About the Client
The client is one of the largest firms in the oil and gas industry. They deal with various domains like exploration, extraction, refining, transport, and marketing of these commodities. The company was looking to expand its services worldwide.
The Business Challenge
The client, a leading supplier in the oil and gas industry, was looking at improving their overall business efficiency. The oil and gas industry player sought to address issues pertaining to regulatory compliance through organized demand planning and optimization of inventory. The firm was also looking at maintaining oil and gas equipment uptime to improve their overall productivity.
Continue reading to know how our solutions helped the client tackle the business challenges.
Our Findings
In the oil and natural gas industry, the effective management of purchasing and supply plays a vital role. The procurement managers need to have excellent people skills, commercial and business skills, and the ability to communicate appropriately at all levels of the supply chain. As organizations in the oil and gas industry struggle to streamline their business processes, it becomes essential for them to invest in devising and implementing procurement best practices.
SpendEdge’s procurement best practices engagement offered insights that helped the oil and gas industry player to improve their sourcing practices. Moreover, the client was able to streamline their supply chain activities to drive profitability. It also assisted them in identifying areas of unmanaged indirect spend. This procurement best practices engagement also helped the oil and gas industry player to avoid the risks and threats associated with indirect spend.
Want detailed insights on procurement best practices in the oil and gas industry? Request a FREE proposal.
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Oil and Gas Industry Trends
In today’s market scenario, even well-established players are struggling to retain their market share in the face of increased oil production. Advancements in drilling methods such as deep-water drilling, hydraulic fracturing, and lateral drilling have resulted in increased oil production in several parts of the world. However, the surplus output coupled with a decline in oil consumption has led to a decrease in oil prices along with reduced profits.
- Exploring new forms of technology deployment: Digitization of processes can be a lever for innovation; thereby, enhancing efficiency and productivity in the oil and gas industry space. Adopting technology and implementing digital devices, sensors, and databases that predict equipment breakdowns before they occur helps companies in improving their efficiency in deep sea and offshore oil platforms.
- New business models and forms of partnerships: The evolution and rapid transition of the oil and gas sector from being dominated by large companies to the one featuring specialists in narrower aspects of the operating environment necessitate collaboration, and implementation of newer methods to leverage specific skill sets of the individual firm.
- Differentiated capabilities: For firms operating in the oil and gas industry sector, possessing differentiated capabilities proves to be a crucial factor for future success. In recent years, smaller oil and gas industry exploration and production companies with a particular set of capabilities have been able to acquire mature assets and outperform the super majors in specific segments.
Leverage SpendEdge’s procurement best practices to increase operational efficiency and reduce costs. Request a FREE demo!
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Such fluctuations in the global oil and gas industry pose significant challenges for suppliers in this sector. While a few oil and gas industry players are well-equipped to handle these challenges, the others players in the oil and gas industry have to adopt certain procurement best practices to increase their operational efficiency and reduce costs to preserve margins and maintain the reinvestment rates necessary for future growth.
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