6 Strategies to Improve Supply Chain Efficiency in the Oil & Gas Industry

Tuesday, June 23, 2020, 6:00 AM | Leave Comment

When we think of the Oil and Gas industry, the first things that cross our minds are expansive oilfields, drills, and massive oil platforms.

And to be quite honest, these three images are what the modern world is, at least for the time being, based on.

But, the story of oil and gas is far more complicated than a simple extraction.

In order to fuel other industries, oil and gas often need to travel a long distance from point A to point B. Therefore, we can conclude that to survive the potential of renewable resources and stay competitive in the oil trade market, O&G businesses need to improve the efficiency of its supply chain.

Let us take a look at a couple of strategies that can be used to further this agenda.

6 Strategies to Improve Supply Chain Efficiency in the Oil & Gas Industry

  1. Improving visibility

    In order for any supply chain to run efficiently, regardless of the industry, there needs to be a well-established level of transparency. In other words, supply chain managers need to be able to track every ounce of transported material from starting point down to the very end of the path. Without the ability to track every single available resource at any given moment, the O&G supply chain managers can’t ever hope to perform planning and risk management on the level that will comply with the modern industry standards.

  2. Harness the power of the AI

    Keeping all the things we mentioned above in mind, we have to agree that the amount of data supply chain managers need to process to create an efficient logistic framework is frightening. The sheer volume of information that needs to be taken into account imposes the greater level of automation and the use of artificial intelligence. Fortunately, the logistics industry has already produced more than enough fleet and supply management platforms that offer AI-backed automation and data analytics that can be efficiently used by O&G companies as well.

  3. Moving on to more efficient extraction equipment

    The O&G supply chain bottlenecks are not always caused by the flaws in the logistics process. A surprisingly high number of delays can be attributed to the simple absence of raw materials. Because of that, the foundations of a seamless supply chain need to be laid by cutting-edge oilfield equipment. To achieve this level of coherence, the different sectors of the Oil and Gas industry will need to improve communication and include ancillary branches into decision-making. In other words, supply needs to be based on production and vice versa.

  4. Long-term project planning

    All successful industries and business branches are based on long-term decision making. The Oil and Gas supply chains are no different. What can your business take out of this? Well, engaging in long-term planning can help you to properly assess the income, identify the areas that need improvement, prioritize the goals, and create a complex investment strategy that will keep your company competitive. However, for these strategies to be truly fruitful, the feedback needs to be gathered on all instances ranging from production down to delivery.

  5. Prioritizing customer needs

    When talking about the O&G industry-relevant figures and analysts often forget that all the efforts put into production and delivery are ultimately aimed at end-users. That is a big mistake because the needs and input of these end-users can tip the odds in favor of one company over the other. We would go as far as to say that including the customers into the decision-making process is one of the best ways to refine the global O&G supply. Without a clear assessment of current demand, small businesses can’t hope to achieve the level of efficiency necessary for sustainable growth.

  6. Training the workforce

    All the measures and strategies we have mentioned above will suffice to very little if the people who are conducting day to day supply tasks are susceptible to mistakes. And the potential for human error is truly endless. That is why every O&G company that strives to achieve a high level of supply chain efficiency needs to invest a fair share of its resources in its workforce. Well-trained, empowered, and organized staff will not only be able to perfume the work obligations with low error margin but offer valuable insights as well.

These few suggestions are far from the complete feature, but they do make an important piece of the overall Oil and Gas industry puzzle. With all troubling developments behind us, hiccups in the global economy are all but expected. The success of O&G companies will depend on how able they are to improve efficiency on all levels. Supply chains do seem like a good place to start.

About the author

Mike Johnston is an avid blogging enthusiast and experienced content writer with a focus in business, technology, entrepreneurship, and real estate.

Throw us a like at Facebook.com/doable.finance

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