Blockchain - The Digital Maturity of Refineries
The digital maturity of oil and gas companies tends to vary along the value chain with Upstream oil and refining—typically asset heavy operations—leading the digitization revolution across multiple areas and even in the most remote parts. Operators in the retail segment are followers looking to use available technologies to enhance their business model.
Blockchain can significantly improve the overall asset management of physical parts within the oil supply chain while keeping the focus on health and safety for both employees and the environment.
With harsh operating conditions to sustain performance and safety, the quality of equipment is critical.
Blockchain – What and Why?
In simple terms, blockchain is an open, distributed ledger that records and verifies transactions between two parties efficiently and in a permanent way.
By removing intermediaries, blockchain provides a new level of transparency and connects stakeholders across boundaries. For energy, the benefits range from a decentralized energy transaction and supply chain, efficient, reliable and secure documentation and contract management, certification of energy, counterfeits management to efficient trading and supply chain finance, to name a few.
The Spare Parts & Asset Management Use Case
Spare parts management is a very complex multi-step, multi-stakeholder process which has multiple issues to contend with. A few of these are outlined below:
• Each stakeholder, contributing to the product supply chain journey before installation, brings its own set of systems and documents to the table. This remains an unseen dimension for end consumers.
• Unless each stakeholder confirms and transmits the required document manually, the next stakeholder cannot perform its role in this chain.
• With information flow between various stakeholders being paper intensive; the integrity of certificates is a costly process, which is prone to delays and holds no identification of the custodian in the various stages of the chain.
The issues do not stop at delays and loss of productivity. Fabricated part certificates and insurance documents are on the rise and blockchain technology can help in preventing these kinds of fakes infiltrating the industry.
Blockchain as a Solution
The initial step would be to build a distributed network with all the relevant stakeholders as individual nodes on the blockchain. The nature of the blockchain technology ensures:
• Complete accountability of the individual steps that make up the parts journey.
• Complete visibility to the stakeholders involved in the chain.
• Security of the stakeholders themselves.
Documents, shipments or invoices created by downstream stakeholders go into the blockchain as well and can confirm their transactions and actions on the blockchain.
The majority of incidents occur during transient periods. Equipment quality is critical, especially when start-ups or shut-downs can take days. Industrial plants need to be aware of blacklist suppliers or even potential quality issues from genuine suppliers to avoid severe safety issues.
If used, blockchain can be a game-changer in redefining and reinventing asset management across the board.