When $100,000 worth of equipment is on a client’s site, good inventory management is good business. When that inventory includes high-end remotely operated vehicles (ROV), the demand is yet more important. However, for international firm Oceaneering, an outdated inventory management tool was hitting the bottom line.
For over 60 years, Oceaneering has been a key supplier to the oil and gas sector; today, its engineering expertise has led to the business also providing services beyond the seas and into space, as well as for the entertainment sector. The Houston, Texas-headquartered business uses ROVs and engineering to provide services for sub-sea connections, wells, vessels, surveys, and pipeline repairs, among many others.
More often than not, the ROV operates between 3,000 and 4,000 meters below the surface of the sea in very harsh conditions. Oil wells at sea are buffeted by high winds and waves. As a result, the ROV fleet operated by Oceaneering is high-end machinery and uses a range of parts to complete an operation that is specialist and valuable. On an offshore project, Oceaneering sends out the ROV and an inventory of parts in a container that is in effect the work van for that project. This van holds all the parts for the engineering project and any engineer would recognise the racks, shelves and bins of parts. The cost of an ROV system is around $4 million and the inventory of parts can be an average of $3.7 million which goes offshore with each ROV.
This value, and a need to meet the high demands of the energy industry, placed an increased importance on inventory management for Oceaneering. Yet, a previous technology and process was leading to the company over-stocking to guarantee to its customers the quality of service they expect.
Director of Application Development at Oceaneering, Harikumar (Hari) Pillai says of the situation:
Previously, we had a hand-held device with a small screen. The user had to navigate eight different screens to perform an inventory task. So, over a period of time, adoption went down, and people went back to the basics of using paper to take notes.
When you look at offshore operations and the harsh environments that these engineers work in, wearing protective clothing, being away from their families, inventory management is not their primary job. They are there to perform the operation and need easy-to-navigate technology. So inventory management became a challenge, and we cannot afford not to have a part or perform an operation because it will cause downtime for the customer, and that is very expensive.
So as a business, we started over-stocking so as to not affect our customers, and that impacted the profitability of the project.
This became evident when the business carried out cycle counts, the inventory management process of counting small amounts of the inventory at specific times rather than counting the full stock of the business. Cycle counts were typically reverting to printed paper and manual counts, a tedious and error prone task. Oceaneering turned to its technology department for help. Pillai says:
The business realized the need to streamline this.
Pillai sought to engineer out all of the issues that led to poor inventory management in the first place. They worked with the offshore teams every time they were onshore to understand the environment for carrying out inventory processes. This included insights into the flight area where the ROV is operated from being separate from the Oceaneering container of equipment, and on a different connection. They looked at how a tablet device would best serve the engineers, as well as working offline as connectivity can be limited in harsh environments. He says:
We are depending on the customer for connectivity and it is usually wired connectivity.
When you work offline, there is the additional challenge of how do you authenticate the tablet as it can be left somewhere. So you have to add wrap-around authentication via a hardware key for the user. There’s a unique device assigned to all technicians working on these offshore projects and they carry it with them like their ID. They insert this key into the USB drive and the application/system authenticates them.
Having gathered all of this insight, Oceaneering analyzed what off-the-shelf inventory management applications were on the market, and realized that there was nothing that fitted their use case.
Build it differently
The unique demands of inventory management in a harsh environment led Oceaneering to self develop an application with its own development team. However, the development team was struggling to meet deadlines.
We were a professional code development team using C-sharp, Angular and Java Script, but we needed to deliver faster as the business was getting frustrated that IT was moving too slowly. So we changed our approach from Waterfall to Agile, which got some improvements but not enough to change the business perception, so we realized it was not just the process; it was a combination of the process and the technology platform.
That is when we decided we needed a Low Code platform that can integrate with our existing systems and allow us to rapidly innovate.
Having explored a range of Low Code platform providers, Oceaneering partnered with OutSystems; Pillai spoke to diginomica at the vendor’s Nextstep Experience event. A high priority for the digital leader was an easy ability to integrate with existing technologies used by Oceaneering. The Director of Application Development got his developers involved in the platform selection process.
Return on Inventory
Development of the inventory management application took just four months and is delivering business benefits, Pillai says:
The inventory access has improved drastically, and the cycle count has improved by 70%; that is a huge benefit.
Oceaneering has reduced overdue in-transit orders over 180 days, by 95%, he says:
We have improved the productivity and the user experience, and we serve the customer better by making sure there is no downtime.
This has internal benefits too, with the technology team now in demand by the Oceaneering business, Pillai says:
When we deliver on time, with good quality, they have a different mindset towards IT.
Oceaneering and Pillai are now undertaking a business-wide course of application modernisation to reduce technical debt and to meet the rising digital demands of their customers, he says:
We are increasingly looking to augment our physical solutions with digital services.
My Take
As organizations and service providers adopt new technologies, such as remote-operated vehicles, they will have to adopt and modernize their business processes and technologies to get the benefit of these innovations. While business processes such as inventory management may not carry much hype and excitement, as Pillai expresses clearly, they quickly impact the bottom line and require effective digitization.
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