Category: Oil & Gas

Supply Chain Management and Strategic Sourcing for the Oil & Gas Industry

The Oil and Gas (O&G) industry supply chain comprises of diverse vendors, manufactures and agencies that handle businesses such as upstream exploration and production, midstream catchment areas, downstream refined products manufacturing, whole sale and bulk distribution terminals, and retail delivery units. The supply chains of this industry is highly complex and needs specialized practitioners to manage the applications that help run the business. From the oil exploration stage to the end user, there needs to be an all-inclusive supply chain model that captures the critical components and all the data in the system. Analyzing this data can illuminate issues and opportunities that can be addresses at various stages of development, production and distribution.

Contemporary O&G companies are on an aggressive growth path and they invest in new and advanced technologies to improve production, storage and distribution, aimed at enhancing their product quality and eliminating environmental hazards. The global demand & supply fluctuations and market dynamics commonly faced by these companies are challenging, and they recurrently require the ability to analyze, identify improvement areas, create new roadmap and take required actions. There are solutions from SAP designed for O&G industry customers that enable comprehensive management of operations, thereby improving business performance. These are industry solutions that deliver proven performance, scalability and improve supply chain margins.

Bristlecone, is a specialized vendor in providing supply chain management and procurement consulting and system integration services for O&G companies. It can help O&G customers to formulate supply chain models that optimizes the diverse business environment, and bring them onto a common taxonomy and an integrated management system.

An end-to-end diagnostic of operations can help to shape the profitability and unearth opportunities to increase the efficiency of O&G companies. Bristlecone is a SAP works & services partner and has a consistent and focused relationship with SAP since its inception. We are a core product and custom development partner for SAP, having co-developed solutions earning hands-on experience on all phases of SAP’s Product Development Life Cycle. The company has extensive experience on implementation and support of SAP software applications for the O&G Industry.

Bristlecone’s specialized solutions in the areas of procurement can help O&G decision makers to improve the project execution and spend effectively on capital projects. A well-integrated supply chain management systems can ensure healthy cross-functional data exchange and cataloguing for implementing best practices and bringing in additional savings by improving the planning efficiency.

The impact of global activities in the Oil and Gas sector

There have been several geopolitical activities all over the globe recently that have been plastered all over the news. A number of them concern themselves with the Middle East, which is presently one of the largest exporters of oil in the world, and definitely a key area of influence when it comes to the Oil & Gas Market. A supply chain for this sector involves some really unusual challenges, and there are a few issues that are turning out to be quite unpredictable.

Environment – An unforeseen challenge

The impact that the Oil & Gas sector has on the environment is substantial to say the least, and it is only recently that organizations around the world have woken up and taken heed of this. Now, almost every country in the world has regulations that control the kind of activities that a company operating in the Oil & Gas Sector is allowed to perform, and the ones which are explicitly prohibited. Modern day supply chain vendors need to create a secure supply chain that minimizes the impact that the company has on its surroundings.

Tackling growing decentralization in the industry

The Oil & Gas market is getting increasingly decentralized, and influence models are being deployed by company executives to manage this situation. The procurement process has essentially migrated into a hybrid mode and is one of the key aspects that the supply chain needs to account for.

Forbes has predicted that the Oil & Gas sector will see growth in 2014 despite the many challenges that the organizations in this vertical face. The influence model not only counters the decentralization issue, it ensures that aside from the core policies which cannot be overridden at any cost, local organizations are free to make decisions and act on them, saving time and improving process efficiency. The Forbes report says that the high ROI for operating fleets carrying oil ensure that these fleets will be expanded. The environmental regulations associated with the sector, while certainly a cause of many restrictions, are also a boon for those organizations that follow these guidelines. There are several relaxations that a company can avail if they follow these guidelines and prove themselves to be socially responsible.

Social responsibility and better handling of the decentralization of the organization are the latest trends that have been noticed in the world of supply chain when it comes to Oil & Gas business vertical. How well is your supply chain prepared to take on these trends and use them to your advantage?