Material management affects oil and gas facilities more than we can imagine. From finding the correct spare at the right time to optimizing inventory costs, material management has far-reaching benefits. While there are different methods and approaches to material management, here are some insights gathered from our experience of material management for more than four decades:  

1. Develop processes and procedures: Everything needs a plan, and a good plan comprises well-defined processes and procedures. Leave nothing to the imagination. Develop detailed, end-to-end processes and procedures. Define clear stakeholdership to ensure everyone is on the same page and working in the same direction. 
2. Follow standards: There are well-established standards and guidelines for coding, cataloging, data cleansing, and enrichment. As far as possible, stick to the standards. This will eliminate redundancy at large and will make things efficient end-to-end. 
3. Get your BOM, SPIR/SPIL right: Bill of Materials and Spare Parts Interchangeability Records/Lists act as the blueprints of material management. If these blueprints are not updated and accurate, even following the best of the processes and procedures will yield no results. It is common to see Oil and gas facilities functioning with outdated BOM, which leads to poor inventory management. Your BOM/SPIR/SPIL are like a compass; they must always be accurate. 
4. Eradicate duplicates: It is common to see duplicate inventory worth millions of dollars. Such discrepancies in the material data lead to higher procurement costs and reduced availability of inventory space. If you have not done it already, eradicating duplicates can be a good starting point for improving material management. 
5. Define stock requirement: How do you decide correct minimum/maximum levels for your stock items? The best way is to map the supply and demand patterns and determine the optimum stock levels. This is a periodic activity. Stocking is often done based on old demand and supply data, whereas the present requirements differ drastically. 
6. Identify non-moving inventory: Non-moving inventory occupies valuable inventory space. At the same time, non-moving inventory also represents locked capital, which can be freed up and utilized to ease the cash flow. Identifying non-moving inventory and its strategic disposal can immediately improve material management.  
7. Surplus management: Over-procuring, order cancellation, and change of orders lead to surplus generation. This surplus can accumulate over time and become a massive liability if not dealt with. Monitoring and managing surplus periodically is a must for a lean inventory. 

Following these seven tips will improve your material management. Get in touch with us at info@hofintech.com to know more about material management. 

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