Tyco

Source: Manufacturing Digital

Date :11/13/2007 6:38:47 AM

Tyco Fire & Integrated Solutions supplies global systems using techniques ranging from the original pneumatic systems to state-of-the-art telemetry and control technology.

Written by John O'Hanlon and Produced by Ben Weaver

Tyco International, a former $45 billion conglomerate quoted on the New York Stock Exchange, went through a major restructuring in 2006, spinning off its healthcare division, now called Covidien, and its electronics arm Tyco Electronics. The new Tyco International describes itself as a multi-industry company with market leading businesses in electronic security, fire, safety services and products, valves and controls and related industrial products.

It is still a very large group, though now more focused, with annual revenues of $18.6 billion and 150,000 employees globally. It consists of five major divisions: ADT Worldwide, Fire Protection Services, Safety Products, Electrical & Metal Products and Flow Control. Within ADT Worldwide sits Tyco Fire & Integrated Solutions (TFIS) Oil & Gas group, which has its head office in Manchester with sites across the UK including Aberdeen, Nottingham and Norwich, as well as a growing presence in the Middle East (Abu Dhabi) and the Caspian Region (Baku, Azerbaijan & Atyrau, Kazakhstan).

Aberdeen is the centre of the Oil & Gas group’s service provision: manufacturing is the province of the Nottingham and Norwich sites, which employs over 120 people (including a number of commissioning and maintenance technicians on location at customers’ sites). The group operated for many years under the Wormald name, which Tyco acquired in 1990 and now survives as one of Tyco’s brands, says Business Development Director Richard Miller. He has been at Norwich, the manufacturing location for its Oil & Gas Production and Control Systems, for its entire life as a Tyco unit and has seen its turnover grow from $2 million to around $25 million.

“Within Tyco’s Oil & Gas group, we are aligned by products,” says Miller, who provides safety and control systems for oil & gas industry customers in every part of the world. Among the products and services that TFIS’s Oil & Gas group supplies to its customers, the major oil companies and the contractors they use (such as Bechtel, AMEC, Petrofac, Snamprogetti, Fluor, Technip, KBR, CB&I and Halliburton) are wellhead process & subsea controls, chemical injection systems, telemetry systems for remote applications, PA/GA, metering, safety and fire detection and protection systems and environmental consultancy.

Each of these is critical to the customer in its way. Lessons were learned from the Piper Alpha disaster and the subsequent Cullen Report. The platform accounted for ten percent of North Sea production when gas condensate ignited causing an explosion on the 6th July, 1988, killing 167 men. Cullen revealed faults in communication, training and the operation of the platform’s safety systems.

Critically the import risers were not isolated (from two nearby platforms) and continued to fuel the disaster for over an hour after the initial explosion. Many improvements have been made and now platforms are protected by high integrity ‘fail-safe’ safety and control systems. Tyco are a market leader in the provision of these specialised high integrity safety and control systems ranging from Public Address and General Alarm (PA/GA), Emergency Shutdown (ESD), and Fire & Gas (F&G), to Wellhead Control and Fire Protection Systems required by today’s Oil & Gas Industry.

Fiscal metering is another vital function in platforms that gather feeds from different asset owners and for different customers. A fiscal metering system is an essential supervisory system for liquid and gas flow. The system communicates with flow meters and flow computers.

“Operators often share the infrastructure that brings the oil and gas onshore, so they need a sophisticated and accurate metering system, monitored by an independent third party to within very tight tolerances. This will determine how much of each operator’s product is delivered into the network and ultimately sold to which customer,” says Miller. “With the high cost of product, a tiny discrepancy in a flow metering system can cost millions of pounds. We offer the specialised consultancy services required to enable satisfactory infrastructure sharing.”

Then there’s the chemical injection systems, without which the production wells and its pipelines would cease to flow efficiently. “If you didn’t condition a well to enable it to produce it could stop in a very short time. Often chemicals are needed to start a well flowing product and we continue to pre-treat the well and the flowlines with chemicals to ensure optimum production from its finite reserves.”

Made to measure

The Wellhead Control and Chemical Injection Systems manufactured at the Norwich site is entirely bespoke. Each well has different characteristics; they require solutions that take into consideration the local environment and well geology such as well pressure, temperature, water depth, hydrogen sulphide (H2S) content etc. Tyco supplies systems throughout the world ranging from onshore fields in the Middle East, Algeria, Pakistan and Kazakhstan to offshore fields in the challenging deep waters off the Brazilian coast or in sub-zero temperatures of northern Russia.

“We start off with a specification from the customer,” explains Richard Miller. There are a lot of questions to be answered about the prevailing environmental and production conditions. If it is a platform or land based, what, if any power is available, for example. We will then define a solution and submit our proposal.”

Assembling the systems demands rigorous skills to ensure they cope with the hazardous nature of the application. Currently the company is changing its training structure to provide two to four year training programmes to equip staff with the extreme demands required in producing these systems, for example the extreme pressure these systems have to cope with.

“If you can imagine 30 psi in your car tyre is a lot of pressure, then consider some of our systems, which have to handle in excess of 15,000 psi. We try to recruit people with good mechanical skills and some basic qualifications from City & Guilds or an HND.

About four years ago Tyco’s CEO made the decision to embrace operational exellence and related six sigma thinking. The system has been rolling out across the company since then and reached the UK in 2006. “We are in the early stages here; at Norwich we have trained two green belts and there are two full-time black belts and a master black belt within the UK and there’s a training programme to roll out six sigma and lean throughout the organisation.” The project nature of manufacturing at Norwich presents its own challenges, however a project has already been completed on the methodology of how hours worked are recorded and allocated. “It has made us more accountable, and helped us to keep track of our overheads,” he says.

While Tyco designs the systems in detail using CAD systems such as Pro/Engineer, down to the last punched hole and weld, fabrication of cabinets is contracted out to local sheet metal firms. Because materials form around 65 percent of the cost of each contract, control of the supply chain is crucial, and the advantage of Tyco’s global supply chain management is a great asset. For the UK operations, the ability to buy American made components in Sterling is an added advantage given the strength of the pound vis-à-vis the US dollar.

A shift to service

Though Tyco’s UK manufacturing, because it is so specialised, is not threatened immediately by migration to low cost centres, it would be naïve to think it can continue without change at Norwich, admits Richard Miller. “Looking ahead, as we develop business in the Middle East and the Caspian region we will expect to transfer skills to our operating bases there.” The market is driving this change.

Countries like Nigeria and Malaysia are not alone in wanting a large element of local content in the assets that support their national resource in oil or gas. “We have work here that is destined for Algeria, Kazakhstan, Qatar, Abu Dhabi, Brazil, Egypt, Pakistan, Nigeria, Russia, anywhere there is oil or gas. Of our $25 million turnover, only about $1,500,000 is destined for use in the UK. Most is for export to these global markets.”

The fact is that the current revenue split for the Norwich operation is 70 percent from capital contracts and 30 percent from service, maintenance and refurbishment projects – though the latter yield higher margins and are at lower risk financially. Tyco’s corporate Oil & Gas group split in total however is the reverse – 70 percent service and 30 percent contract – and that’s where the business case lies for the future too, concludes Richard Miller. “Tyco is looking to become a “one stop shop” for all oil and gas safety and control needs, from ESD, F&G, well control, chemical injection, environmental control to fiscal metering – and of course fire protection too!”