Urgent needs of materials in remote locations

For the gas, oil and mining businesses operating in long-flung areas, stockpiling surplus materials isn't always just a contingency plan - it's important for commercial enterprise continuity. When a vital piece of equipment fails in a far-flung region, having the right spare part effortlessly to be had can suggest the distinction among a quick downtime delay or aprolonged outage that prices tens of millions.

The capability to self-source surplus substances and preserve operations running is actually quite a lifeline for those remote industrial sites. Yet many corporations struggle to preserve suitable stockpiles due to economic pressures, loss of storage space, and logistical demanding situations. However, the potential prices and dangers of no longer having those surplus substances far outweigh the difficulties of stockpiling them well.

The Arctic Drilling Debacle

A stark example played out in 2019 at a remote Arctic oil drilling site. When a crucial pump motor burned out in subzero temperatures, the replacement part had to be expensively airlifted in from the nearest supply hub over 1,000 miles away. Delivery took nearly two weeks as the part was handed off between different aircraft types.

In the interim, the entire $120 million drilling operation was put on hold, resulting in $5.2 million in lost productivity plus another $3 million in transportation and logistics costs to get the repair done. An independent audit later concluded that simply having that $80,000 motor sitting in surplus materials storage on-site could have allowed the repair to happen in a couple of days - a net savings of over $8 million.

Case Studies in Surplus Success

Of path, prepositioning surplus materials is far from a perfect solution. Maintaining those buffer stocks ties up working capital and storage space that could be used for other operational needs. 

There also are worries approximately components going obsolete or materials degrading through the years. Smart stock control practices are essential. But for some of the largest players, the surplus materials strategy has paid off in spades. A multinational mining corporation based in Australia has diligently maintained regional stockpiles of spare parts, tires, dusters, field gear, heavy equipment components and more. Their internal analysis calculated surplus carrying costs of around $22 million annually across all sites.

However, having those surplus materials on hand allowed them to reduce operational downtime incidents by 78% compared to the prior year - unlocking $187 million in avoided revenue losses. The surplus investment yielded a solid 8.5x return for the company. An integrated gas company took a similar approach at their liquefied natural gas processing terminals in remote areas of Russia. Keeping surplus inventories of machinery components, firefighting supplies, safety gear, communications equipment and more prevented 193 unplanned outage days in just the last year. The estimated $63 million surplus carrying costs were easily justifiable against the potential $415 million in downtime losses those stockpiles  helped them avoid.

Closing the Logistics Gap

While these examples show the clean fee surplus stockpiles can provide, in addition they underscore one in every of the most important limitations - transportation get entry to. When your industrial operation is based in a frontier region with underdeveloped freight infrastructure, honestly getting substances delivered in a timely manner may be a huge headache. Some electricity groups have gotten creative, organizing ahead logistics bases and staging regions for surplus supplies much closer to the cease vacation spot. One multinational has even positioned transport bins stocked with important spares along ice street routes within the Arctic. 

While steeply priced, these interim logistics nodes have dramatically decreased the time and prices required for delivery when something does move incorrect on-web site. Other organizations are exploring collaborative fashions of sharing surplus materials and transportation channels amongst one-of-a-kind operators inside the same geographic vicinity. These cooperative logistics strategies help minimize sporting expenses for anybody entity while making sure all people can gain from shortened supply chains.

The Remote Imperative

For higher or worse, the sector's thirst for electricity and assets means we should retain tapping reserves in increasingly remote frontier areas. As gasoline, oil and mining companies project farther from hooked up delivery chains, having accessible surplus stockpiles will become even more essential to preventing high priced operational disruptions.

Through smart inventory control, collaborative logistics strategies, and calculated investments in buffer stock, those groups can mitigate principal risks and stable their far-off operations for the long haul. The route ahead calls for careful optimization, diligent practice, and accepting the in advance prices of keeping surplus substances on the ready.

When a breakdown does arise at a faraway business outpost, the near-term availability of that substitute element might appear like an inconsequential element. But without the ones surplus substances standing via, it may suggest an outage that threatens to go away the whole operation inside the dark. In the arena's distance-flung frontier areas, the proper surplus stockpiles are what maintains the lights on.

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FAQ:

Q: Isn't it very expensive to maintain all those surplus stockpiles?

A: While there are certainly carrying costs involved in surplus inventory, the potential costs of downtime from not having critical spare materials far outweigh the expenses of stockpiling. Many companies have found the surplus investment provides a high ROI by preventing millions in lost productivity.

Q: What happens if the surplus materials go obsolete before being used?

A: This is one of the risks of surplus materials that must be mitigated through smart inventory management practices. Companies have to carefully track and cycle out any obsolete items while forecasting future material needs. Maintaining the right technology stack and communicating with equipment manufacturers is crucial.

Q: How do you prevent surplus supplies from degrading in harsh environments?

A: Proper storage and warehousing conditions are essential. This may require climatecontrolled facilities, airtight containers, desiccant packs, and other preservation measures depending on the materials. Following best practices for storage and regularly auditing stocks helps prevent degradation.

Q: Isn't it duplicative for every company to maintain their own surplus piles?

A: While going alone is an option, there's a growing trend towards collaborative logistics and sharing of surplus stocks between companies operating in the same regions. This helps minimize carrying costs while providing mutual backup supply channels.

Q: How do you decide what materials need to be stockpiled?

A: Methodical forecasting and data analysis are required. Companies must look at equipment reliability data, risk assessments, operational criticality, sourcing lead times, and more to determine buffer stock requirements. Safety gear and communications equipment may trump machinery spares in some environments