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IBS’ iCargo live at Nippon Cargo Airlines
IBS’ next-generation Cargo Management System, iCargo has gone live at Nippon Cargo Airlines (NCA), Japan's only all-cargo airline, and IBS’ launch customer for the product. iCargo is a versatile Cargo Management System that helps airlines improve their service levels significantly, manage their cargo business more cost-effectively and remain competitive in an evolving market.
This system which was developed in collaboration with leading cargo airlines such as South African Airways Cargo, Gulf Air, Air New Zealand Cargo, Qantas Freight and Australian Air Express, provides comprehensive functionality to support the management of airfreight from shipper to consignee.
iCargo which had a successful cut over on 07 April 2008, 00:00 (Japan Local Time), now optimizes the inventory of NCA’s flights and allows them to plan airfreight capacity, track goods, manage customers, rate AWB, manage terminal operations and handle mail & Unit Load Devices (ULD). The new system which replaces the Unisys system will also allow NCA better overall revenue management.
Trends in Upstream Oil and Gas Supply Chain Management
Introduction
Traditionally, the upstream phase of the petroleum value chain is characterised by resource intensive processes in a highly dynamic environment. The processes involved in oil production are diverse, costly and complex. Huge investments are made and the success rate low, as it has been found that from among five attempts, only one well would be found worth investing for further exploitation. Exploration cost can vary significantly and the cost for unsuccessful exploration which consist of seismic studies and un-exploitable wells can cost anywhere between $5m and $20m. Day to day operations are highly dynamic and require the availability of sufficient raw materials, people and equipment at the drilling location at the right time. In case of high cost equipments, it has to be ensured that it remains at the site only for the required duration; as slippages could cost the operation close to a million dollars each day. In case of offshore exploration, operations are vulnerable to geographic uncertainties which again demand efficiently planned, backward integration of the logistics schedules. In short, the key challenge in the upstream supply chain management is forming an efficient strategic and operational logistics plan.
Current major trends in oil & gas industry
Rising global demand
As per Energy Information Administration (EIA), the global oil demand will probably rise by over 1.6 million barrels per day. Bulk of the demand is slated to come from North America, China and Middle East. Overall demand is expected to rise by 50% by 2030.This calls for increased production and supply which will drive the need to strengthen both strategic and operational supply chain management in the upstream phase for increased drilling activities.
Exploring inaccessible sources of oil
Rising oil prices have induced oil producers to explore more wells which were earlier considered to be less viable. Oil and gas companies are re-evaluating ageing wells, increasingly moving to deepwater exploration and trying to access oil fields in inaccessible areas such as arctic Russia. This calls for a safer and optimised supply chain management strategy that ensures that both people and material resources are transported safely to and from the drilling sites.
Rising cost of resources
Another trend that the oil and gas industry is witnessing is the rising cost of infrastructure. For instance, OPEC statistics indicate that upstream costs have increased by 50% since 2003. Though there has been a rise in the price of crude oil which potentially should keep the margins up, this has been offset by the rise in cost of resources. Of the total operating cost, it is estimated that close to 15-20% is attributed to logistics and operational supply chain management processes. This includes the cost of transportation resources or increased hiring charges and also the cost of human resources who are employed in managing these resources. The companies are therefore looking for ways to rationalise the cost and maintain the margins. This has even led to complete outsourcing of logistics requirements to third party service providers.
Increasing role of technology
Technology has been sought to at every level with the prime objective of either increasing efficiency of operations or reducing risks thereby reducing cost and safeguarding the already squeezed margins. Drilling technologies like micro-hole technology are being considered as a cost effective method of oil recovery from shallow wells, while new ‘well monitoring’ technologies are being adopted to reduce the number of unsuccessful attempts. Advanced business application software solutions are being adopted to improve the efficiency of upstream logistics and supply chain management.
Key challenges in upstream logistics and supply chain management
As mentioned earlier, 15-20% of the overall operating expenditure in the upstream phase can be attributed to logistics. This involves both people and material logistics. With rising cost of resources, logistics and supply chain managers are under pressure to rein in this cost and prevent it from increasing. The key challenges that logistics professionals face today are, access to timely information and maintenance of conventional applications to manage logistics operations.
Right Information at the Right Time
There is a need for more transparency and visibility in logistics operations. Every step in the logistics process would have to be tracked and the cost properly allocated to the right cost centres. Most companies even today maintain their data in the traditional way using basic office applications or hard copies. Capturing data relies greatly on the diligence of the person who is entrusted with the task of doing the particular activity. Moreover since most of the communication is done by phone, data would be subjected to communication errors thereby resulting in information distortion. Data often remains in silos thereby preventing maintenance of information centrally. This takes away the chance of real time information processing and thereby preventing availability of information at the right time.
Integrating Operations of Different Stakeholders
The concept of an integrated operational model between oil and gas companies and third party logistics service providers has become prevalent. This has led to the need for more sophisticated business applications that would control access of the application by third party players in the value chain, through features like role based access facilities and controlled login.
Role of enterprise based applications
The role of collaborative enterprise based software systems are gaining relevance in order to address the challenges that oil and gas companies face in maintaining seamless operations. The need of the hour is greater transparency in operations, increased coordination between various locations/departments and real time processing of information. Operational cost needs to be constantly monitored and utilisation levels rationalised.
Few essential features of an ideal SCM and logistics management application for upstream operations have been identified as the following:
• Entire supply chain support: manage logistics from the point of purchase to receipt to final destination
• Facilitate centralised and controlled access: allow all users to instantly access a central repository to find the current status of all operations
• Interfaces with other systems: interface with critical systems such as enterprise resource planning, access control, accounting and resource tracking to ensure a seamless flow of information
• Single solution to manage multi-modal transportation: accommodate all air, marine and land transportation within a single, user-friendly application, in addition to tracking all personnel on board
• Facilitates total cost tracking and Performance benchmarking: calculate the costs of materials, transportation and people within a single application
• Comprehensive reporting: provide a host of reports that can convert data into meaningful reports that would enable decision making both at operational and strategic levels
• Tracks people and asset movement: e.g. tracking people movement from bus to aircraft to platform and back etc.
• High-cost rental tracking: provide alarms when rentals are about to expire and track associated costs
The company offering the above should also have the technical expertise to integrate the solution with other business systems and provide 24/7 live support.
Solutions in the market
IT consulting companies and independent software vendors (ISVs) have been closely monitoring the industry having identified the potential in the upstream oil and gas solutions market. Significant investments have been made by these solution providers in order to study these challenges and develop solutions that address them.
Leading IT consulting companies like Accenture aim at developing customised solutions on a project mode whereas ISVs like SAP, IBS Software Services and Manugistics offer off the shelf products. While most of these solutions address the material supply chain management in the upstream phase, iLogistics from IBS is uniquely positioned to address the challenges of both material and personnel management, and optimizing resource utilization, providing more logistics transparency. It further gains significance, as HS&E is of paramount importance for Oil & Gas companies. iLogistics aids in the planning, execution, tracking and accounting of people and material transportation and has been built to manage the end-to-end logistics operations of upstream oil and gas businesses. A complete business suite that replaces the traditional spreadsheets.
Today, with technology making rapid strides in all fields, it is imperative that companies re-assess their existing IT infrastructure and harness the potential of new generation technologies in a bid to gear up for this intensely competitive market.
Oman Air selects IBS solutions to manage Airline Operations
Oman Air, the leading carrier of the Sultanate of Oman, has tied up with IBS, for a product suite that will help streamline airline processes and modernise operations. The product suite comprises AvientCrew which will aid crew rostering and tracking and AvientFleet which will help in better fleet management.
AvientFleet provides a highly dynamic environment which allows airlines to plan aircraft schedules and maintenance, continuously monitor all flight movements, ensure improved on-time performance for their fleet and provide touch points to identify and alert controllers to help minimize disruptions the operating schedule.
AvientCrew helps airlines manage their crew, optimize crew utilization and enhance productivity right from initial planning, through to the day of operation. It enables easy viewing and manipulation of pairings, rosters, crew data and fast system enquiry. It provides crew management decision support functions that are effective in solving a wide range of problems by real time simulation and ‘what if’ capabilities.
Speaking at the signing ceremony, Habib Bhacker Habib, head of information computing in Oman Air, said: “The investment programme agreed with IBS is amongst the renowned Information Product companies in India and a leading one in the world serving the travel, transportation and logistics industry that meets our needs. The move follows the creation of a new corporate identity for the national carrier of Oman, as it transforms itself into a world-class competitor. Our airline is growing fast and there was a pressing need to upgrade systems to keep up with the software solutions provided by the global travel, transportation and logistics industry. IBS was preferred by Oman Air since its entire portfolio of products has been fully accepted by the industry.”
“We see this deal as the beginning of an important partnership that will help us to help Oman Air directly address their rapid expansion plans. The integration of crew and fleet operations will not only help build efficiency, but also reduce disruption costs,” said Peter Cefai, President Global Business Operations, IBS Group.
KLM opts for IBS’ Crew Management Solution
KLM Royal Dutch Airlines and IBS Software have signed an agreement for AvientCrew, IBS’ crew management solution. AvientCrew will gradually replace KLM’s existing mainframe system, INCRA, which has been handling the carrier’s crew operations since the 1970’s.
AvientCrew optimizes crew utilization and maximizes crew productivity throughout an airline’s operating environment, providing real-time alert, crew data management as well as real-time solutions and decision support functions for problem solving. AvientCrew will help KLM manage all aspects of their crew operations from the handover of the plans from their vacation and rostering systems, to the period beyond the day of operations, allowing for the consistent monitoring and identification of problems as they arise, thus improving overall crew tracking performance while reducing disruption costs. The system will ensure that rosters comply with governmental and regulatory requirements, airport restrictions, crew training, licensing and airline-specific requirements, as well as efficiently manage crew changes and disruptions on the day of operation.
The final choice for IBS’ solution was made after a period of intense and extensive research. Two potential suppliers were selected for a ‘proof of concept’ to help arrive at a final decision. Forty selected KLM users along with business analysts and project architects tested both systems thoroughly before IBS’ AvientCrew was accepted as the best overall solution and IBS the chosen business partner to KLM.
AvientCrew, helps airlines manage their crew & optimize crew utilization and enhance productivity right from initial planning through to the day of operation. It enables easy viewing and manipulation of pairings, rosters, crew data and fast system enquiry. It provides crew management decision support functions that are effective in solving a wide range of problems by real time simulation and advanced ‘What if’ capabilities. The system improves crew productivity through pairing and rostering optimization and reduces disruptions due to absence of crew. The system is currently operational in Emirates, Cathay Pacific and Jet Airways. Oman Air recently signed a deal with IBS to implement both crew and fleet management solutions.
KLM Royal Dutch Airlines is an international airline operating worldwide. KLM forms the core of the KLM Group, other members being KLM cityhopper and transavia.com. KLM merged with Air France in 2004 in a business model that is unique in the aviation industry. Under the Air France-KLM holding company, both KLM and Air France operate as network airlines: via hubs, or transfer airports, they maintain a worldwide network of services to European and intercontinental destinations. KLM and Air France complement each other through the optimal alignment of their networks and through the coordination of their three core activities: passenger transport, cargo transport and aircraft maintenance. |
