Tech Talk: Pipe Supplier Networks Depots

By Elizabeth Wasserman

A company that supplies steel tubing to oil and gas companies in the Rocky Mountain region revolutionized the way the firm communicates information about inventory and supplies by networking storage yards along rail routes.

CTAP has been supplying the oil and gas industry drilling in the Rocky Mountain region with tubing products and service for 25 years from its Louisville, Colo. headquarters. Andy Carlson, CTAP's director of IT, tells IncTechnology.com that by centralizing the firm's information environment and networking its storage yards along railroad routes the firm has improved inventory management, billing, and internal communication.

Elizabeth Wasserman: How many storage yards do you manage in your business?

Andy Carlson: CTAP supplies steel tubular products, pipe, and services for the drilling rigs in the Rocky Mountain region. We have our service yards strategically positioned on rail sites, where we can receive, ship, store, manage and service our customers’ needs. The tubing products we work with generally range from 20 feet to 40 feet long and are extremely heavy, requiring loaders and heavy machinery to move. We’re currently at six yards now located in Montana, North Dakota, Wyoming, Utah, and Colorado, and expect growth this year.

Wasserman: What was the issue with communications between the yards?

Carlson: This business has grown by acquiring other businesses and locations over 25 years. As a result, we have very different methods of management, communication and culture in each of these locations. The first task was to be able to standardize our method of inventory management, so we would know how much tubing has come in, how much has gone out, where it's gone and who it's for. Historically, this was accomplished on spread sheets and e-mailed into the corporate office on a weekly basis. We used that to assemble our billing packages for customers, but there was latency issue in the timing of the bills and the fact that we had no auditing trial at all. The communication of inventory information was not part of an efficient process and did not leverage available technology.

Wasserman: What did you do?

Carlson: I started at CTAP a year ago, and the first priority was to create a perpetual inventory management system. We needed a centralized information application and a centralized information environment. Given that I was the only IT person at that time, I needed a cloud based solution, and the expertise to design, build and implement it fast. I chose 3T Systems because they provided both of those services, and had worked well with them in the past. We developed our network environment based on Citrix. It allowed all of us including main office and yards to communicate on the same platform, through e-mail, file sharing, and application sharing. Today, we use the same working environment and we've been able to be consistent in the way we work. The second thing we did with 3T was to develop an inventory management application specific to when the product comes in and out of the yards. It's a perpetual inventory management system so we can bill faster and have accuracy in terms of reporting, both internally and back to our customers. Our customers were asking questions such as, 'How much of our tubing do you have at the Montana yard?' It would literally take three days to figure out. Someone would have to go out and count and report back.  The spreadsheet would need to be re-keyed in, then adjusted for any last minute inventory level changes. Today, any one of us can get that information in 10 seconds.  Shortly, customers will be able to get that information on demand through our customer portal.

Wasserman: What are the improvements that you've noticed?

Carlson: It's revolutionized the way we communicate, forecast and implement decisions. It’s contributed to our profitability in that we are able to assemble billing packages much more quickly.  It’s allowed our management team to monitor the inventory levels from a macro level, and respond to new business accordingly.  It’s allowed our sales team to monitor the inventory levels at the micro level, and respond to customer inquiries in real-time. It's reduced a lot of errors and inefficiencies. Finally, we now have a competitive advantage over other businesses that provide similar services because of our information system. That's a big improvement for our customers because sometimes we store some of their inventory, and the confidence they gain in our processes They like to know how much of their inventory is in our yards at any given time, and they now have the tools to get that information a lot quicker than they use to.