Training on Oil and Gas Inventory and Materials Optimization

Module 1: Inventory Challenges in Oil and Gas

• High-value, long-lead-time spares for critical equipment.

• Remote locations, infrequent demand, and high downtime costs.

• Balancing reliability vs. working capital.

• Case Study/Hands-on Exercise: Analyze the inventory of an offshore facility, identifying high-cost items with long lead times and quantifying downtime risk if unavailable.

Module 2: Critical Spares Classification

• ABC analysis based on annual usage value.

• FSN (Fast, Slow, Non-moving) and VED (Vital, Essential, Desirable) classification.

• Criticality matrix combining downtime impact and lead time.

• Case Study/Hands-on Exercise: Classify 50 spare parts using a combined VED-ABC matrix to determine stocking and review priorities.

Module 3: Multi-Echelon Inventory Optimization (MEIO)

• Central warehouse, regional hubs, and field locations.

• Risk pooling and inventory positioning.

• MEIO tools and algorithms for oil and gas.

• Case Study/Hands-on Exercise: Model a multi-echelon inventory network for a region with one central warehouse and five field depots, optimizing stock levels across all echelons.

Module 4: Demand-Driven MRP (DDMRP) for Spares

• DDMRP principles for intermittent and lumpy demand.

• Decoupling points and buffer zones (green, yellow, red).

• Lead time reduction strategies for critical spares.

• Case Study/Hands-on Exercise: Apply DDMRP buffer sizing for a set of low-demand, high-criticality spare parts, calculating green-yellow-red zones.

Module 5: Rotable Spares and Repair Loop Optimization

• Rotable spares: exchange, repair, and return.

• Repair cycle time reduction and float calculation.

• Pooling agreements across sites or with OEMs.

• Case Study/Hands-on Exercise: Calculate the optimal number of rotable spares for a gas turbine module, given repair lead time, demand rate, and acceptable downtime risk.

Module 6: Vendor-Managed Inventory (VMI) and Consignment

• VMI agreements with key suppliers.

• Consignment inventory: ownership, payment triggers, and performance metrics.

• Benefits and risks for buyer and supplier.

• Case Study/Hands-on Exercise: Draft a VMI agreement with a major pump manufacturer, including stock levels, replenishment triggers, and performance service levels.

Module 7: Obsolescence Management and Stock Reduction

• Identifying slow-moving and obsolete inventory.

• Causes: equipment upgrades, design changes, and technology shifts.

• Disposition options: transfer, sell, scrap, or retain for legacy equipment.

• Case Study/Hands-on Exercise: Analyze a list of 200 SKUs with no demand for 24 months, recommend disposition (scrap, transfer, retain) and quantify potential write-off.

Module 8: Field Inventory Management

• Remote site inventories: drilling rigs, platforms, and field warehouses.

• Minimum stock levels, cycle counting, and remote replenishment.

• Tools: containerized storage, RFID, and satellite tracking.

• Case Study/Hands-on Exercise: Design a field inventory management process for a remote drilling rig, including stock levels, cycle counting, and emergency replenishment.

Module 9: Inventory Data Quality and Master Data Management

• Data quality challenges: duplicate SKUs, incomplete descriptions, and wrong lead times.

• Master data management (MDM) for oil and gas materials.

• Standards: ISO 15926, PIDX, and industry catalogues.

• Case Study/Hands-on Exercise: Cleanse a sample inventory dataset, identify duplicate SKUs, and create a material master template.

Module 10: Inventory KPIs and Performance Management

• Key metrics: inventory turns, days on hand, stockout rate, obsolescence percentage.

• Economic order quantity (EOQ) adjustments for lumpy demand.

• Inventory performance dashboards for management.

• Case Study/Hands-on Exercise: Build an inventory performance dashboard for a portfolio of 5,000 SKUs, comparing actual vs. target turns and identifying underperforming categories.