Obsolescence Management Guide
Obsolescence management is an important corporate practice, especially for companies in the oil and gas industry. Given the volatile nature of global oil prices due to constant fluctuations in supply and demand, businesses are having to rethink their entire corporate planning, including obsolescence management guide.
What Is Obsolescence Management?
Obsolescence refers to the state where equipment has outlived its usefulness, and some more efficient and newer product has been invented to replace it. Obsolescence cannot be avoided since all things tend towards decay and destruction with time. It can only be managed so that the equipment or system can serve as long as possible for a higher return on investment. Therefore, oil and gas company executives need to be prepared with a strategic obsolescence management plan that will ensure that obsolescence-related costs are minimized as much as possible.
The key elements of a proactive Obsolescence Management strategy
As soon as a product gets off the factory assembly line, its lifespan starts to reduce. And its usefulness will keep reducing the longer it stays on the supplier’s shelf before being purchased by the final consumer. Therefore, it is necessary to be proactive in obsolescence management and simply not just wait for when the product fails to function. A proactive obsolescence management strategy starts right from when a plan is conceived to acquire a new piece of equipment or system. It takes place throughout the equipment’s lifespan, from when it is acquired to when it is disposed of. This is referred to as through-life support, and the equipment manufacturers or suppliers carry it out. The key elements of proactive obsolescence management include:
- Prevention: Business owners should strive to prevent premature equipment obsolescence by ensuring that the right equipment is acquired and proper installation and uses practiced. This is why its important to acquire machines and systems from Original Equipment Manufacturers (OEM). OEM management will guarantee the seamless acquisition of spare parts and services to prevent premature obsolescence.
- Prediction: Obsolescence monitoring and risk assessment are essential to obsolescence management. They facilitate early detection of failure risks or malfunctions to take appropriate action before things get worse.
- Resolution: Identifying potential risk areas in equipment management allows for the solution of identified problems for seamless operation. Resolving obsolescence issues at an early stage ensures that such problems do not accumulate into large-scale high-cost challenges.
Obsolescence management guide
For proper obsolescence management in the oil and gas industry, consider the guidelines given below.
- Start early. As soon as the plan is made to acquire specific equipment, plan for its management as well in terms of spare part availability, proper installation, use, and decommissioning for maximum efficiency.
- Total lifecycle management is key. Consider obsolescence management over the entire equipment lifecycle. This is possible through continuous obsolescence monitoring and risk assessment to identify and correct problems before it is too late.
- Safety should also be considered. Obsolescence management should consider the safety of both the equipment and its operators. Appropriate safety measures, including staff training, can greatly minimize accidents and, consequently, increase equipment lifespan.
Expert obsolescence management services
For those looking for assistance in obsolescence management in the oil and gas industry, IRIDIUM Engineering offers a comprehensive set of asset management services, including obsolescence management. Iridium’s industry-proven asset management solutions provide oil and gas companies confidence in dealing with their aging assets.