SUPPLY CHAIN IN

OIL AND GAS SECTOR

NITIN BIGHANE

ROLL: 220

PGDIM

----- OIL AND GAS SUPPLY CHAIN CHALLENGE ------Manage and oversee the supply chains in an effective manner in order to reduce cost as well as to

enhance and guarantee efficient

operations.

SUPPLY CHAIN LINK IN OIL AND GAS INDUSTRY

• Types of shipments made vary widely from gloves to pipes, valves, cranes, chemicals, cement, steel, and drilling rigs

• Immense array of supplies to be moved daily and frequently in large quantities domestically, globally, onshore and offshore

• A drilling contractor is required and as many as 45 or more different services are required to drill and complete each well

• Reliability of suppliers is must so as to reduce need of inventory of raw material, quality inspection systems, rework, and other not-value adding activities, thus resulting in a lean production.

• The supply-chain in tubular goods is important as delays in the arrival of pipes, casing, tubing, and other accessories, can result in extensive rig downtime and consequently high operating costs.

Exploration Production Refining Marketing Consumer

• what product-service bundle to produce

• what portions of the bundle to produce in house and what portion to purchase from others

• facility capacity

• location of facilities

• type of technology to adapt

• handling communications between suppliers and customers

• standards expected of customers and suppliers

CONFIGURATION QUESTIONS• ensuring supplier effectiveness in cost,

timeliness and quality

• setting appropriate targets for inventory, capacity, and lead time

• monitoring demand and supply conditions

• communicating market and performance results to customers and suppliers.

COORDINATION

VERTICAL INTEGRATION• Recent developments: increased

demand for better and faster customer service, globalization of the oil and gas business, competition, and the availability of information technology to facilitate information exchange.

• integration and cohesiveness will reduce costs if it leads to a more efficient system.

OUTSOURCING• Oopportunity to focus on what it does best

- its core competences. • Add capacity without added overhead and

fixed costs. • Outsourcing fosters market agility and

corporate growth. It allows a firm to grow without undertaking large capital investments and in addition provides more flexibility during periods of economic downturns.

STRATEGIES FOR SUPPLY-CHAIN COORDINATIONRelationship Management: integrate its decisions with those made within its chain of customers and suppliers

The Uniform Commercial Code (UCC): delivery obligations for the seller of goods when no place of delivery has been agreed upon

Segment Customer based on need: Different approaches for meeting different requirements

Customized Logistics Network: Delivering right quantity at right time

Watching Market Signals and Plan accordingly: Planning based in demand forecasting

Partnerships To Enhance Supply-Chains: 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, import/export facilitation, and information technology thus the shipper and the oil company are jointly and mutually involved.

Strategic Sourcing: suppliers who have consistently demonstrated superior performance deserve a favourable status

Supply-Chain Wide Technology Strategy: Information readily shared back and forth

THANK YOUOil and Gas contribute to 58 % of world’s energy source

Its important to do this reliably, effectively and efficiently

Source:http://prosaamya.com/website/oil-gas.htmlhttp://www.barrelstrength.com/2012/09/page/2/ http://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&ved=0CFEQFjAD&url=http%3A%2F%2Fwww.cluteonline.com%2Fjournals%2Findex.php%2FJBER%2Farticle%2Fdownload%2F2552%2F2598&ei=pWL-Ud64Naa27QayrIHIDg&usg=AFQjCNGgMa4qmojSSRTB5MXGGOH7RL7A_g&sig2=u-kV6RuNChrpKH89T6u2BQ&bvm=bv.50165853,d.ZGU&cad=rja