MIDSTREAM & PIPELINES
Northwestern Support Professionals Inc. Explains to OGI Readers the Importance of Automating Your Pipe-Yard Inventory Management Process A busy Canadian pipe yard loads and offloads as much as 50,000 metres of pipe every day, representing about $2.5 million in inventory. Rather than having to perform tallies manually, software solutions like Tallys and TallyWizard are quickly becoming the standard for inventory tracking and management among leading companies in Canadian oilfields. OCTG Inventory Management
or a small team, managing high volumes of inventory can be daunting. Many still perform tallies manually; incoming and outgoing shipments are entered into a spreadsheet or local database by dispatchers and yard staff. Jason Newman, VP at T Bar 1 Transport, explains the complicated system of excel spreadsheets they were using to manage inventory. According to Jason, it was less than perfect: “Tubing would get delivered, so we’d write it in the dispatch book. Then the joints would need to go on the rack and be counted, tallied. Then we’d bring that count in and enter it into the excel system we built. We’d have to enter it manually every time. Then when joints left the yard, we’d have another sheet where we marked outgoing joints. We always had to remember that when we added a record to the outgoing sheet, we’d have to remove those joints from the inventory sheet. It was a lot of work. With that old system, there was just so much room for error. In the end, we created a third sheet, to mark down every job that happened, so if all of a sudden something was missing, we had a third one to back check on. Then we had someone in the back office checking for errors. There was a lot of manual checking and adding. A lot of room for mistakes.” Ian McKinley is VP of pipe inventory and OCTG products at Winalta Transport Ltd., a division of TFI Transport 7LP. Winalta also entered the field with the idea of tracking tallies manually - using spreadsheets and database programs like Lotus, and Quattro pro. According to Ian, tracking tubular goods on a spreadsheet was labour intensive and error-prone: “Any time you’re dealing with data entry, there’s room for error. If you’re building a spreadsheet with tallies in and tallies out,
you’re trying to copy and paste and manipulate [the data]. When you don’t own the product, and you’re managing it for someone else, you need to be 100% accurate.” Darcy Paulson is the pipe yard and inventory manager for V.D.M. Trucking Services Ltd. When he joined the team in 1998, they didn’t even have a pipe yard. But for a company that wanted to continue to grow and stay competitive, adding a pipe yard was the next logical step.
With their first yard, a four-acre plot in Edmonton, Alberta, the company was tracking tallies with a calculator, recording the information manually. It’s a process Darcy admits wasn’t sustainable in the long term: “With the size we are now, there’s no way we could be tracking inventory with a manual system. You need a program [to do the tallies].”
Any time you’re dealing with data entry, there’s room for error. When you don’t own the product, and you’re managing it for someone else, you need to be 100% accurate.
Automated inventory management The Tallys system was initially deployed in 1993, developed by Pelican Software. In 2011, development of Tallys was taken over by Northwestern Support Professionals Inc. According to Craig Reimer, Director of Technical Operations at Tallys, managing OCTG inventory is a matter of speaking the language commonly used in the field, something Tallys has been working on for
more than two decades. “Having the right field references is key to inter-business communication and integration. A regular accounting program might have an “item description”, sku, or part number, but may not have a place to store “Size”, “Wall”, “Weight”, or “Thread”. Each of these, even terms like “Yard” and “Rig” are important when giving context to a shipment of OCTG. Other POS and inventory handling solutions tend to have broad terminology to accommodate to a larger market. Those systems hold less value for people in the OCTG industry, that is, they leave room for error when managers are forced to assume which reference is tied to a given field. Anyone managing their tubular inventory with some level of precision will appreciate a system that breaks everything down in terms they’re comfortable with. So we’ve remained focused on a single, vertical market, instead of reaching out horizontally, because that’s what continues to work for our clients in the field.” EVRAZ (formerly Ipsco) reached out to the Tallys team back in 2000, asking for help in making their proprietary OCTG definitions and transactional criteria a requirement when managing EVRAZ stock within Tallys. What resulted was an EVRAZ specific validation process. To this day, EVRAZ maintains a spreadsheet of pipe sizes, walls, weights, threads and grades. When pipe descriptors are added or changed, Tallys users simply read the updated file from EVRAZ’ server to make the latest definitions available. For companies like V.D.M Trucking, the integration with industry leaders like EVRAZ made the decision to start using an inventory management system like Tallys simple. “When we started tracking EVRAZ pipe, they (EVRAZ) asked us to start using Tallys as well. Once we started using it, it was good, it