The Client
Precision Drilling is the largest drilling rig contractor in Canada, also providing oil field rental and supplies. Operations expanded from three drilling rigs in 1984 to over 240+ drilling rigs and worldwide operations.
The Challenge
The Niksu service center relied on a spreadsheet to manage more than $2 million of repair and service parts inventory. This time-consuming, highly manual process resulted in unnecessary shipping, inventory and labor expenses.
Precision Drilling’s Niksu support center near Edmonton, Alberta, provides maintenance and repairs to the $900-million-plus company’s equipment. Managing the project with Excel was arduous, time-consuming and expensive. Lee Letawsky, Parts Technician and Purchaser, was forced to manually update item counts, physically locate pieces of inventory and had no accessible record of a component’s age, usage history or availability. This process was inefficient and the cost of duplicate orders and overnight shipping charges soon added up.
Letawsky considered using the inventory module for SAP’s R/3 enterprise resource planning software, in use throughout the company. However, he found it was too complex for managing the smaller, less expensive equipment in the center’s arsenal.
“We had a mess. Parts were scattered all over and we wasted lots of time looking for things or ordering things we already had," said Letawsky. "I wanted to make inventory control easier and more efficient. SAP was overkill for our needs. We needed an application that had really good reporting, tracking and was easy to use. It had to be up-and-running as quickly as possible, without getting involved in technical jargon."
The Solution
After exploring several free trial offers, Letawsky purchased Wasp's inventory management software, a Wasp mobile computer and a Wasp barcode printer. Besides tracking the quantity and location of parts, Letawsky uses the inventory management software 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 Wasp's inventory management solution’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,” said Letawsky. “Previously, it was often 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 can get all the necessary parts to the field the first time.”
The Result
With Wasp's inventory management software, Precision Drilling can instantly access accurate data on inventory status and location, eliminating unnecessary reordering of parts and overnight shipping fees. Additionally, Precision can create reports to track suppliers’ delivery times, as well as usage of parts and equipment for predictable spending and ordering. Precision has benefited from zero unnecessary shipping charges and zero unnecessary equipment expenses.
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 rapid ROI and a positive impact to its business profitability.
Wasp's inventory management solution also gives Letawsky visibility into inventory age to ensure older items are used first. Further, access to reports in Wasp's inventory management software provide 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 reliance on costly overnight or second-day shipping fees. And he easily stays abreast of quickly-rotating items, to ensure they are always on hand. He is now equipped to monitor trends, such as high failure rates in particular pieces of equipment, a tool unavailable to him using Excel.
Letawsky saves about two days a month that he previously spent working on the Excel spreadsheet. With Precision Drilling’s vast warehouses, knowing where each item is located shaves precious minutes or hours off locating equipment. Wasp's inventory management software also may cut payroll, since on-call mechanics no longer have to waste time hunting down pieces during expensive over-time shifts.
“If you’re not in control of your inventory, you don’t know what you have,” said 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. It’s easily paid for itself in less than six months.”
