Recently, McKinsey & Company – a global consultation firm of 14 000 individual researchers and consultants – released an article titled “Reimagining supply-chain collaboration in a low-oil-price environment”. Inside, the author proposes the inclusion of equipment manufacturers in the design process of new projects for the oil and gas industry. Through their research, the firm determined that over a five year period, the industry as a whole could save between $90 and $240 billion dollars in expenses associated with the current inefficiency in the design and build process. At Great Northern Bridgeworks, we see a parallel here. Our work often has us building bridges designed by engineers outside of Great Northern Bridgeworks, whereas the efficiency of bringing in Great Northern Bridgeworks to aid in the design and consultation process would save large amounts of capital that is otherwise lost in the inefficient transferring of designs and plans. With our foresight, and some advance notice on the part of our clients, Great Northern Bridgeworks ensures that quality, safety, precision, and budget are all present in our finished products.
In the oil and gas industry, the complexity of regulations and formal specifications have grown substantially in recent years. Due to the ongoing expansion of resource collection facilities, the capital required for the initial setup has exceeded prior expectations time and time again. The incorporation of suppliers, and the supply-chain as a whole, into the process of planning will reduce the necessary capital required for future oil and gas projects. Along with the benefit of expedited equipment manufacturing and installations, the standardization of specifications and regulations will produce a wealth of data on the reliability, safety, and expected operation of equipment, with data being applicable to more equipment than ever before.
Changes in the Oil and Gas Industry of Canada
As it stands now, the rapid growth of the oil and gas industry has created a complex and convoluted process for equipment manufacturers to decipher. In McKinsey & Company’s research on the subject, they found in their work alongside 40 oil and gas companies that there was some $90 to $240 billion dollars to be saved on the purchase of commonly used exploration and production equipment. Beyond cost savings, this would also reduce the time spent on project execution by an estimated 20 to 40 percent.
This isn’t the first time an industry has brought in the suppliers to assist in standardization. For semiconductors, manufacturers created an organization (SEMI) which marked the beginning of standard two-inch wafers of silicon. Now, SEMI still mandates standards around wafer specifications, health, safety, and more. The standardization allowed buyers to focus on their work instead of spending valuable man hours creating a product that met with company standards – industry wide standards facilitated the growth of the computer industry.
Building Bridges Between Manufacturers and Producers
McKinsey & Company believes the primary objective should “not be to standardize at the level of the most stringent requirements, but to identify equipment that can be made commonly and find common ground on requirements that can satisfy all companies, optimizing for cost, schedule, and risk”. Further, they think that “individual oil companies can then tailor specifications for more extreme or unique requirements.” This means that the necessities of a particular company should still come first, but the equipment that is already consistent across the industry would stand to benefit most from supply-chain collaboration.
When critical structures are needed for a new oil and gas project, bring in the professionals at Great Northern Bridgeworks to build the structures, provide the services and bring in the equipment that you need to be on time and on budget!