Raising Accountability for Oilfield Equipment with Asset Tracking Software

Asset tracking software for oil field equipmentAccording to the Association of Energy Service Companies (AESC), oilfield thefts amount to an estimated $1 billion USD annually. Stolen equipment ranges in value from $100 to $10,000 USD or more per item and includes laptops with proprietary information, control panels, pipes, valves, heavy equipment and anything else that isn’t bolted down, as well as some things that are.

Clearly, there’s a problem. What’s interesting is that many of the well service companies we’ve contacted deny ever having anything go missing, whether stolen or unknowingly misplaced. I suppose it’s not surprising really. We’ve seen this scenario before.

TrackAbout got its start in 2000 providing asset tracking software to the packaged gas industry.  At that time, most distributors relied on manual, paper-based systems to keep track of the assets moving in and out of their business, and many didn’t think they had a problem either. Well, they knew they had to keep purchasing new cylinders, even though their business wasn’t growing at the same rate. And they knew that customers often complained that invoices were inaccurate. But these were the consequences of doing business and they didn’t believe software could correct them.

There were a few industry leaders, however, who understood the value tracking software could offer and implemented TrackAbout. Most realized a return on investment in less than one year. So what results did they achieve?

Improved Utilization

New TrackAbout customers are often surprised to discover the amount of equipment sitting idle at their facility or at customer sites instead of generating revenue. Asset tracking software provides visibility which enables better inventory allocation. Improved utilization means they don’t need to purchase new equipment as often. Over a period of 6 years, one of our packaged gas distributors saved over $20 million by not having to purchase new cylinders.

Increased Income

Asset tracking software maintains accurate equipment rental balances and catches undercharged equipment. Prior to implementing our software, Argyle Welding Supply experienced a situation where a 2,000 pound carbon dioxide bulk tank was installed at a customer site and wasn’t added to the customer’s account. According to President Jim Wright, “It was about two and a half years before we discovered it. With a rental fee of $175 per month, we hadn’t billed for over $5,000. TrackAbout enables us to do a better job. We will never forget to bill for a bulk tank again.”

Fewer Customer Disputes

Asset tracking software creates a culture of accuracy which reduces billing errors and minimizes customer complaints. With TrackAbout, Butler Gas increased tracking accuracy and gave customers access to their own cylinder records, providing a single, shared view of the truth. “Because our customers trust us and believe in our system, they’re more likely to be lifetime customers,” said Executive Vice President Sandy Gobrish.

Theft/Loss Prevention

In the packaged gas industry, it’s common for as much as three percent of distributor-owned cylinders to disappear each year, either by accident or theft. Scanning the equipment at key touch points and recording proof of delivery with electronic signatures creates an audit trail that promotes accountability. We have several reports of our customers catching employee theft. Additionally, asset tracking software keeps an accurate database of serial numbers which can be used to identify equipment that has been recovered after being stolen or misplaced. TrackAbout users are able to credit the original customer when equipment is returned by someone other than the person who rented it.

These successes convinced other distributors to follow. Today, most distributors we contact, from small mom-and-pops to large multinational organizations, understand that asset tracking software is a necessity.

I suspect that the oil and gas industry will follow a similar path. So long as nothing seems to be wrong, some companies will continue operating with their manual systems, never knowing how much money they’re actually losing. But if you’re one of those forward-thinking industry leaders, I encourage you to learn more here.