep carriers well informed of the status of their trucks/containers.

Integration with WMS:  Activities within and outside the dock can be synchronized. When a trailer is positioned at a dock door, warehouse personnel are intimated to start loading or unloading, which facilitates throughput. Similarly, when a trailer is done loading or unloading, the system can notify yard jockeys to pick and move the trailers, or alert drivers to directly check out. Another advantage of Yard Management and WMS integration is the virtual extension of warehouse visibility to include yard inventory.

Real-time visibility into trailers and drivers:  Organizations will no longer need to worry about lost trailers and drivers within their yard.  Yard operations with real-time visibility are more efficient than yard operations without real-time visibility. With visibility into trailers and their contents, chances of unfilled orders due to idle inventory in the yard are reduced. This also enables companies to reduce the number of tractors and trailers leased for storage.

Alert mechanisms: Using alerting techniques, shippers can be intimated about aging trailers and containers in their yard and also about real time detention charges accruing. More sophisticated systems are even able to read information from sensors fit on containers to capture temperature, pressure variations and fuel levels enabling shippers to take appropriate decisions.

With these kinds of benefits comes the flexibility to reprioritize, create custom loads, fine-tune the flow in a yard and avoid tie-ups. Yard Management has thus become a critical component for companies focused on optimizing their supply chains. Today's Yard Management systems bridge that critical gap between internal and external warehouse operations, turning a yard into a logistics accelerator and optimizer rather than a weak link in the supply chain.

July 3, 2012

'Asset' in Enterprise Asset Management

"Evolution comes from within", a life comes into existence when an egg develops completely from within and breaks the shell. The evolution of Enterprise Asset Management (EAM) over the years can be compared to a similar development, time and again breaking the ever growing shell of EAM requirements. We spoke with Rohit Choubey, Lead Consultant - ECS EAM and Rejeesh Gopalan, Consultant - ECS EAM to get their views on significance of Asset definition in EAM and how it can contribute to the emergence. In this blog, with the example of Asset Management for personal health, they emphasize on identifying avenues for adding more Asset definitions to the EAM purview.

Rohit Choubey

An Enterprise Asset Management (EAM) framework is predominantly based on the definition of 'Asset'.  The 90s and early 2000 witnessed a transition of EAM from a mere package dedicated to a Production class of Assets to wider portfolio including IT Assets, Transport Vehicles, Pipelines, Roads, Landscapes (yes, you have read correctly 'landscapes') etc. So much was the impetus that more and more Assets got included under the purview of Enterprise Asset Management and supported by the respective best of breed industry processes.
Last week, during a discussion with Praveen Agrawal, our Principal Consultant in EAM Practice - Infosys, on the scope of sustainability in Asset Management, we came across an interesting  topic "Socio-Asset Management" that can further expand the definition of an 'Asset'. I shall name it Personal Profile Manager (PPM); a tools which keeps a tab on your day to day activities, keeps you up and running and ensure that your downtime is less. You do regular exercise to ensure frequency of your breakdown can be reduced or you take your kid for scheduled vaccinations - Preventive Maintenance. You visit doctor when you get an indication that something is going wrong with you - Predictive Maintenance. If you are late in visiting doctor and fall sick, it becomes Breakdown Maintenance.  You maintain a stable diet - Reliability Centric Maintenance and the list goes on. I agree this might sound a bit generic but just imagine the potential benefits it can bring by having the listed functionalities addresses by an intelligent program telling you what to do and when. An application, similar to the MS Office on your personal computer, which can record your master data and report your actuals and then the  personal Health Management tool providing the intelligence on your health ... what do you think?
Every time we go about redefining the 'asset definition', a new dimension gets added to the EAM framework. Recently Praveen forwarded us an article on usage of Maximo for tracking Animals as Assets (http://www.ibm.com/smarterplanet/us/en/leadership/mafri/) - a totally new dimension of Maximo isn't?  So start tickling your minds and identify avenues for redefining 'asset'- can it be water, air or ... ? Please share your thoughts.

Rejeesh Gopalan

Liked the way in which Rohit drew a parallel to relate the EAM concepts with the Personal Profile Management. The advent of Service Oriented Architecture (SOA) paved a way for business functions and related software services to operate in a plug and play model.  The health management systems which Rohit is referring to, can be one such service which can draw information from an application on our computer for recording data like lipids profile, BP, blood sugar level etc. The information can then be integrated to principal health management systems or may be "Ask a Doctor Forum" which can derive meaningful conclusion out of it.
With mechanisms like downloading a e- prescriptions or a link to health videos demonstrating a health condition related exercise , one can effectively deal with issues like sky rocketing medical costs, problems associated to appointment and being present in person for a doctor checkup. A punch-out mechanism for buying medicines/equipment's from a custom - catalogue which again is based on personal profile, can further do the value addition. The asset definition, which in the context of PPM (Personal Profile Manager) is myself, can be extended further to increase the horizon of Asset Management. Just like how a comprehensive asset management addresses the maintenance requirement of operational Assets of today, It sure is capable of spreading its wings to an extent of our imagination. So as Rohit said- start tickling your minds, we have a long way ahead! Passing on the baton ...

About the Authors

Rohit Choubey is working in Asset Management domain for more than a decade now. He has handled multiple assignments in Business Process Management, EAM package implementations and Asset Management consultancy across multiple verticals. Recently, as a Lead Consultant, he led a team of consultants in one of the largest implementations of Maximo in the world.

Rejeesh Gopalan has worked extensively in package consulting around the Maximo Asset Management Software, with a clear focus on energy companies and utilities during his more than nine years with Infosys. As a Consultant, Rejeesh is responsible for providing leadership in multiple projects based on Maximo Asset Management Software, involving end-to-end implementation, upgrades and application support. He is a regular blogger of Infosys Supply Chain Management and blogs on Asset Management as well as Business Process Optimization Programs.

 

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