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Sharing supplier data by Sharecat

Thursday, May 15, 2014

Supplier data is easier to manage if it is shared, says ShareCat - enter the data once and everybody's systems can be updated

One oil and gas company had a project which needed 500 motors from ABB, put together in 50 different vendor packages, such as cranes and elevators.

The oil company signed a 'frame agreement' with ABB to buy the motors, but then asked for data sheets about operating them from each of its 50 vendors delivering the packages.

This meant that the oil company ended up with 50 different material sheets for the same type of motor.

It would have been so much easier if they had used a shared supplier information management system like ShareCat - where the information would have just been uploaded once by ABB and all of the package vendors could access it, said Yngve Nilsen, regional director UK and Australia with ShareCat, speaking at the Nov 28 Digital Energy Journal conference in Aberdeen, 'Supply chain management - reducing complexity.'

ShareCat helps manage shared information about suppliers and materials, and also manages catalogues on behalf of oil companies, showing what their employees can buy and from which supplier.

It works with oil and gas operators, EPCs (engineering / procurement contractors) and drilling companies.

It has a global agreement with an one oil major l to manage its supplier catalogue, which is currently in implementation phase. 'That's a huge contract for a company like us,' said Yngve Nilsen - Regional Director UK and Australia ShareCat, speaking at the Nov 28 Digital Energy Journal conference in Aberdeen, 'Supply chain management - reducing complexity.'

It has a global agreement with another oil major to put together a supplier catalogue, and a central information store to handle equipment information. It has a global agreement with Statoil to do global material management, and an alliance with Worley Parsons to use ShareCat as its 'working methodology'.

In Norway, it manages a shared supplier information service called EqHub, which is operated by the E&P Information Management Association (EPIM) of Stavanger. 14 oil and gas companies and EPCs are use it to work with 80 suppliers.

Mr Nilsen would like to help set up a similar service in the UK. ShareCat would like to make Aberdeen its largest office. There are 20 employees in Aberdeen.

The head office is in Bergen (Norway), and it also has offices in London, Perth, Houston and Odda (Norway) as well as Aberdeen.

The company is recruiting. 'We have a desperate need of people,' he said.

How it works

ShareCat's 'shared catalogue' can contain all kinds of supplier and materials data, which can be made directly available to the buyer's procurement systems.

This means that if there is any update to the information, the vendor only needs to update the entry in ShareCat and everyone's systems are updated. 'We think this is very smart way of handling the information,' Mr Nilsen says.

A by-product is that the purchasing company's system is much more standardised, because people can find the information they need in it, they are less likely to look elsewhere.

Mr Nielsen stressed that ShareCat is not designed to replace ERP software like SAP, but to help manage the information in it. 'It is correct information, validated, delivered by the supplier itself, into a specific structure,' he said.

Purchasing problems

On a typical material master (a document with descriptions of materials a company procures, produces and stores), 50 per cent of the information is missing or unstructured, so 'you can't use it basically,' Mr Nilsen said.

This means that people can't find the information about what their company needs and the purchasing takes a lot longer.

On the purchasing system, typically 25 per cent of materials are duplicated, which means that you might already have the item in stock but don't know about it.

Typically 'you also see thousands of materials purchased outside the system or their regulatory routines,' he said. This can lead to an influence on safety, or violation of safety rules.

The main reason these problems arise is 'lack of structure,' he said. Companies sometimes have competing structures, or different systems merged together.

Many companies have unclear procedures, with people just doing what they have always done.

Often there is too much focus on the IT system itself, rather than the information in it. 'It doesn't matter what the system is called as long as you can find the information,' he said. 'Google is a good system because you find what you are searching for.'

Often oil and gas purchases are made by experienced people who know exactly what they need, but when they retire and younger people take over their jobs, the first thing they do is look for the information in the system, and it's not there.

There is often a gap understanding between project managers, construction and operations staff. 'The project staff don't understand the operations people's needs,' he said. 'They just want to get it completed, then they move to a new project. It is missing information and so on.

'The result is that millions of pounds are spent on buying stuff that they already have in stock,' he said. 'You go into the system and say, I'm not sure if it's this one or this one, but I'll just buy a new one to be sure. I guess it's a good thing that there's a lot of money in oil industry.'

A lot of people say they 'are so fed up with SAP and Maximo because they can't find the information they are looking for,' he said. 'We are dependent on manual processes - the old engineer, who knows his pump, he can do his job very well.'

A newbuild rig can include around 40,000 spare parts, with 30,000 unique materials. 'All of that needs to be added to the system,' he said.

Watch Yngve Nilsen's talk on video at http://www.digitalenergyjournal.com/video/972.aspx



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