Within this framework, the identification of critical suppliers holds significant importance, ensuring that the products and services provided meet the stringent requirements of the industry.  In this blog post, we will delve into the nuances of identifying critical suppliers as defined by the API specification Q1 standard.

Understanding API Specification Q1
API Specification Q1 is a quality management system standard designed specifically for organizations within the petroleum and natural gas industry. It outlines the requirements for the design, development, production, installation, and servicing of products and services. Adherence to this standard ensures that companies maintain consistent quality, safety, and reliability throughout their operations.
 
Defining Critical Suppliers
Critical suppliers, as defined in API Specification Q1, are those whose performance directly impacts the quality, safety, and reliability of the final product or service. Identifying critical suppliers is a crucial aspect of risk management within the supply chain, as failures or deficiencies in their products or services can have significant consequences for the organization and its stakeholders.
 
Key Criteria for Identifying Critical Suppliers

1. Impact on Product Quality: Critical suppliers are those whose products or services directly affect the product quality. This could include components essential to the functionality or performance of the final product.
2. Risk of Supply Interruption: Suppliers whose failure to deliver could result in production delays or disruptions are also deemed critical. This criteria considers factors such as supply chain resilience, geographic location, and alternate sourcing options.
3. Compliance and Regulatory Requirements: Suppliers must demonstrate compliance with relevant industry standards and regulations. Critical suppliers are expected to adhere strictly to these requirements to ensure the integrity and safety of the final product.
4. Track Record and Performance History: A supplier's track record and past performance are indicative of their ability to consistently meet quality and delivery expectations. Critical suppliers should have a proven record of reliability and adherence to contractual obligations.
5. Technological Expertise and Innovation: In industries as dynamic as oil and gas, technological advancements play a crucial role. Critical suppliers often possess specialized expertise or offer innovative solutions that contribute to the competitiveness and differentiation of the final product.

 
Implementing Effective Supplier Management Practices
Once critical suppliers have been identified, it is essential to establish a robust supplier management process to mitigate risks and ensure ongoing compliance. The process should include:

• Supplier Performance Monitoring: Regular performance evaluations and audits help track critical suppliers' adherence to quality standards and contractual obligations.
• Continuous Improvement Initiatives: Collaborative efforts to identify areas for improvement can strengthen the relationship between the organization and critical suppliers.
• Risk Mitigation Strategies: Developing contingency plans and alternate sourcing arrangements can help mitigate the impact of potential supply chain disruptions.
• Communication and Collaboration: Open and transparent communication fosters a mutually beneficial partnership between the organization and its critical suppliers.

 
In the highly regulated world of oil and gas, the identification and management of critical suppliers are essential components of ensuring product quality, safety, and reliability. By adhering to the guidelines outlined in API Specification Q1 and implementing effective supplier management practices, organizations can strengthen their supply chain and maintain a competitive edge in the market.
 
For more information on how Accupoint Software can help manage your critical suppliers and improve supply chain management, we invite you to schedule a discovery session today.

What services have updated requirements in API Spec Q2?

API sets the standard to which Service and Supply Organizations (SSO) must adhere for best practices and claim API certification. In the API Spec Q2, 2nd edition, those services include:

• Drilling
• Field Production
• Well Closure
• Repair and Maintenance
• Construction
• Abandonment

 
Since the initial Q2 release in 2013, 150 sites have been able to claim API certification. Nearly a decade later, the API Spec Q2 2nd Edition is released, offering an even higher safety and environmental standards for organizations to meet.
 
Those organizations who were Q2-certified from the 1st edition, have six months to comply with the 2nd edition and maintain compliance.

What’s changed from the 1st Edition to API Spec Q2 2nd Edition?

The latest edition of Q2 for SSOs simplifies how it overlaps with the API Spec Q1standard for manufacturers, making it easier for collaborators to meet both specs and improve efficiency.
 
The API Spec Q2, 2nd Edition also updates employee requirements, ensuring workers have the knowledge and skills to safely perform their duties.
 
Finally, the new Q2 works in conjunction with many of the UN’s Sustainable Development Goals, improving the industry's stance on environmental protection.

Begin Your Transition to API Spec Q2, 2nd Edition.

Our integrated SAM™ solution is packed with 43 integrated modules and 55 pre-defined reports that align with the new Q2 standard.. Contact Accupoint today to find out how we can help streamline your transition to API Spec Q2, 2nd Edition.

• ​Identify a list of metrics and KPI’s that are important to monitor

Key performance indicators and defined metrics are important to monitor because most companies are dependent on suppliers and the global supplier network makes it difficult to manage and track supplier performance. As a result, failure to manage and monitor supplier performance can lead to major supply chain disruptions, delivery problems, poor quality, and other issues that damage a company’s credibility, as well as the bottom line. 

• Measure and track costs of supplier quality

Tracking the costs associated with supplier quality helps to determine business productivity and measure the impacts associated with doing business with a supplier.  By tracking costs, companies reduce risk associated with doing business with certain suppliers, maintain a competitive business advantage, and track ROI.  

• Maintain a corrective action plan

Maintaining a corrective action or preventative action plan is very important in dealing with any potential problems or future incidents. The results of the corrective action process should be to implement a corrective action to remove identified problems, improve product quality and improve the overall effectiveness of the quality management system.

• Create a supplier risk scorecard

Companies can configure a scorecard to meet specific needs. Set thresholds for acceptable, moderate, and severe risk levels. With multiple categories to choose from, companies can measure and view overall supplier risk.

• Maintain a collaborative environment and enforce supply chain audits

With so many different and new suppliers in the oil and gas industry, the risk associated with doing business has increased and it is more important than ever to reduce that risk in the supply chain by increasing the number, frequency, and duration of audits performed. By maintaining awareness and collaboration creates effective relationships to minimize and track risk.
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Accupoint’s family of compliance solutions can help implement all of the best practices suggested above.  To find out how Accupoint Software can help manage your supply chain requirements , please contact us today.

Over the last decade, worldwide shale production has expanded, producing more than 40 billion cubic feet of dry shale gas per day, according to research from BP. The search for clean alternatives to coal has pushed demand for gas across the globe. Established shale producers may soon need to scale up in order to meet the demands of this growing market.
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In order to ensure their place in this growing market, shale providers should consider the following industry problems and solutions: 

1.  Equipment and technology demands.
By developing advanced drilling technology and techniques small energy companies that wish to take advantage of the healthy shale market and scale up their workflows must pursue similar strategies. Tracking the cost and productivity of old and existing equipment can help companies make informed decisions about what should be upgraded, and when. When it comes to meeting customer expectation, equipment management is paramount, and centralized control of maintenance schedules and downtime tracking ensures that providers will meet production obligations and avoid costly downtime due to equipment failures.

2. Supply chain and vendor management.
Shale industry supply chains differ from those associated with more traditional energy products. Upstream workflow components center on complex infrastructure and require wide degrees of support, including specialized waste management and transportation services. The average shale pad contains more than 20 moving operational parts, all of which must operate together.

Configuring supply chains of this magnitude is no easy task.  Constructing processes on an as-needed basis can institutionalize inefficiencies and cause problems down the road. Communications solutions that push for point of contact cooperation with vendors and suppliers go a long way to developing effective processes that foresee future growth, and management resources that build upon vendor feedback capitalize on provider expertise and promote mutually beneficial relationships.   

3.  Workforce training.
Specialists from a variety of industries must collaborate to get shale extraction sites up and running. From the construction teams to drill operators, these workflows are critical to operations. Companies ramping up their shale operations need to cultivate and expand their talent pools to meet the needs of this industry niche.

In the current employment market, upskilling existing talent maybe the only workable solution. Oil and gas organizations can divert workers from verticals with declining prospects and retrain them for work in shale production teams. This move allows energy firms to boost their shale output without investing immense amounts in hiring and recruitment. Internal solutions that standardize training procedures and ensure constant upkeep of current training demands can weaponize a company’s current employee pool to meet the market and consumer demands.

Together, these strategies can help businesses in the oil and gas industry take advantage of the continued acceleration and intensification of the shale gas revolution.  To find out how Accupoint Software can help maximize your company’s growth potential, please contact us today.

How well do you know your supply chain?  A supply chain is only strong as its weakest link. When it comes to controlling your suppliers, the better you are at understanding the entire chain and identifying weak links, the better your company will be in the long run.
 
The recently released API Spec Q1 9th Edition – Addendum 2 focuses on supply chain controls, specifically relating to multi-tier suppliers. As you are aware, Q1 has always required us to manage our supply chain.  However, the revised requirements expand the controls to include associated (tier 2 & 3 level) suppliers that are essential for product realization.
 
To that end, in today’s post we will focus on a couple of tips to improve the effectiveness of your supply chain controls.

• Understand the big picture. Gather performance data on each supplier in the chain and update it constantly.  If your data only includes some vendors or incomplete performance data, the picture of your supply chain is as incomplete as a jigsaw puzzle missing half the pieces. Without concrete data, you may have an idea of potential snags but ultimately you are guessing.  As a result, you're not able to make the best decisions on how to resolve issues that could impact operations.

 

• Use integrated technology to manage your supply chain.  Technology enables more efficient and effective data collection and analysis, giving you increased response time to head off potential problems.  In addition, by using integrated technology you can improve communications with relevant stakeholders resulting in minimized disruptions to production.

An efficient supply chain control program enables your company to reduce costs, minimize risk and satisfy customer expectations.  For more information on how Accupoint Software can help your organization to improve your supply chain control program, please contact us today.