Supply chain management issues in the oil and gas industry pdf

The top 8 supply chain management certifications cio. The energy industry is likely to continue to struggle in the wake of a precipitous drop in oil and gas prices and share prices due to dampened demand from the effects of covid19 and recent failed negotiations between opec and russia. The oil and gas industry is involved in a global supplychain that includes domestic and international transportation, ordering and inventory visibility and control, materials handling, importexport facilitation and information technology. Thus, the industry offers a classic model for implementing supplychain management techniques. In the oil industry, the supply chain network is composed of shipping via vessel, oil tankers, and. Most industries are now relying on the third party. Pdf supply chain management in the petroleum industry. In an effort to manage their supply chain and reduce costs, oil marketing. With multiple freight handoffs, service gaps, and surging demands, global ceramic proppant manufacturers have one of the most complex supply chains in the oil and gas industry. Nov 17, 2017 the nonhydrocarbon supply chain is very critical to deliver the equipment and services required to find, extract, refine and finally market the oil and gas. Supply chain management represents one of the important issues facing the oil and gas industry today.

Supply management understanding transport, logistics and warehousing supply chain integration day 3 supplier collaboration and relationship management the importance of strategic supplier relationships. Challenges in managing oil and gas supply chain an. According to a survey from the institute for supply management ism, around 57% noted longer lead times for tier1 chinasourced components. These industries are growing so rapidly that conventional methods have quickly become obsolete, and projects are of such a large scale that.

Present studies focus on individual stages of its supply chain and do not consider all dimensions of. This paper also discusses the application of the uniform commercial code ucc to supply chain management issues. Now customers tell suppliers how and when they want their inventory delivered. Supply chain managers play a critical role in the industry by ensuring that goods and supplies reach offshore and onshore destinations in a safe and timely manner. The purpose of this paper is to investigate the role of supply chain management in the oil and gas industry. The findings show that challenges facing supply chain management in the oil marketing companies in kenya occur in one or more of the supply chain components.

The business world is that of supply chain management, which deals with every aspect of product development and distribution. Challenges facing supply chain management in the oil. Here are eight supply chain management certifications to help demonstrates your skills and elevate your scm career. The paper also considers advantages from implementation of supply chain management. Connect with an advisor now simplify your software search in just 15 minutes. Then, several strategies are examined for improving supply chains in the oil and gas industry. The cost cutting required to address falling revenues has. Procurement and supply chain strategies are set to be in the forefront of critical issues plaguing oil and gas companies, especially with the current downward spiral of oil prices. Exploratory interviews were conducted with five supply chain experts in the industry. Search programs the world of big business and international industry will never become less complicated. Procurement and supply chain strategies are set to be in the forefront of critical issues plaguing oil and gas companies especially with the current downward spiral of oil prices.

The energy industry is likely to continue to struggle in the wake of a precipitous drop in oil and gas prices and share prices due to dampened demand from the effects of covid19 and recent failed negotiations between opec and russia looking ahead, this environment of depressed oil prices, and revenue, and production declines will likely continue to present major. Supply chain management scm is the process of shepherding materials through the many phases of a companys opera. The oil industry is one of the few truly global industries. Hence effectively planning inventory levels in the downstream supply chain is a short to midterm horizon problem encompassing demand forecasting, maintaining refinery efficiency, transportation planning, and the market outlook of prices. Dec 24, 2019 the oil and gas industry needs supply chain contractors and an efficient relationship with thirdparty providers in order to deliver the desired outcomes, meet budget specifications, and create a safe working environment for employees and operations. Like the oil production situation, the major oil refineries have not stopped buying oil from the exploration companies. There is remarkable research interest in supply chain process disruption in the oil and gas industry. The driver behind supply chain management is to remove inefficiencies, excess costs and excess inventories from the supply. Api has created supply chain models for both oil and natural gas to communicate, in the simplest terms, how the industry works from the identification of resources to the end user. In general though, there are a number of opportunities to use supply chain. It needs to be managed effectively and efficiently in order to attain the optimized results and achieve the strategic, middle management and operational objectives that reflect our business needs. White senior writer, cio supply chain management is a growing field and a satisfying profession, as a recent s. Furthermore, we have also found in exxonmobil the predominant silos culture of the industry in the organization of the different parts of the supply chain, even if a progressive shift towards an integrative supply chain perspective is occurring. This sector provides support and services directly to both operators and contractors.

However, the effectiveness of these mechanisms appear doubtful given the numerous shortages of refined petroleum products, product adulteration, and the attendant socioeconomic consequences. You may have heard about the importance of good supply chain management scm, especially for a multinational firm. May 21, 2020 procurement and supply chain strategies are set to be in the forefront of critical issues plaguing oil and gas companies especially with the current downward spiral of oil prices and covid19. Best practices in oil and gas supply chain and procurement.

The importance of a dynamic and collaborative supply chain supply chain modes in the oil and gas industry demand vs. Operators tier 1 supermajor oil and gas companies and national oil companies. In the oil industry, the supply chain network is composed of shipping via vessel, oil tankers, and pipelines that may run across multiple countries. The supply chain is the active management of supply chain activities to maximize customer value and achieve a sustainable competitive advantage. Supply chain management in the oil and gas industry is characterized for being very complex and difficult to manage.

May be required to participate in outofhours rota and support in emergency situations. Supplychain management issues in the oil and gas industry. Supply chain management is the process ofoordinating the different phases of moving materials through the production process. Hasnan, journalinternational journal of supply chain management, year2014, volume3, pages7076. Five strategies to transform the oil and gas supply chain. Implementation of supply chain management in the oil industry can help to reduce costs, increase the companys. Table1 era in the evolution of supply chain management s. Management of supply chain certificate illinois central college. Technology leader saps erp operations solution has become the software backbone that contributes to companies efficiency in the supply chain. Apr 23, 2020 the supply chain for the oil and gas sector is at breaking point as the impact of the coronavirus hits an already challenged industry, according to a report.

An integrative framework for sustainable supply chain. This oil industry is strategic as the base of transportation and other essential activities of the economy of any country. Supply chain disruption in nigeria oil and gas sector. Supply chain activities cover everything from product development, sourcing, production, and logistics, as well as the information systems needed to coordinate these activities. But certain innovations in transportation and logistics are enabling these shippers to plan more effectively and manage risk. Api has created supply chain models for both oil and natural gas to communicate, in the simplest terms, how the industry works. Supply chain management is a reverse of prior practices where manufacturers supplied product to customers. Dauda, business school, university of hull, hull hu6 7rx, uk y. The oil and gas industry is involved in a global supply chain that involves domestic and international transportation, value chain strategic warehouse management, order and inventory visibility and control, materials handling, importexport facilitation, and information technology. Nov 01, 2006 abstract supply chain management in the petroleum industry contains various challenges, specifically in the logistics area, that are not present in most other industries.

Article 2 of the ucc applies to contracts that are primarily for sales of goods. Pdf supplychain management issues in the oil and gas. Most industries are now relying on the third party provider to deliver the product and services. Using multiple regression analyses, we performed the study on 79 companies from romania and the. The business case for supply chain sustainability for a particular company depends on a variety of issues including industry sector, region of operation, stakeholder expectations, business strategy, organizational culture, and past performance. Also, due to the globalization of the petroleum industry supply chain, sophisticated information technology is essential for smooth information flow considering the complexity of the. Optimal supply chain management in oil, gas, and power. Uk oil and gas industry agreeing to improve on capital and operational efficiency.

It applies to suppliers of tangible goods to the oil and gas companies. However, due to the huge shortfall in demand in the downstream areas of the oil and gas supply chain, the transport carriers such as transcontinental tankers, rail tank cars, tank trucks etc. Era description 01 creation era the term supply chain management was first coined by an american industry consultant in the early 1980s. This study has identified five main challenges in managing supply chain performance. The oil and natural gas supply chains can be complicated and sometimes obscure systems to many who rely on their products and services. A study of sustainability in the oil and gas supply chain. It takes the concept of electronic business ebusiness and marries that with supply chain management scm. The overall aim is to develop an empirical model of sustainable supply chain characteristics that improves resource utilisation, profit maximization and competitiveness in the oil and gas industry. Jul 21, 2017 the nonhydrocarbon supply chain is very critical to deliver the equipment and services required to find, extract, refine and finally market the oil and gas. This type of disintegration in the supply chain can increase the cost of acquiring crude oil, which will eventually affect gas prices for consumers coia, 1999. This paper analyses the influence of sustainable supply chain management strategiessupplier selection, product stewardship and logistics management on supply chain management functionsplanning, execution, coordination and collaboration in the oil and gas distribution industry. Supply chain management, performance management, oil and gas industry, challenges. Two subfactors are considered in the model re lationship with suppliers and customers. Identifying nonvalue added activities in the petroleum supply.

Electronic supply chain management is the method of managing a supply chain online. A typical oil supply chain begins with the crude oil producer, next, the oil moves to the refiner, the transporter, the retailer and finally to the gas pump where a customer receives the product. A case study in the us pallet industry henry quesada 1, rado gazo 2 and scarlett sanchez 1 1virginia tech, 2purdue university usa 1. In a supplychain, a company is linked to its upstream. Oil, gas industry faces supply chain issues hart energy. The primary way that politics can affect oil is in the regulatory sense, but its not. May 29, 2009 objectives understanding the importance of supply chain management in the petroleum industry. In addition, the growing demand of hydrocarbons, the globalization of the industry and the discoveries of oil and gas resources in remote locations has made the management of the supply chain even more challenging.

Supply chain management is a conscious effort to run supply chains in the most efficient and effective way possible. Title examining the impact of supply chain integration on. Oil and gas currently lags many industries in leveraging digital technology to support more innovative supply chain models. Below, youll find a definition and brief explanation of this business concep. Gordon chibroski portland press herald getty images there are a growing number of software s. Shura sheffield hallam university research archive. Optimal supply chain management in oil, gas, and power generation. Managing risk in the supply chain project management in procurement total cost of ownership demonstrating procurements value to stakeholders. Certificate in supply chain management fontbonne university.

Critical factors affecting supply chain management. Yusuf, business school, university of hull, hull hu6 7rx, uk. Along its supply chain, oil passes through different legal frameworks as it moves from one country to another. A case study in oil and gas industry, authorshatina saad and z. Introduction supply chain management is applied by companies across the globe due to its dem onstrated. When it comes to oil and gas development with all of its moving parts, an ineffective supply chain management process can lead to worker productivity issues, wasted money and ultimately, lower production levels and profits. The thesis titled current issues in the supply chain management in the gas and oil industry is aimed to study and provide a clear idea of todays supply chain optimization, development of the industry, new operational challenges, environment risk concerns and example of the worst disaster in the petroleum industry. Identifying distinguishing features of the petroleum industry supply chain visavis discrete manufacturing supply chains. Supply chain challenges identified in the white paper included health, safety, security and environment management. However the concept of supply chain in management, was of great importance long before in the early 20th century, especially by the creation of the. Along the oil and gas industry supply chain, the ucc governs the terms dealing with the sales of goods. The oil and gas industry is involved in a global supply chain that includes domestic and international transportation, ordering and inventory visibility and control, materials handling, import. But certain innovations in transportation and logistics are enabling these shippers to.