Five strategies for successful Digital Transformation of Materials Management
The Global Pandemic has brought with it, death, devastating life changes and a myriad of workplace changes. The Energy industry did not escape the all-reaching arms of the COVID-19 virus and is still in recovery almost one year later. The ‘new normal’ will certainly include, amongst other things, the hybrid workplace, where communication and access, no matter the location, is a high priority especially in such areas as Materials Management.
Digital Transformation (DX) is the obvious answer; the only way to address these challenges. The appropriate technology and processes can help maximize employee and organizational potential, with solutions that make crucial Materials information available at your office, home, warehouses and work sites.
The lack of proper Materials Management has been a long-standing issue for many Offshore and Onshore projects. Efficiency is essential, it’s the critical ingredient necessary to optimize the schedule and the budget. Adequate control of the most-costly project component will ultimately improve productivity and cost-efficiency, ensuring schedules are adhered to.
Established companies often can find themselves trapped with traditional, outdated Project Management models, hesitating to innovate and transform digitally to meet their customers' needs now and in the future. MODS recognize and appreciate that conventional, non-digital companies often struggle to implement a digital strategy and make it their business to help businesses transform digitally.
The following five pillars offer guidance that EPCs can reuse and adapt as they pursue their digital Material Management strategies.
Five pillars of digital Material Management strategy
- Innovate the Materials Management process
- Modernize and adapt your Project Materials Communications model
- Turn Materials Data into an asset to create Economic benefits
- Evolve your Digital Ecosystem: Transform with others
- Plan for your Digital Future: it is a continual journey
1. Innovate the Materials Management process
Innovating doesn't have to mean throwing out all of the old and replacing it with the new. Companies can combine their existing Materials Management concepts and components with new, digitally automated solutions, that can achieve modest or radically major improvements. Customers are constantly evolving, and the pressure is on to ensure companies remain commercially competitive meaning they must maintain their digital evolution. The time is now to reevaluate your Materials Management methods and practices.
Material management is a process that coordinates planning, sourcing, purchasing, receiving, storing and distribution of materials. The ideal plan is to minimize waste and optimize the profitability by reducing the materials’ cost. Building materials expenditure can account for 60 to 70 percent of Project costs. Poor Materials and Equipment Management are the usual ‘reprobates’ that cause problems and delays in Construction projects however implementing new digital technology and removing paper-based processes will solve many of these issues.
2. Modernize and adapt your Project Materials Communications model
One of the key tasks in Materials Management is the journey of materials from the office, to the warehouse and then on to the field. It’s vital that Construction materials are accessible at the right place and time during construction. Materials represent a significant expense in construction, minimizing losses, delays, or incorrect materials to the site will clearly reduce the overall project costs. Transparent communication and collaboration are critical elements to ensure a smooth and speedy journey to the construction site.
Legacy infrastructure and systems that no longer meet your Value Chain's demands, will not be fixed by the average IT system. Companies need more than that; to stay in business an organization at all levels, needs to develop a data-driven mindset. A mindset that’s integrated into the culture and workflows, connecting different data points and leverages their full value potential across the organization. Much of this can be achieved and automated in Materials Management with a suitable and experienced software vendor.
3. Turn Materials Data into an asset to create Economic benefits
Every interaction on a Project involving a Material item is data your organization can gain insights from. After the first steps of making this data available to the organization by digitalizing it, the next step is to contextualize this data, basically turning it into a dashboard for actionable insights. Businesses who harness this data gain a digital, real-time ‘picture’ of their Project Materials. This live status is a ‘game-changer’, especially when tracking progress and planning work.
Realizing substantial savings and not losses in Project costs is every Service companies mandate. Purchasing and storing materials too early in the Project, holds up Capital or Materials may deteriorate during storage or get stolen. Adequate planning is crucial to realizing Materials savings while executing Project work. Having accurate data, in an easily digestible format, is vital to keeping on top of costs.
4. Evolve your Digital Ecosystem: Transform with others
A company in isolation from other like-minded organizations may not be able to remedy existing problems associated with Managing Materials for Projects and Maintenance. Developing good relationships with Technology vendors who identify with your problem will deliver value. It is certainly a cultural transformation and a technological one, where everyone must ask themselves, "How can this process be automated or improved?". Processes can’t be redefined without having the relevant data to make the needed changes. Companies can only differentiate from their competitors by employing their data to work for them and leverage close ties with vendors positioned to streamline their projects and ultimately maximize savings.
5. Plan for your Digital Future: it is a continual journey
Can you imagine any business in the Energy Sector that will survive, stay commercially viable, if it remains beholden to Non-digital processes?
If you are not on the Digital path already, it might be a good plan for you to start soon – speed and therefore survival, is of the essence. Persuading Leadership Executives to adopt new ideas is often best achieved by proving that they are very much a viable suggestion. Technology partners such as MODS, are happy to offer Pilots and Proofs of Concept, a good starting point to consolidating decisions. Ultimately, your goal is to create initiatives that deliver real value and drive real outcomes. Collaborating with knowledgeable partners who understand and appreciate where you are and where you want to get to, will ensure targets are achieved and System acceptance across the organization. Digital Transformation is about using technology to fundamentally change processes, for all the beneficial reasons that brings, and unlock the new value of data.
Digital Transformation of the Energy Sector is too big a job to go it alone. It’s a daunting prospect for any team tasked with a partial or total DX ‘makeover’. The industry demands a new ecosystem of digital partners to help organizations metamorphosize, however the same digital agenda is unlikely to work equally for everyone. Engaging with new technology partners will only add value to every part of the project stage gate. Niche partners like MODS are an excellent example due to their scale, availability, and agility. MODS proven track record and more than a decade’s worth of experience, has made it a reliable and trustworthy partner of choice. It is time to be proactive, the Digital age must be embraced and welcomed, especially as the next stage in business evolution gains momentum.
Want to know more about digital transformation? Go check out our Digital transformation - everything you need to know.