Oil exploration and production company, Total, recognise that it needed to conduct obsolescence management to support its sub-sea inventory. The cost of retrieving equipment from the sea bed can run into millions of dollars and the cost of lost production during remedial repair has to be minimised.

These key cost drivers meant that Total had to develop an obsolescence strategy that was suitable for sub-sea equipment and which could then also be extended to work in other areas of Total's business. Total manages its business through a supply chain, therefore it was essential that the method of managing obsolescence was also directed through the supply chain: it is the supplier who makes recommendations on which processes will be effective in managing obsolescence to ensure availability and supportability of the equipment

Defined strategy

In order to define an effective obsolescence strategy, Total selected obsolescence specialist, CMCA (UK), who were tasked with refining the obsolescence strategy and processes to meet the different requirements of the Total business and their suppliers. Once the strategy and processes had been defined, CMCA (UK) would also help to implement the changes into the company and into its suppliers' management systems.

As existing suppliers may already have some form of obsolescence management it was necessary for the Total requirement to interface with existing processes to develop a communication flow to provide an equipment status on both availability and supportability. The initial requirement was to review the various sectors and identify whether there was an existing obsolescence model, such as the mandatory procedures that are implemented by the defence sector, which could then be adopted across Total's complete supplier base.

As Total's suppliers range from global organisations through to small, private companies, the recommended procedure needed to ensure that the same levels of obsolescence information could be communicated in a consistent format by all of the company's suppliers. This would allow suppliers and Total to make an informed decision on the correct course of action to mitigate the obsolescence risk.

The level of Total's support tended to vary from supplier to supplier: for example, one supplier may already subscribe to complete BoMs monitoring by an in-house tool, whereas other suppliers may have only critical items monitored. The information generated throughout the supply base and supply chain on any part of the equipment needed to be captured and recorded to provide an overall picture on the Total's health status. This information would then allow informed decisions to be made resulting in planned actions for when the equipment is next available for routine service. As a result this could then allow potential failing parts to be replaced during routine services, rather than having to deploy a recovery team as a reactive response following a failure.

The benefits to Total were and remain clear and there are sound financial reasons why obsolescence management should be seen as an asset rather than a cost. However, the process is ongoing, and Total will need to take the lead in understanding the key obsolescence issues that can impact on their equipment.  They will, however, feel more secure in the knowledge that their supply chain is actively supporting  them and their equipment.

CMCA | www.cmca.co.uk

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