How GoExpedi is bringing digital innovation to MRO teams in the Texas oil country

Digital transformation may be a tired buzzword, and yet it reflects reality. Digital connection is reaching deep into sectors it has never before touched, to radically transform how they operate. You can't get more physically real-world than the maintenance store of a Texas oil refinery. Yet even here, digital-native startup GoExpedi is introducing 3-day tracked delivery, RFID tagging of inventory and an all-digital restocking process, helping to ensure critical parts are available when needed. It's a measure of the potential for change across many established industries, according to Yang Tang, the company's CTO:

That's really this next industrial revolution that we're witnessing, where the amount of impact you're able to have on industries that have not seen a digital transformation is incredible. The opportunities are really endless.

GoExpedi likes to describe itself as "the Uber-meets-Amazon of the energy industry," but the superficial parallels don't do justice to its full story. The Amazon element is an online catalog of over 200,000 parts and supplies from a range of different sources, with full transparency on pricing, supplier choice and availability. What Amazon did for books, GoExpedi aims to do for industrial parts and tools. Like Amazon, customer service is a big focus too, with parts delivered at prices that the company claims are "up to 25% less than other established players," and using GoExpedi's own last-mile transport — in the early days, that was founder and CEO Tim Neal driving his own pick-up truck to deliver supplies at a moment's notice to oil and gas rigs. The Uber element is the network of suppliers, parts and drivers, along with accurate tracking of those deliveries.

This core proposition proved itself when COVID-19 struck last year and there was a sudden need across the energy industry to source PPE items. GoExpedi was able to integrate new suppliers into its online store practically overnight, thanks to the underlying WebMethods.io iPaaS infrastructure and API management tooling on which the solution is built. This meant that, coupled with an understanding of supply levels and lead times, the company was able to honor its three-day turnaround commitments on PPE and other items to oil exploration and refinery customers in Texas and across the United States. But GoeExpedi's ambitions go much further than simply providing rapid online ordering. Tang says:

We've seen the baseline, providing great service, three-day service, providing a digital storefront — which is not terribly new — but then it's these innovations on top that are such an important part of our success.

Building a digital 'platform business'

The core likeness to Amazon and Uber is a concept that Professor Michael Cusumano of MIT Sloan School of Management describes in The Business of Platforms. He and his co-authors argue that the most successful platform businesses are those that add innovation to their core transaction platforms. Tang says this is key to GoExpedi's vision, and adds a couple other priorities too — customer education to support their transformation, and fostering open standards. Launched in 2017, the company is backed by $75 million equity and debt capital.

GoExpedi's asset management solution for Maintenance, Repair and Operations (MRO) at oil and gas sites, currently in use by a top global energy company, is an example of how the company is adding innovative solutions on top of the transactional platform. This replaces manual processes with an all-digital, integrated system that means restocking is simply a matter of scanning a code and then swiping right. It also means that maintenance teams can instantly see where to go for parts or supplies, which matters a lot on an oil refinery site, where if you don't know in advance that an item's out of stock, it's a wasted round trip of several miles to and from the shipping container that serves as a maintenance store.

Entirely cloud-based, the GoExpedi platform has adapted well to the demands of remote working. The built-in design functionality in the WebMethods.io tooling is liked by developers both within the company and at partners, enabling continuous integration and deployment (CI/CD) and a DevOps approach. GoExpedi can quickly share standards-based build patterns with partners, as Tang explains:

We're then able to share these directly with customers within the energy industry, which are the leading players, and they're using the same technologies. So allowing us to do that has been incredibly powerful, both for our team's engagement, but also for our customers' engagement, and also just ease of use.

Energy - an industry in transition

GoExpedi believes that its digital technology can open up new opportunities in areas such as asset management and preventative maintenance that haven't previously been explored in oil and gas. This is an industry that finds itself in transition from discovering new reserves to focusing more on improving its return on existing resources. In the search for margin improvement, companies are scrutinizing their operational metrics a lot more intently than in the past, says Tang. This is one of the reasons GoExpedi's ability to track and analyze spend has found favor. In the future, Tang foresees companies adding connected sensors and tools to provide more continuous digital tracking of equipment assets such as top drives and mud pumps to ensure they keep working effectively. This will open up further opportunity for GoExpedi, as he explains:

What kind of companies are going to be those that have a natural right-of-way to deploy these [digital] solutions? In the oil and gas sector, we have 25 million different SKUs. So a distributor is a natural avenue towards servicing these components.

On top of that, just like we talked about with the storefront, because we're the distributor, because we have that natural tag into these systems, the same thing exists. When we're able to distribute these components, we're then able to not only tag and therefore trace it back to their operational systems, but then we're able to give them the analytics that they need, to know when they need to reorder.

Freeing up margin also funds necessary investments in renewables and carbon capture, as the industry moves into these new growth areas of the energy market, which in turn will bring GoExpedi into servicing facilities such as wind and solar farms. The company is also looking at transportation and construction as adjacent industries with similar needs for digitalization of their MRO functions, with one major electric carmaker already working with GoExpedi to support construction of a new factory.

My take

GoExpedi is a live example of the concept of platform businesses described by Professor Cusumano. But its history also shows that a combination of technology and innovation isn't enough on its own to sell a new platform to an established industry. Building trust through industry knowledge and demonstrating a commitment to customer service is equally important. The other key ingredient is timing. An industry that's doing just fine is in no mood to learn new habits, but one that's already grappling with disruptive change is one that's motivated to do things differently.

Tang was speaking as part of an analyst briefing arranged by Software AG.