Engineering product development is undergoing rapid change. Products are becoming complex while development & launch timelines are getting crunched, with expectations of reduced product and product development cost. Oil & Gas (O&G) has adopted technology and has implemented best practices to address these challenges, without lowering the bar on safety, performance, and reliability.
The O&G industry is especially demanding. “Equipment uptime is important,” says Mahesha Udipi, Chief Consulting Engineer, Baker Hughes, “The cost of failure can be $300,000 to $400,000 a day. In addition, oil prices have dropped – 21% in 2020 – leading to pressure on producers.” Mahesha, an expert in high-pressure oil well completion equipment, refers to products such as wellheads and X-mas trees which can withstand pressures up to 15,000 psi and are expected to produce hydrocarbon in a controlled manner and seals/ tools, where innovation in manufacturing and quality testing can bring down costs considerably. His organization has been providing oil drilling, formation evaluation, completion, production, and reservoir consulting, using technology that other industries can also emulate to develop complex engineering products. Some examples he articulated
Virtual validation significantly reduces the cost of physical testing of products. Virtual product models are created and simulated for multiple product designs and the most optimum one is chosen. This ensures the number of physical testing of the products is brought to a minimum. However, this needs rigorous work to establish the correlation of simulation results with the physical test data. Once the virtual model is calibrated with the physical test results, product qualification can be accomplished faster. Virtual validation is also helpful when there is a need to change the material or features of the product, to meet customers’ requirements. These changes can be done on the virtual models. Simulation is performed on these virtual models using real-world conditions and simulation results are taken to create the physical products with no/minimum iterations. This helps bring down development time and cost without compromising quality.
VAVE or Value Analysis and Value Engineering is a tool used in the industry for “should-cost” evaluations. An accurate idea of what a product should cost, based on materials and other parameters, is invaluable when negotiating products. However, VAVE delivers a snapshot of value at a particular time. This is why products should be re-evaluated from time to time. Re-evaluation is helpful in several ways. For example, a product considered expensive some years ago may be considered affordable today and can be put back into the market.
Best cost country evaluation is critical to sourcing decisions. It helps identify where a product or a component should be sourced from. Should it be China? Eastern Europe? The US? The tool provides accurate answers. However, as the capacity for production is used up in one location, the title of “best cost country” may move to another nation.
Additive manufacturing is coming to the rescue of many industries where wastage of raw materials needs to be controlled, where time to market is important and where the number of product units required may be so low as to make traditional large-scale production processes expensive and impractical. Take the example of a product made from nickel-based alloys. Such a product needs to be carved out of a large chunk of the alloy, leading to material wastage. Using additive manufacturing, the wastage can be reduced to zero while manufacturing as many units as required. The time and cost benefit is significant: Conventional manufacturing may never match the pace of production of additive manufacturing and the cost can be 10 times less. However, additive manufacturing is not a mature process and has limitations. The industry lacks standards to evaluate parts and guarantee the properties of the manufactured units. API (American Petroleum Institute) and NACE (National Association of Corrosion Engineers) are working on creating industry standards to overcome these challenges and meet the regulatory requirements, but this will take time. In addition, additive manufacturing machines may not be available to deliver the tolerance, surface finish, or the massive size of the products industry such as O&G demands. However, additive manufacturing currently has applications in drilling equipment, and structural parts which are not exposed to hydrocarbons, once industry standards are established, this technology will see wider usage in O&G industries.
Automation is becoming a major component in driving efficiency and lowering costs in product delivery and in ensuring predictability. The O&G industry has an extreme example to help understand the role of automation in developing complex engineering products. Today, there are small hydrocarbon formations dispersed across the world. They do not merit full-sized platform development. Therefore, small unmanned platforms are created that drill, extract and divert the produced hydrocarbons elsewhere for processing. O&G organizations cannot have someone visit these platforms periodically to maintain the equipment. Products used on these platforms should not only have a long mean time between failure but should have sensors embedded in them for automated and remote monitoring and management. Reliability & Automation play a major role in meeting such demanding requirements.
Collaboration has become an essential practice to master in product development. This has been made necessary because it is impractical to assemble a complete product development team under one roof. Teams and skills are dispersed, and product development now moves from one team to another, in a follow the sun model, to ensure faster development. However, it is impossible to simply “switch on” a dispersed team and expect a product to emerge. Creating a dispersed but well-integrated team that understands the product and jargon takes great communication and patience. However, once clarity in communication and an understanding between teams is established, complex product development can be achieved at reduced cost and within faster delivery cycles.
The bottom line is that the practice of manufacturing complex engineering products has changed. Today it can draw upon a host of tools for simulation, testing, manufacturing, Collaborative product development involving partners distributed across the globe in different time zones by tapping into their qualified talents and to function within business constraints. Several product designers are examining and adopting these practices—which is the logical way forward to embrace change with confidence.
Chief Consulting Engineer,
President, Manufacturing & CPG ,