Oil Company eliminates Free Text orders and saves millions

Overview

Company is the largest drilling rig contractor in Canada, with operations spanning across Canada, USA, Saudi Arabia, and Kuwait.

Company aimed to transform its asset management processes and procedures to align with industry best practices.  To do so, they needed to revamp their master data by building Bills of Materials (BOMs), and creating standardized and scalable processes.

After two unsuccessful years of creating BOMs within SAP, Company went back to the drawing board and adopted AIC as the home for their BOMs.  Aided by Metanoia’s services, which build BOMs from OEM parts catalogs, they were armed with Interactive BOMs for their international division within 6 months of implementation.

This transformation saved Company $6.8 Million dollars (in Saudi Arabia and Kuwait alone), by providing the company with accurate master data for inventory, increased use of the material master, and elimination of Free-Text altogether.

Before AIC

It was difficult, even impossible, for Company to extract meaningful insights from their master data.  Users were simply unable to identify the correct parts and materials from SAP’s Material Master: SAP provided no visual reference, descriptions alone weren’t enough to correctly identify materials, and there was no system to identify interchangeable parts.  This forced users to requisition parts and materials within SAP Work Orders using Free-Text.

The constant use of Free-Text to order parts created entropy within their master data; the once succinct Material Master became more of a spaghetti mess with each requisition.  This resulted in overstocked inventory, errors and delays during the ordering process, and a lack of accurate insight into assets’ Material Master groups.

To combat the deterioration of master data, Company implemented a data enrichment initiative to build and manage BOMs within SAP.  They soon found, however, that SAP (and other CMMS systems) are not purpose-built for asset information management.  Things like; creating Material IDs, aligning HERS records (interchangeable parts), managing supersessions, and building equipment hierarchies are all arduous tasks within the CMMS.  After two years of diverting expensive SMEs from other projects to build BOMs, they were no closer to their goal and looked to Metanoia for help.

After AIC

Company needed a better system to manage BOMs, and also required help with the leg-work of building the BOMs themselves.  So, they looked to Metanoia, who provides a turnkey solution to build and deploy fully Interactive BOMs.  The solution is powered by Asset Information Center (AIC), an interactive parts system, and Metanoia’s world class BOM creation services.

Metanoia received thousands of OEM parts books from the customer which were used to build Bills of Materials.  These foundational BOMs, when matched with the Material Master from SAP, create Interactive BOMs which feature real-time information from SAP, such as: stock on hand,  HERS records for interchangeable parts, and warehousing information.

AIC was pivotal to Company, as it created scalable processes to intelligently manage their asset information.  The easy to use system, when paired with Interactive BOMs, let Company look at each piece of inventory to justify its purpose and which assets it supports.  It also helped them link all HERS records to interchangeable materials, which highlighted some massively overstocked items that were removed to reduce inventory costs.  Additionally, planners and technicians were mandated to submit parts to work orders through AIC, which was easy to do with AIC’s visual interface, which resulted in the complete eradication of Free-Text orders.

Results

Metanoia’s services kicked off the data enrichment initiative by building BOMs, and the software provided Company with an intuitive system to further cleanse the master data.  Together, these created standardized and scalable processes to avoid any ongoing entropy of master data.

All in all, the solution:

• Saved Company $6.8 Million dollars in their international division, within just 6 months of implementation!
• Increased confidence in components added to work orders.
• Significantly increased the usage of Material Master.
• Eradicated the use of Free-Text within International Operations.