Reducing oil&gas OPEX
IronSight Case Study
IronSight Customer: One of the world’s largest oil&gas companies, kept anonymous in this case to respect privacy
Site: One of the largest heavy oil operations in the world, with thousands of wells clustered over a large area
Workflow (before IronSight):
Approximately 100 oil company employees requesting equipment and services from various vendors to optimize and maintain wells
Many vendors providing a variety of heavy equipment and workers. For example: VendorA provides 20 vacuum trucks, while VendorB provides 20 electricians.
100 total vendor units ($200/hr average hourly rate) completing approximately 5 jobs per day for the oil company's 30 service rigs ($800/hr hourly rate)
Many different dispatch positions, about one per vendor
Timeframe: May 2017 - Current
The prolonged oil downturn forced this customer to seek out new efficiencies. Usually oil companies would put pressure on vendors to lower prices or look to find new physical tools or equipment that might make them incrementally more efficient, while ignoring recent advances in digital technologies. But with an annual spend on maintenance/optimization services in the hundreds of millions, this customer recognized their greatest opportunity for improvement. They adopted IronSight to solve many of their service inefficiencies that seem to plague all operations. If this digital logistics platform could even marginally beat the status quo of paper&pen, they’d stand to save tens-of-millions in operating expenditures.
The customer’s workflow prior to IronSight is very common throughout the industry. This is a typical scenario:
An oil company employee (wellsite supervisor for example) is on a service rig job to replace a worn downhole pump.
A valve freezes, putting a stop to the work. The large crew and equipment are now dead in the water, costing the oil company thousands per hour in non-productive time.
The employee needs a steam truck to thaw the valve. He wastes time phoning multiple vendors before finding an available unit.
He verbally explains the complex job to the vendor's dispatcher (driving directions, what valve to thaw, proper procedures etc.)
The dispatcher struggles to accurately jot down the job scope down on a sticky note with 2 other phones ringing on her desk
She then tries to figure out the optimal unit to assign time time-critical job to, but she has very limited data about the location or status her many steam trucks running around the field.
She makes an educated guess and assigns the job to a field unit who she thinks has the least travel distance. Unfortunately she chose a truck driver that was busy on a job taking longer than expected, which causes a costly delay. Furthermore, she had no idea one of her units was on standby very close to the job location, which could have saved fuel and time on the customer’s ticket.
The truck driver also writes down the job details, compounding the risk of miscommunication. He pulls out a paper map of the oil company’s massive field and wastes time trying to locate the job site and nearest station to load water.
He drives to the load station, but unfortunately there is a large bottleneck of trucks lined up to fill their tanks with water.
He decides the wait is too long and takes a risk by driving to the next nearest load station. Lucky for him it’s empty and he fills his tank.
The supervisor on site is extremely stressed knowing his operation is incurring non-productive time (NPT). He has no idea where his requested truck is and can’t properly prepare his crew for its arrival.
The truck finally arrives and thaws the valve so that the supervisor can resume operations.
A paper field ticket is written up (the third time job information has been entered) and the supervisor begrudgingly signs it with no way to validate the questionable amount of hours charged by the vendor.
The job is now completed and the vendor waits a week or two before submitting this ticket (the fourth time the job information is entered) into the oil company’s invoicing system.
A month later the management from the oil company fill spreadsheets with old information to try and analyze business performance and compare vendors.
There are hundreds of vendors traveling about this field described above, providing services for hundreds of job requesters from the oil company. Each vendor company is a silo, not collaborating to make the oil company more efficient. Every vendor has their own dispatcher, who is incentivized to make logistics decisions to increase their own bottom line, not the oil company's. The work is a mix on-demand and routine scheduled. Some jobs are higher priority than others, depending on the oil loss of the producing asset that needs work. Well servicing is highly unpredictable, and massive schedule shuffling needs to occur every 10-15 minutes as coordinators try to manage a finite amount of resources for an overwhelming amount of dynamic work. The frequent changes need to be communicated to every party involved in the job using phones, radios, and email chains. It’s crazy to think that this insurmountable task is currently being done without any help from modern technology like automated communication, consolidated drag-drop work schedule, or birds-eye view of the people and assets in the field.
The customer adopted IronSight to become the singular hub for collaboration between the oil company and its various vendors. It has become the common point to initiate, dispatch, execute, and analyze performance for all services. IronSight had representatives experienced with oil&gas operations on site daily to facilitate the change management process:
IronSight's user-friendly backend database was populated with all personnel, roles&permissions, well sites, equipment, roles&permissions etc.
Dispatching duties were taken from the vendors and given to oil company employees, who have greater incentive to ensure work is being done efficiently.
A physical Dispatch Hub was setup with multiple monitors and workstations displaying IronSight’s consolidated schedule and map for their entire field.
All vendors and employees downloaded the IronSight app from the App Store and Google Play onto their mobile devices, which they already owned.
Oil company employees were trained on how to request jobs with the uber-like app and vendors were trained how to activate and complete jobs from their app’s job list.
Managers were trained to use IronSight’s analytics dashboard to compare vendors and discover inefficiencies.
IronSight is a cloud-based SaaS solution accessible from any web broswer, such as Google Chrome. No hardware purchases are required. The user-interface is extremely simple which minimizes training time. The investment required to implement IronSight was minimal. It only took a day or two for the customer's jobs to start flowing efficiently through IronSight’s apps:
The customer calculated that their efficiency has improved by approximately 30%, saving them tens-of-millions annually. These savings can be attributed to the 5 categories shown below. Scroll through the slideshow below to see the inefficient processes IronSight replaced, and the associated cost savings.