The impact of RFID on the supply chain for engineering shutdowns

Abstract

Shutdown activity is heavily reliant on supply chain functions, yet planning is frequently based on incorrect or incomplete information. The flow of materials and equipment is critical to preserving the schedule and budget; however, in most projects, the location of critical materials is manually tracked using spreadsheets or relies on limited enterprise resource planning (ERP) system functionality. This creates a number of problems, as there is no automated or accurate method of locating or ensuring material is available after it has left the manufacturer/supply base and is issued for installation; for example:

1. Recent analysis showed 50–70% of materials are subject to some type of waste (rework, wait time, transport and over processing).

2. Additional resources are required to manage constantly changing shutdown schedules and chase up material locations for job-card staging.

3. Materials expedite costs for a four-week shutdown in a remote area can exceed up to $250,000 a week.

4. Up to 30% of materials sent for a shutdown can be returned to inventory, which increases transport and labour costs.

This extended abstract outlines the use of radio frequency identification (RFID) technology and lean supply chain techniques for improving plant shutdown performance, following two major Brownfield engineering projects that used technology innovations, such as active RFID tags, cloud software, solar energy, GPS, 3G/wireless network and mobile devices.

RFID real-time location material tracking and LEAN principles were applied to critical materials to remove waste from shutdown processes, protect the integrity of the shutdown plan and help reduce costs by up to 14%.