When the downturn took hold in 2014, there was widespread recognition that the industry needed to make significant changes to how it operated. Inefficiency, it was clear, was a major challenge. Today, we’ve come a long way. JIP 33, which was launched to introduce standardized procurement specifications, to reduce cost and lead time, now has close to 50 specifications and adoption increases week on week. JIP 36, the Capital Facilities Information HandOver Specification (CFIHOS), has been helping to standardise data and information standards across the operating community, reducing transaction costs and ushering in best practise in digital data handling.
We’re now about to go much further. We’re bringing these two initiatives together to create a Global Equipment Hub (GEH); a cloud-based repository for storing and exchanging vendor information associated with the standard equipment our industry buys. To put this in context, about 40% of the equipment we use is common across the industry, and yet millions of dollars annually are wasted processing, packaging, and transferring the data associated with it through the supply chain on single projects.
Eliminating that waste not only has benefits for our owner/operator community, but also the engineering, procurement and commissioning contractors (EPCs), package suppliers and original equipment manufacturers (OEMs) we work with.
Transaction costs
David Harris, IOGP’s JIP 33 Published Specifications Manager, explains: “Our Global Equipment Hub (GEH) Task Force identified that on a typical major capital project, we spend an estimated US$2 million in transaction costs, as information flows from OEMs to package suppliers to EPC contractors and, finally, to owner/operators. At each step, there’s processing, packaging, and transferral of this information – typically around 100,000 documents, each involving an hour’s processing. On larger projects, this can cost in excess of $10 million USD. That’s before hidden costs, like late, missing, or inaccurate information and data storage.”
“With a GEH, we can greatly reduce and simplify the processing and transmitting of OEM information during the design and build phases of projects. Vendors can upload their information once, making it available to all their customers, from package suppliers and EPC contractors to owner/operators. Stored and accessed this way, it only needs to be verified once, reducing complexity and the chance for errors to creep in. For users, there will be reliable equipment information that’s far easier to access and use. And we only see more benefits coming, through field life, as we build out the platform and add functionality.”
Proof of concept
The concept was initiated by the Global Equipment Hub Task Force, which sits under the Digitalization and Information Standards Committee (DISC), in 2019. Last year, the JIP 33 team picked up the mantle and ran a proof-of-concept pilot. Now, it is working with global data science company Sharecat Solutions and a group of early owner/operators, as well as EPCs and OEMs, to develop and refine an initial, minimum viable product (MVP), including an API for operators.
The MVP will focus on JIP 33 electrical specification products, which account for nearly a third of the 48 JIP 33 specifications we have to date. We’ll be working with 44 vendors of these systems we’re in contact with to build a data library, and onboard early adopter owner/operators, to see how they can import and use information in their own systems.
The MVP is targeted to be completed by July 2022, when early adopters can start using the system and providing feedback. The next step will be to scale-up to cover all other JIP 33 categories.
“For many manufacturers, this is going to provide a level of visibility to purchasers that they may not have had before,” says David. “It could also allow for easy distribution of engineering bulletins relating to that equipment, and other information like lifecycle management. Once you have this database, there’s a lot of other functionality you could achieve.”
More efficient
“It’s a fantastic opportunity for both manufacturers and purchasers to work together to help the engineering and procurement process become more efficient than it has ever been,” says David, “and the manufacturers we’ve spoken to so far are very enthusiastic. They completely understand the opportunities.”
“Executive management teams within the owner/operators have set a clear strategy around standardization,” says David. “JIP33 and JIP36 were the start of that journey. To achieve the Global Equipment Hub, to implement these specifications, and to make them visible to the supply chain so they buy into the opportunities and benefits, will require significant effort. But it’s achievable and there are benefits for everyone throughout the whole supply chain.”
