ROI Analysis: Jovix on Offshore Fabrication Services Site
The Jovix Material Readiness Solution is deployed at an EPC firm’s offshore construction services site in coastal Texas and has been used on this site since Q2 of 2011. Jovix is currently being used in the following functional areas: Material Receiving, Material Requesting, Material Locating, Material Picking, and Material Issuing. Because of cost savings realized through a Track and Trace implementation, this project has recently added the Jovix Inspections & Preventative Maintenance module to their deployment.
This ROI analysis and case study will provide details regarding the cost savings made possible through improved efficiency, accuracy, and reduced direct and indirect labor hours.
Client personnel collected and provided to Jovix several key data points used in this case study, including the following:
- The average time to locate a piece of material was 0.75 work hours (45 minutes), and the average work hour cost is $65.00.
- The client estimates that 0.2% of pipe spools are temporarily lost and require re-procurement at an average cost of $2,000 per spool.
- The client estimates that 0.1% of owner-furnished equipment items are lost and require replacement at an average cost of $4,000 each.
Atlas personnel gathered the following data directly from Analytics and Reporting contained within Jovix:
- At the fabrication facility, a total of 71,624 material items have been tagged using active RFID and input to the Jovix solution.
- At the fabrication facility, a total of 66,173 RFID-tagged items were picked in the first 4.5 years of the deployment. Not a single piece of tagged material has been lost in that time.
Analysis of the data points above result in the following conclusions:
- The client saves 0.667 work hours each time a piece of material is located with the assistance of Jovix and active RFID.
- Saving 0.667 work hours per Material Location transaction has saved the client a total of approximately $2,867,496 over 66,000+ transactions.
- With no tagged materials lost or temporarily lost, the client as avoided a total of $264,692 in material re-procurement costs.
Summarizing the data above yields the following results:
Total Investment in Jovix
Total Labor Savings
Total Investment in Jovix – <$1,019,043>
Total Labor Savings – $2,868,930
Cost Avoidance – $282,496
- The average time to located a piece of material dropped from 45 minutes to 5 minutes with Jovix. The average work hour cost is $65.00.
- The client estimates that without Jovix, 0.2% of pipe spools would be temporarily lost and would require re-procurement, at an average cost of $2,000 per spool.
- The client confirmed that no pieces of equipment equipped with auto-ID (active RFID tag) have been lost prior to delivery to the workface.
- To date, this client has invested $1,019,043 in Jovix and has saved $2,869,000 in labor costs due to efficiency gains in material location.
- Additionally, the client has saved approximately $282,000 in Cost Avoidance through a significant reduction in temporarily lost materials and consequent re-procurement costs.
Savings Through Additional Functionality
The time and costs savings realized through the implementation of Jovix RFID technology for Track and Trace and improved material locating processes are obvious. These savings justify expanding the use of Jovix for processes and activities that result in additional cost savings.
Savings Beyond Location
Jovix improves the efficiency of many activities and processes related to the material lifecycle at a fabrication facility, supplier, warehouse, and at the workface. The initial and presumably greatest investment in hardware has already been accounted for and justified through the savings realized in the Material Locating process. Therefore, incorporating additional Jovix functionality could result in similar cost savings. Additional investment will be much lower than the initial commitment, and therefore the total savings should be more significant.
Jovix Mobile templates are configured to guide personnel through a digital inspection workflow that can require the inspector to take pictures, digitally record a signature, and automatically record the GPS location and date/timestamp when the inspection was completed.
Inspections & Preventative Maintenance
The path forward at this facility included Inspections and Preventative Maintenance functionality. The implementation was so successful that Jovix became the district standard for Material Readiness and Inspection and Preservation activities. Jovix functionality is now sold as a value-added service in this fabricators standard “tool-kit.”
Unlike most Preventative Maintenance solutions, Jovix contains Preservation functionality within the application. This tight coupling of the two functions drives efficiency by enabling material management activities, such as Receipt, to automatically trigger an Inspection task. In addition, Preservation activities are able to automatically update material management information. For example, if a material fails inspection, Jovix can automatically place that material into quarantine status.
With the Jovix Preventative Maintenance functionality, the client is able to perform the following tasks:
- Build Inspection Templates
- Upload Requirements from Suppliers
- Create Recurring Inspections
- Set Reminders and Alerts
- Assign Inspections to a User
- Locate Equipment Requiring Maintenance
- Collect Pictures and Digital Signatures
Performing Preventative Maintenance with an auto-ID enabled, mobile Material Readiness Solution decreases indirect labor costs by reducing time spent locating assets and by eliminating manual data entry. Jovix also has the ability to streamline P&M Scheduling, Inspections, and Reporting, eliminating the need for personnel dedicated to those functions.
Additional functionality includes the following value-added services:
- Integration with ERP tool
- Fabrication Tracking – Including the Use of Active and Passive RFID Tags
- Integration with Steel Fabrication Software
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