ND Profile: Drilling Contractor's Inventory Solution
December 1, 2011
Ensuring its 226 drilling rigs, 229 service rigs and 28 snubbing units operate at top capacity is the priority for the 11 technicians at Precision Drilling’s Nisku Technical Support Center, located near Edmonton, Alberta. And that means keeping about $2 million of replacement parts and pieces of equipment on-hand.
Trying to oversee and maintain this inventory was arduous, time-consuming and expensive for Lee Letawsky, parts technician and purchaser. He was forced to manually update item counts and physically locate pieces of inventory, and he had no insight into each component’s age, usage history or availability. This process was inefficient, and the cost of duplicate orders and overnight shipping charges soon added up.
“We had a mess. Parts were scattered all over, and we wasted lots of time looking for things or ordering things we already had. I wanted to make inventory-control easier and more efficient,” Letawsky says. “We needed an application that had really good reporting and tracking, and was easy to use. It had to be up-and-running as quickly as possible, without getting involved in a lot of technical jargon.”
After exploring several free trial offers, Letawsky purchased Wasp Barcode’s InventoryControl Pro, a WDT3200 mobile computer and a WPL305 barcode printer. When new products arrive at the warehouse, Letawsky uses the barcode on the part, and scans the information into InventoryControl software. He also has created location barcode labels that he affixes to various shelves and bins in his warehouse so he can track the location of each part.
Besides tracking the quantity and location of parts, Letawsky uses the system to store additional information, including frequency of use, cost, size, shelf life, storage options and any temperature controls.
When parts – such as gaskets and pumps – are used together, Letawsky taps InventoryControl’s assembly feature to create a complete repair set that can be tracked as one unit. Creating and tracking these assemblies has helped Letawsky improve the process tremendously.
“We have a moment’s notice when a rig goes down, and we have to get all the required repair parts out quickly,” Letawsky explains. “Previously, it often was faster to order a new part because we couldn’t locate it in our supply room in a timely fashion. Or we had to rush one of the components because we missed sending it initially. Now we know what we have and where it’s located, and we can get all the necessary parts to the field the first time.”
Precision has repair parts that cost upwards of $5,000 to $6,000 each, so eliminating just a few excess pieces of inventory and avoiding rush shipping provides a positive impact to its business
In addition to eliminating over-ordering, the barcode-based solution is accurate and up-to-date, allowing Letawsky to end the error-prone practice of handwritten note-taking. “Barcodes are virtually bullet-proof,” he says. “Barcodes, to me, are like a telephone. You just pick them up, and they work.”
The system also gives Letawsky visibility into inventory age to ensure older items are used first. Further, access to reports generated provides him with additional insight that helps him run the center more efficiently.
Knowing how long particular suppliers take to ship allows him to build-in extra time, as needed, which reduces his shipping fees. And he easily stays abreast of quickly-rotating items to ensure they always are at hand. In addition, he now is equipped to monitor trends, such as high failure rates in particular pieces of equipment.
Letawsky saves about two days a month that he previously spent working on a manual spreadsheet. With Precision Drilling’s vast warehouses, knowing where each item is located shaves precious minutes or hours off locating equipment. The system also may cut payroll, as on-call mechanics no longer have to waste time hunting down pieces during expensive overtime shifts.
“If you’re not in control of your inventory, you don’t know what you have,” notes Letawsky. “There’s so much money tied up in equipment, you really need to know and track your inventory. This system has saved tens of thousands of dollars, improved the repair process, and made my job much more enjoyable.”