Software solutions

IBS’s Deepak Garg on how to keep revenues in synch with your costs, even in times of a global crisis.

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By  Edward Attwood Published  November 19, 2008

How can you keep your revenues in synch with your costs, even in times of global crisis? IBS’ Deepak Garg has the answer.

Logistics is an expensive business. In the current climate, the need to save money has become key, and any solutions that allow operators to cut hard-earned dollars from their bottom line via efficiencies will obviously be of great interest not only to industry giants but also to start-ups breaking their teeth in what is becoming a more and more competitive market.

The focus of India-based IT solutions outfit IBS Software Services is on streamlining operations, and the operator has spent a significant amount of time investing in building a portfolio of solutions for a specific number of markets.

Any product spends about 90% of its time in transit actually stationary - it is crucial to optimise the flow of information to lower this figure.

Specialising in differentiating ideas from other services, the firm provides its solutions to a sector on which one out of every 10 dollars is spent worldwide. But finding ways to promote efficiency in such a vast and diverse sector is naturally difficult; each company will understandably seek a tailor-made solution that will allow his operation to run smoothly.

The trick is to find a product that can offer companies diversity while at the same time continuously adding value and still providing an excellent service to the customer. In this sector, a small error of any kind, or a bad decision, can result in lost revenue, and client retention is thus of paramount importance.

With a workforce of about 2000, the company has now been in existence for about 10 years and sees the Middle East market as generating around 20-25% of its business. "Some of our highest growth rates have been witnessed in this region," says Deepak Garg, IBS' chief operating officer for the company's Middle East and Africa region. The company has three other major areas of operation: North America, Europe and Asia Pacific, IBS' largest, which covers the emerging markets of India and China, plus Japan and Australasia.

IBS offers logistics services primarily to the airline, airport and oil and gas industries. "From the logistics side, we place a focus on ocean and surface transportation, particularly for the oil and gas upstream sector," continues Garg.

"For example, we implement the logistics management solution for Shell worldwide - that's 32 operating countries in which we support upstream exploration and production. Our other customers include Chevron in a couple of locations, plus BP and ConocoPhillips in the US."

In terms of services, IBS offers a complete management of the marine, aviation and logistics needs for these giants, covering the movement of both men and material, a product that Garg rightly points out is a huge commitment.

"In the Gulf of Mexico, there are about 4500 rigs and platforms, about 200 of which are permanently manned, but whether the facility is manned or otherwise, there is always constant movement," he explains. "Some of these platforms are as far as 250 miles into the Gulf of Mexico and the entire network is served by a fleet of some 2100 helicopters and 900 ships."

However, when IBS was offered the chance to look at the logistics of inter-rig operations, it found there was absolutely no optimisation of resources. For example, a mechanic might need to be flown out to a rig by one company, while a cook would need to be transported back to the mainland by another.

Due to the lack of collaboration between companies, two helicopter trips would be made, thus adding substantially to cost, especially given the recent high price of fuel. With manned rigs costing on average about US$400,000 a day to run, such operations are a needless expense. "The more optimised the movement, the better it is for suppliers," observes Garg.

"We came in and created resource optimisation by creating a transportation portal through which companies could let each other know about these operations and resources could be shared. Logistics management in the Gulf of Mexico is worth about $2 billion a year, and if you make a 20% saving on that figure, you are cutting costs by around $400 million."

Not surprisingly, Garg feels that IBS' solutions have a lot to offer upstream activities in the Arabian Gulf.

The upstream solution, named iLogistics, was started five years previously in conjunction with a consortium entitled Gulf Share. As with products designed for other sectors, IBS used an innovative concept, which it has termed the ‘Core Group of Influence'.

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