PIDX member meetings—US & EU

ConocoPhillips on procure to pay. ACT on web services. Actian on reducing DSO. Shell and the BoL. Marathon—visibility for suppliers. Shell’s century of catalog standards. Platon and the SafeTPin. Genpact speeds order to cash. Amalto KSI case history. Elemica on e-business automation.

Here we summarize and concatenate presentations made at Petroleum Industry Data Exchange (PIDX) member meetings held earlier this year in Houston and London. PIDX, which has been in business since 1987, develops and maintains oil country e-business standards. These now comprise some 14 documents and processes spanning procurement to pay and order to cash interactions between trading partners. The most up to date release is PIDX V5 which includes a new global bill of lading, a right to lift standard and a supplier KPI framework. Looking ahead to what has been dubbed ‘PIDX 2.0’ the group is looking into business processes and global practices, catalogues and classification and regulatory reporting.

James Thompson presented ConocoPhillips’ procure to pay (P2P) metrics as key to supply chain transactional excellence with e-invoicing. After initial North American deployment in 2006, the standard P2P process went international in 2010. The issue now is sustainability which is assured by a support group and P2P metrics of process effectiveness, efficiency and compliance. Key performance indicators are monitored in a procurement dashboard developed with SAP NetWeaver. This allows leading indicators of business satisfaction and process efficiency to be monitored. The system feeds data into multiple reporting and analytical tools including SpotFire, SAP Business Warehouse and Xcelsius and good old Excel. ConocoPhillips is now planning trials of ‘big data’ technology—SAP Hana and Teradata.

ChrisWelsh (ACT Global) argued that the cost of business integration could be reduced with web services and smart devices enablement. ‘RESTful’ web services are seeing mass adoption and PIDX needs to move ahead with smart phone-enabled field ticket leveraging SOAP and JSON for iOS and Android devices.

Daryl Fullerton (Actian) observed that smaller, ‘Mom and Pop’ organizations are struggling with late payment—a.k.a. day sales outstanding (DSO). Some are even going to the wall. Better visibility of e-invoicing and other purchase to pay (P2P) KPI metrics can both reduce DSA and improve supplier relations. Fullerton presented work done for Marathon where Actian’s e-business visibility dashboards help reduce paperwork, reduce re-work and automate validation. The system provides a three way match of purchase order, invoice and remittance. Costs have also been reduced to under $1 per invoice.

Gary Woodward described Shell’s deployment of the bill of lading (BOL) standard. Shell is ‘nearing the end of its standardization journey’ with processes and supporting IT systems in place. Next comes the challenge of communication and data quality and timeliness from any source. Shell’s data exchange program aims to implement an internal data clearing house for loading data and develop an external standard format for exchange of terminal data. The project represents a major shift for the downstream but Woodward reports good progress with 31 EU terminals already exchanging PIDX BOL data.

Paul Hines and Stefanie Ruddick (Marathon) showed how increased supplier visibility reduces P2P errors and better aligns DSO with net terms. Marathon processes some 44,000 invoices/month (60% paper and 40% electronic) on its SAP, Pervasive BX and IBM systems. Marathon’s P2P initiative centered on a joint approach with suppliers to address invoice errors and DSO alignment. Marathon now has better visibility of trends and produces ‘right first time’ invoices, sharing the success with net terms alignment.

Kay McDonald observed that Shell has been involved in materials management and classification for a century, its first materials catalogue was set up in 1914. Since then the company has evolved its catalogues and coding standards as technology evolved—from the Telex, through CD-based data exchange and today’s e-business. Post year 2000 Shell has successively deployed global ERP systems, master data management, data quality standards and KPIs. Current e-business standards used include Trade-Ranger’s open content standard (this is being phased out) and externally, PIDX, Norsok, Unspc and eClass are leveraged. These hook in to a constellation of engineering and construction standards for 3D-models, piping and instrumentation and more. The multiplicity of systems and standards means that there are in reality many material masters across different ERP systems.

Paul Mayer (Platon) floated the idea of ‘SafeTPins,’ safe trading product ID numbers that provide a unique identifier for all products sold to the oil and gas industry. The unique code should link the product to the manufacturer and serve as a primary key for supply chain data management. SafeTPins should be provided at source and available to all customers. They are to be free, but it is not clear how they should be funded.

John Salek (Genpact) sees software as a service impacting order to cash (OTC) transactions as best of breed remote applications enhance ERP systems. E-commerce adoption is growing, paper decreasing and more orders and payments initiated from mobile devices. Genpact’s Akritiv finance and accounting software as a service platform is claimed to automate the whole OTC process.

Other vendor presentations showed oil country e-commerce to be a complex process involving buyers, suppliers and hubs. Jean-Pierre Foehn (Amalto) enumerated some of the hubs working in the drilling field ticket space. These include Oildex, ADP, Ariba and Cortex—each used by different major clients. This complex landscape can be bewildering for buyers and suppliers alike. Foehn presented a case history of oilfield service company KSI which was challenged by error-prone scanning of paper field-tickets. Amalto developed an automation solution leveraging its ‘PIDX-enabled’ B2Box e-business appliance.

Elemica’s Gary Neights emphasized that e-business collaboration requires automation. But while the potential value is clear enough, obstacles abound—particularly bad ERP data. Neights cited a speaker at last year’s PIDX who revealed that in one study, 70% of material numbers tagged for removal 9 years ago are still in use!

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