This client is a multi-national construction and development company with expertise in civil infrastructure and commercial development initiatives that chose to increase its presence in the power and energy market. In May 2016, the client implemented the Loop Material Readiness solution on a natural gas and combined-cycle power plant construction project. The owner operator stated that the project was to produce a gross capacity of 650 megawatts, improving energy efficiency in the region and powering over 650,000 homes. The power facility was designed to greatly reduce the emissions footprint per unit of power, overall fuel costs and nearly 85% of clean water usage.
Specifically, the client needed to automate its material receipt and location activities on the site. The project team had been receiving materials for months using manual processes, which proved inefficient and error-prone, especially considering the volume and complexity of the lifecycle. Loop Material Readiness was deployed to address their pain points and automatically provide data for relevant key performance indicators (KPIs), providing an ongoing methodology to measure positive impact and ROI throughout the project.
Deployment scope
Initially, the planned Loop Material Readiness deployment scope supported only the management of thousands of heat recovery steam generator components of the plant. Through a detailed discovery and operational assessment, it was determined a more comprehensive deployment was needed. The client’s status quo materials management processes were dependent largely upon paper transactional processes and multiple spreadsheets. It was agreed that to maximize the value of Loop Material Readiness, it would also be needed to digitize field materials management and processes to allow for more time on tools. As a result, the project would see increased labor productivity and real-time material data powered by auto-ID and tablets.
Pain points
The project was very complex, with over 80,000 diverse materials. Care, custody and control was shifted between several concurrent teams over the span of 2½ years. The Loop Material Readiness team needed to address the following pain points:
Schedule delays
Cost overruns
Limited material visibility and low inventory accuracy
Disorganization
Delays in material location
Re-procurement risks
Manual, inefficient processes
Solution
The Loop Material Readiness deployment was designed to relieve these specific pain points and to achieve the following goals:
Enhance productivity
Material visibility throughout the supplychain
Reduction of direct and indirect labor costs
Virtual separation of designated material inventories
Proper reporting data for high-level fulfillment
Create digital receiving, storage and issuing processes
Re-procurement cost avoidance by accurate electronic record-keeping and GPS/RFID location tracking
Inventory management and recognition across multiple yards and warehouses
Preventative maintenance record-keeping
Deployment details
Material readiness approach
The client was looking for an opportunity to utilize a continuous improvement solution within their materials management processes. According to industry studies, the typical direct laborer spends 15% of the day waiting on materials. With Loop Material Readiness, users have access to real-time material data throughout the supply chain, ultimately reducing wait times through positive material location identification, better planning with reliable data and a collaborative platform with work planning tools and scheduling software. Field users perform the following material transactions on mobile devices:
View and identify material locations
Request materials
Allocate materials to pick lists
Perform inspections and preventative maintenance
Flag overage, shortage and damage (OS&D) issues to quarantine
Issue bulks to site
Return items to stock
This increase in accuracy, visibility and efficiency ultimately drives a more productive, less wasteful site.
Material visibility and inventory accuracy
Prior to the Loop Material Readiness deployment, material receipts had been ongoing for months. The first challenge presented to the team was to improve inventory accuracy. Over 2,200 materials had been received on-site, and each piece required identification, verification and placement into inventory. Integrating purchased material data into Loop Material Readiness was imperative to achieve a streamlined process. Within two weeks of deployment, the first laydown yard had been geo-mapped, and all materials had been received and labeled. All physical locations were referenced in the system, enabling the team to find, pick and issue materials quickly and accurately. The method of material data integration was also defined, allowing large numbers of materials and
Tagging strategy
Barcode
The client opted for geo-location via barcode to manage the materials in its equipment laydown yard. Barcode labels are ideal for warehousing and controlled laydown yards where materials aren’t moved frequently, and they provide a cost-effective solution for materials stored indoors or in fixed locations.
Active RFID tags
These tags are battery-powered and transmit RF signals at a regular cadence, making them the ideal solution for high-dollar, long-lead time, engineered materials that might be scattered across a large outdoor area. These materials have high a possibility for movement and thanks to the active RFID tag’s beacon, users can easily keep track of their real-time location and status.
Receiving, storing and issuing material
Receiving material manually is inefficient, and independent time studies show an average of 40 minutes per receipt when using a clipboard. Loop Material Readiness digitizes and automates material transactions throughout the supply chain. That data is fed to the server, enabling a streamlined process in real time. Independent time studies for receiving material in Loop Material Readiness show an average of eight minutes per receipt, and that includes OS&D activities.
Deployment lessons learned
Following each project implementation period, the Loop Material Readiness team project management team would meet to identify challenges that may have impacted overall success, ease of set-up, adoption and/or full deployment of Loop Material Readiness. Below are lessons learned that would help increase the overall positive impact, as well as the perceived and realized values of Loop Material Readiness.
Measured improvements with Loop Material Readiness
Receipts
In the first 60 days of Loop Material Readiness usage on the project, over 8,300 material receipts were performed digitally with tablets. The labor savings and cost avoidances from the new material receiving report (MRR) process is anticipated to reach a 3-to-1 return on investment over the life of the project.
Issues
Since deployment, Loop Material Readiness has recorded over 900 material issues. Based on independent time studies, the typical issue activity with pen and paper takes 11 minutes. With Loop Material Readiness, this activity now averages 3½ minutes. A 7½-minute decrease per material issue means significant savings over the life of the project.
Direct and indirect labor
Two of the client’s most important requirements for a successful Loop Material Readiness deployment were increased efficiency and cost savings associated with material withdrawal requests (MWRs) and PMI activities.
Material withdrawal requests
Paper-based MWRs were the norm for this client until Loop Material Readiness enabled the creation of a digital MWR with need-by date. Within the digital MWR, the requester can immediately see the percentage of materials ready for pick and issue and can also drill down to which materials are unavailable and why (inspection, OS&D, shipping delay, etc.). MWR status is visible to all associated parties in real time.
Managing by exception empowers team leads to better plan the work of those in the field, significantly increasing tool time.
Documented savings
Project lead times were greatly improved as Loop Material Readiness provided metrics for engineers and managers to allocate resources more efficiently. Timed studies showed that digitizing the MWR saved an average of four minutes per document vs. its paper counterpart. Yet the most significant impact is the visibility into work planning, making field activities far more productive.
Preventative maintenance and inspections
The client also wanted to improve upon its paper-based PMI activities. Loop Material Readiness was able to drive efficiency by enabling material activities such as receipt to automatically trigger an inspection task. Additionally, preservation activities are able to automatically update material information. For example, if a material fails inspection, Loop Material Readiness can automatically place that material into quarantine status. With Loop Material Readiness PMI functionality, users are able to perform the following tasks:
Build inspection templates
Upload requirements from suppliers
Documented Savings
Create recurring inspections
Set reminders and alerts
Assign inspections to a user
Locate equipment requiring maintenance
Collect photos and digital signatures
Documented savings
Time studies revealed that the status quo process for creating and updating PMI records averaged 15 minutes per material transaction. Using Loop Material Readiness and a mobile tablet, that time was knocked down to five minutes.
Analysis and conclusion
By deploying Loop Material Readiness, the client has reduced material-related risks and eliminated associated inefficiencies. As the project progresses and time savings associated with direct and indirect labor increase, the labor savings will also increase.
