Logistics & Operations
Executive Summary
As a operations manager of Abbot Group, an international Oil & Gas company operations manager highlights three digital technologies presently utilized in the refinery or oil & gas industry and the extent to which these technologies improve organization’s general profitability is also highlighted. Cloud-based Enterprise Resource Planning system enhance organization’s ways of planning as well as coordinating its service and product supply chain widen across several productions as well as distribution facilities along with countries. The contrast between logistical as well as operational challenges organization faces is also discussed in this report. Finally, four human behavioural challenges or issues organization face is discussed.
Contents
Introduction 4
Part 1 4
Part 2 8
Part 3 9
Part 4 10
Recommendations 12
Conclusion 12
References 14
Introduction
Digital basics are changing corporate functions as well as finance, supply chain, HR, marketing, and procurement. Information Technology is embracing for high speed and low cost. The finance departments value IT or digital technologies to find hidden resources, and there is an HR department used digital technologies for recruitment and retention. Digitizing enables oil & gas companies to build advanced remote operations centers that integrate operational technical and IT data. Digital devices are used to aggregate data from multiple sources to maximize production of the oilfield in new and existing areas and use analytics to recognize optimization potential. Wearable technologies as well as industrial mobile devices help them collaborate appropriately and respond faster (Holsman, 2015). 3D printing is helping to create safer tools as well as spare parts for aging resources on an offshore platform. Digital and virtual representations of assets created using 3D scanning technology enhance the maintenance of upstream and downstream assets. Predictive analytics and automation are being used to increase throughput throughout the value chain. Then there are new digitized field crews who can be ubiquitous and often supplemented by the next generation of field crews, drones, and intelligent robots. These next-generation field workers can safely perform dangerous tasks such as inspecting plumbing and flare stacks. Using new technologies can increase efficiency, which is particularly important for global oil and gas companies. Utilization of these digital technologies has freed up new hydrocarbon resources and also increased operational efficiency in the value chain.
Part 1
Digital technologies used in oil & gas industry
IoT: Internet of Things (IoT) is the practice of capturing, analyzing, and manipulating data generated by network objects and machines. The Internet is used to connect people and is now connecting people to people and constantly collecting, analyzing, and exchanging data. It is becoming the sixth sense of humanity. The main drivers of IoT resilience are sensors, networking, big data, and storage. In the current industry environment, oil and gas companies must begin processing data just as they did with hydrocarbons. Data needs to be generated, communicated, stored and processed. Businesses can gain considerable value by developing a comprehensive IoT strategy to enable business transformation. The use of the Internet of Things in the oil and gas arena is endless. Upstream industries lose billions of dollars each year due to unproductive time (Abukova, Dmitrievsky & Eremin, 2017). The Internet of Things can be used to help Abbot Group to reduce NPT incidents, predict failures and schedule preventative maintenance by using real-time data. Lots of reservoir data can be combined with live field data to plan well and can prevent accidents as well as optimize processes. The midsize industry has the challenging task of delivering variable volumes and grades of products to new end users and markets from multiple locations. Connecting pipelines networks, sensors, leak detection, alarms, and emergency parking for seamless interaction and analysis and interpretation in real time will significantly reduce some of the major risks involved in the industry. The downstream industry is the most challenging branch of the business. Refinery shutdowns, handling of all grades of crude oil, and changing environmental regulations are reducing refining margins to a minimum. By using the Internet of Things, Abbot Group can plan outages, minimize downtime and improve safety records. The Internet of Things is the next step in the development of the oil and gas industry. This enables better decision-making, better process optimization, and a safer work environment. In an industry that spends trillions of dollars a year on exploration, development, and maintenance of assets, even increasing the single-digit percentage through the Internet of Things can have a huge impact (Mirzaakhmedova, 2017). The Internet of Things digital technologies currently used by property management companies can improve the overall profitability of the organization.
3D printing: Like most modern businesses, the oil & gas industry has begun to apply 3D printing technology to its regular workflows in several key areas. It has proven to be a valuable tool for producing custom, one-time or small-batch parts while reworking existing designs to create ever more refined and fluid products. Although technology has not yet reached the point where additive manufacturing can replace traditional manufacturing, the industry has found numerous other uses. The current main purpose seems to be rapid prototyping, greatly reducing the cost and turnaround time for developing prototypes. Of the many companies that make up the O & G industry, almost no industry is operational (Singhal, 2014). The development of related technologies and the production of equipment and machinery are an ever-changing process with the aim of collecting and transporting oil and fuel more efficiently and reducing waste. The freedom that the 3D printing industry brings to the advance and development of new products cannot simply be underestimated and is rapidly filtering out all aspects of Abbot Group’s business.
Data analytics: Industry leaders are using analytical models to predict failures of critical equipment components. The next complexities include connecting all parts of the end-to-end production value chain to optimize the balance between production and downstream stages, for example, by adjusting upstream production levels to account for the expected future demand for downstream retail. It also includes the use of simulation to test for fault conditions in platform operations and uses text mining to analyze the unstructured inputs of engineers and operators. Digital technology has great potential to allow Abbot Group to outperform the downturn and provide its customers with the outstanding shareholder, customer and environmental value (Merrow, 2012). Capturing this value does not necessarily have to be outside the organization’s priorities, or it can replace the organization’s priorities and can, in fact, play an important role in generating a consistent response to the transfer of industries. Cheap sensors, increased connectivity, and growing computing power are driving the growth of data collected by oil and gas companies. Modern offshore rigs have around 80,000 sensors and are expected to generate around 15PB of data over the useful life of the asset. Big data and analytics will help the Abbot Group navigate large volumes of data. About 36% of oil and gas companies have invested in big data and analytics. However, only 13% use the insights of this technology to drive them to market and competitors. This difference underscores the fact that these companies do not always fully embed big data and analytics into their systems, but simply apply the technologies one by one. Full deployment can have far-reaching implications for productivity and operations (Maslova & Savkin, 2017).
Digital technology helps Abbot Group reduce costs, improve work and operational safety and make its supply chain more resilient and sustainable. Oil and gas industry companies also apply innovative digital information and communication technologies to their upstream businesses. Today, participants in the oil and gas sector are moving into more remote extremities, trying to squeeze more of their products out of existing wells and face competition from cleaner alternative energy sources as more and more greenhouse gas reductions Political pressure on emissions. Applying and developing a new generation of digital and ICT communications technologies for the oil and gas industry provide industry participants with opportunities to increase production reduce costs and mitigate climate and environmental risks. If Abbot Group LLC executives are able to leverage the right technology to support their business strategy, Abbot Group employees can now further reduce costs, deliver unparalleled productivity and significantly improve performance. If Abbot Group can invest in a new generation of digital information and communication technology and put it into money, you can save up to 1 billion US dollars in cost (Spear & Leis, 2014). Executives that make the Abbot Group more digital look good for new growth opportunities. Rapid advances in technologies such as big data and analytics, sensors and control systems give Abbot Group the opportunity to automate high-cost, dangerous or error-prone tasks. Most oil and gas operators are already beginning to seize these opportunities and will speed up their efforts. If Abbot Group Ltd succeeded in automating, they could significantly improve their bottom line. While automation offers many potential benefits in the upstream value chain of exploration, development, and production, some of the biggest opportunities lie in production operations such as reducing unplanned downtime. Internet of Things, 3D printing and data analytics have given Abbot Group Limited a dramatic increase in upstream capital investment, optimizing production efficiency. Automation creates some opportunities for this: maximizing assets and good integrity by optimizing production, increasing oil recovery and increasing oil production without compromising health, safety and the environment. In order to bring more digital technology to the project, Abbott Group Limited coped with lower commodity prices and worked hard to improve its efficiency. The Capital Project team began to focus on the wave of digital transformation by digitizing assets and processes (Lupton, 2014).
Part 2
The cloud-based ERP system can enhance the Abbot Group’s approach to planning and coordinate its product and service supply chain across multiple productions and distribution facilities and countries. Market dynamics have forced Abbot Group Ltd. to meet delivery and cost targets more closely than ever before. Without the visibility of the supply chain, it is difficult to reduce operating costs and reduce time to market. Manufacturing cloud ERP and supply chain planning and management enable the organization’s supply chain to function accurately and responsibly, giving Abbot Group greater visibility, agility, and collaboration. Manufacturing cloud ERP and integrated supply chain management solutions can increase supply chain transparency and enable organizations to build trust with customers and suppliers (Wu, Cegielski, Hazen & Hall, 2013). Self-service portals enable customers and suppliers to check order status, enter quality specifications, submit quotes, review material status, and much more. The organization can also ensure supplier quality and comply with supplier performance tracking ERP systems to provide end-to-end transparency in the Abbot Group’s supply chain. More and more businesses recognize the many potential benefits that enterprise resource planning has to manage business information, consolidating systems and workflows, and ensuring optimal operational efficiency. When it comes to supplying chain management, companies need to interact with a wide range of suppliers and partners to get the raw materials and resources needed to bring the finished product to market (Hitchens, 2015). ERP plays a crucial role in combating inefficiencies; reducing waste and ensuring that workers can better guide their work. The integration of the two systems may present some unique challenges. It is in the company’s best interest to ensure that the company and its employees fully understand the role of ERP in the SCM process.
Part 3
In developing nations, politics, unstable economy, lack of infrastructure and limited use of enterprise management technologies are common, companies have an important decision. The main logic problem is the entry level and the official reseller problem. In this stage, the organization is dependent on local partners only. He does not have local staff and does not have domestic management. Instead, provincial management oversees operations in emerging market groups (F. Gross, Hayden & Butz, 2012). This stage has not made any investment in local infrastructure. On the other hand, globalization has led to business barriers, information technology advancements, and traffic technology while executing current affairs (Rontos, Nagopoulos & Flora, 2014). Operation Managers take the competition from the company’s street, as well as from across the country and from across the globe. The problem of a bigger issue is direct sales, where two organizations have established Forbes’ sale of the company’s own employees. However, most businesses, including the basic facilities needed for the business, have constant confidence in local partners. In contrast, Operations Managers must protect themselves with the consequences of each column in which their work affects safety, welfare, community, environment and financial stability (Fleming & Konstantaras, 2014).
Part 4
Human behavioral issues Abbot Group face in relation to the implementation and execution of digital technologies
The way human interaction with technology affects the way we create physical space around us. The expected growth in networking objects as part of the Internet of Things will have the greatest impact on our global and urban design and impact on all industries in the coming years and decades. Privacy and data protection will relate to how people feel like giving up, trading, or getting others to gather information based on their actions.
The Internet of Things may lead to an increasingly large-scale, highly-coupled technology system that eliminates human intervention to improve reliability but at the same time increases the likelihood of social vulnerability due to hacking or major system breakdown. If the general public is more concerned with IoT privacy, data protection and other social issues than with the potential benefits of public safety, energy savings and cost reduction, then public attitudes, opinions and behaviors will be crucial (Mavrou & Hoogerwerf, 2016). The problem may be due to the production of large amounts of data, which may not necessarily be valuable or unnecessary, and may be misused, leading to invalid inferences.
Some of the human behavior challenges that the Abbot Group faces when it comes to adopting 3D printing technology will need to be addressed. As 3D printing relies heavily on digital information, IT leaders need to play an important role in any new integrated technology. IT staff needed to create a robust and secure digital infrastructure to manage the company’s 3D data. Engineering teams must also prepare digital assets for on-site use while developing new products that leverage additive freedom to create designs without sacrificing performance or safety (Borisov & Velyova, 2016). This means that industry giants must compete in other ways. They are reconsidering their relationship with suppliers and suppliers. Controlling large quantities of oil is not enough to sustain the market. Even the largest traditional companies in the industry will be forced to innovate to stay relevant.
However, adoption of data analytics is hampered by regulatory issues. Imagine a future in which robots will be able to run multiple operations autonomously and to a large extent replace field staff. UAVs and autonomous robots will help reduce the cost of upstream business. They expect to support a 20% reduction in drilling and completion costs, a 25% reduction in inspection and maintenance costs, and a 20% reduction in staff costs in all regions (Pellerin, 2012). The powerful analytical tools and reports provided through aggregate data will provide credit union leaders with the ability to make informed decisions that affect the future success of their organization.
Recommendations
Recommendations Abbot Group must apply:
A methodical approach to developing new capacity development and industrialization.
This includes decisions on whether to build or buy capabilities and how to manage processes that expand the technology and digital platform.
Reform the company’s data structure.
Data is at the heart of digital transformation and the coordination, integration and interoperability of data platforms are crucial.
Identify opportunities for deepening collaboration and understanding of shared economic platforms.
This avoids the potential risks of changing customer preferences due to the rise of a shared economy.
Like any other transition, digital transformation requires top-level sponsorship. This includes setting clear visions, committing funds and resources, and actively advocating change management that is relevant to them.
Conclusion
This study concludes that digital transformation can change the way people work and live, in line with the great industrial revolution of the past. While digital transformation has tremendous potential to benefit industry and society, it does not guarantee that its full value will be released. For this reason, all major stakeholders, including coordinated regulatory efforts to maximize the digital value of society and industry, must all engage in dedicated cooperation and determined action. Successful digitalization will require collaboration between industry leaders, communities, and policymakers.
References
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Borisov, A., & Velyova, V. (2016). Logistics management of processes ensuring the operations of oil derivatives chain. MEST Journal, 4(1), 11-18.
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Fleming, P., & Konstantaras, I. (2014). International Journal of Systems Science: Operations & Logistics. International Journal Of Systems Science: Operations & Logistics, 1(1), 1-2.
Hitchens, J. (2015). New Technologies Provide a Wider Array of Products via Digital Fulfillment. International Symposium On Technologies For Digital Photo Fulfillment, 2009(1), 28-32.
Holsman, R. (2015). How is digital transforming the oil and gas landscape?.
Lupton, D. (2014). Critical Perspectives on Digital Technologies. Sociology Compass, 8(12), 1344-1359.
Maslova, O., & Savkin, S. (2017). THE SPECIFIC CHALLENGES IN PROJECT MANAGEMENT FOR THE OIL AND GAS INDUSTRY. Oil And Gas Business, (1), 217-235.
Mavrou, K., & Hoogerwerf, E. (2016). Towards full digital inclusion: the ENTELIS manifesto against the digital divide. Journal Of Assistive Technologies, 10(3), 171-174.
Merrow, E. (2012). Oil and Gas Industry Megaprojects: Our Recent Track Record. Oil And Gas Facilities, 1(02), 38-42.
Mirzaakhmedova, M. (2017). Surfactants from the secondary intermediates used in oil and gas industry. Austrian Journal Of Technical And Natural Sciences, 35-37.
Pellerin, M. (2012). Digital Documentation: Using digital technologies to promote language assessment for the 21st century. OLBI Working Papers, 4.
Rontos, K., Nagopoulos, N., & Flora, T. (2014). Social Elites and New Communication Methods/Information Technologies: The Digital Divide. Archives Of Business Research, 2(5), 29-46.
Singhal, S. (2014). Electric Drive Compressor Systems: High-Speed Turbo Compressors Used in the Oil and Gas Industry. IEEE Industry Applications Magazine, 20(6), 52-63.
Spear, N., & Leis, M. (2014). Artificial neural networks and the accounting method choice in the oil and gas industry. Accounting, Management And Information Technologies, 7(3), 169-181.
Wu, Y., Cegielski, C., Hazen, B., & Hall, D. (2013). Cloud Computing in Support of Supply Chain Information System Infrastructure: Understanding When to go to the Cloud. Journal Of Supply Chain Management, 49(3), 25-41.