As potential earnings soar from record energy prices, the stakes are growing higher than ever for oil and gas companies. If equipment goes missing or fails, production slows or shuts down completely, costing companies millions of dollars.
Radio frequency identification (RFID), a system made up of rugged readers and tags that wirelessly transmit detailed location information, is playing an increasingly important role in helping oil and gas companies run their businesses more efficiently in today's fast-changing economy. This technology is an improvement over today's bar code technologies as it increases automation and reduces manual processes, while withstanding the harsh weather and environmental conditions specific to this industry. More importantly, the real-time track and trace capabilities of RFID offers companies a better way to capture mission critical data to ensure product quality, track assets, meet industry mandates and be more competitive.
According to technology analyst firm, VDC, the oil and gas industry spent approximately $104 million in 2007 on RFID solutions to help refineries, rigs, manufacturers and distributors gain greater visibility into their valuable drilling equipment, while also helping to safeguard mission critical parts from tampering and counterfeiting as they travel from one destination to the next.
There is no doubt that one day, RFID will be the tracking technology of choice for the industry, but what does that mean for oil and gas drillers looking to adopt this technology today? Consider the use of RFID in the following scenarios from industry experts.
A Better Way to Track Assets -- From the Manufacturing Floor to Corporate Headquarters
RFID brings new levels of strategic and operational decision-making to oil and gas companies. "Recording the movement of assets to ensure that they go through all quality control steps is vital to our industry, but it can be cumbersome for floor workers," said Konrad Konarski, president of Merlin Concepts and Technology, a company that designs inspection and quality control solutions for oil field product manufacturers and oil providers. "No other data-capture technology can enable the sort of seamless, automated tracking in the way that RFID can."
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| Tejas Casing Ltd. |
Konarski's company, along with Motorola and industry integrator, Ship2Save, designed and implemented an RFID system for Tejas Tubular Products, a leading oil field drill pipe, tubing and casing manufacturer. The system uses RFID tags and readers to provide real-time visibility of components moving from manufacturing into various staging areas. RFID readers identify where the products move and captures data in real time about what inspections they pass. The information is then displayed on a large screen in Tejas Tubular's sales office so that staff can share the status of an order with customers who request it. At the same time, the system gives floor workers information on wirelessly-enabled mobile computers to validate orders and shipping information. With every step of the manufacturing journey recorded through RFID, a full history of any product is available to customers at any time.
"Before RFID, we had to manually correlate all of this information," said Max Tejada, Chairman and CEO of Tejas Tubular. "But now, this process has been automated, similar to a toll road, where each piece of a pipe is accounted for, like a car going through a toll booth. We automatically know which checkpoints every product has been through. RFID gives us by far the best traceability."
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