Oil & Gas
Oil & Gas Industry
The oil and gas industry operates within a traditionally volatile marketplace. Rising demand and constant cost fluctuations are all part of the oil and gas vertical, and supply chain managers have to know how to navigate the ebb and flow of operations within this industry. An inefficient supply chain operation can be devastating for these organizations, because the ever-changing nature of the field demands high productivity and effective forecasting, among other key variables.
Operations managers need to have all of the appropriate data in front of them to make informed decisions about where to send resources, how much inventory to keep on hand and which drill sites offer the most profitability – both now and in the future. The industry experts at Inspirage can help supply chain managers navigate the complexities of their operations.
Within the Oil & Gas industry, there are several key players that have important roles in the supply chain. Companies will generally fall into one or more of the following categories:
- Oil Field Services – These companies help drilling companies set up oil and gas wells. They manufacture, maintain and repair the equipment used in exploratory ventures.
- Exploration and Production – Organizations that focus on finding and extracting oil. This is generally a high-risk, high-reward sector.
- Upstream – Upstream businesses are the ones extracting the oil and sending it through the supply chain to the distributors.
- Downstream – Downstream oil and gas organizations are the ones that represent the commercial side of the business. This can include gas stations and heating companies.
- Conventional Exploration – The conventional oil drilling process involves drilling for oil wells and having the oil flow out of the ground. Conventional exploration strategies are less expensive than other methods.
- Unconventional Exploration – This kind of oil exploration is more expensive than its conventional counterpart. The kind of oil is the same; the main difference is the price at which these products are extracted. Unconventional exploration generally involves pushing oil and gas horizontally through the ground using a process called hydraulic fracturing.
How does Inspirage help each level of the oil and gas industry keep up with changing demand and volatile prices? We offer a range of solutions geared toward different challenges unique to the field.
There are a number of challenges that companies within the oil and gas industry face. These problems don’t just stem from oil availability; there are questions of demand, market volatility and supply chain distribution that also need to be addressed before anything else can be accomplished.
The challenges faced by the oil and gas industry can make their way into any part of the supply chain. Delivery of inbound drilling materials, transportation of the extracted product to the end location and sending workers to remote locations with necessary supplies are all things that supply chain managers have to take into account.
Oil and gas operations are complex, and there are a lot of challenges to overcome in order to ensure the supply chain is efficient, effective and properly resourced. Supply chain leaders have a laundry list of things to keep in mind:
- Supply chain distribution optimization
One of the biggest challenges for companies in this vertical is making sure supply chain distribution is as optimal as possible. Keeping up with demand and remaining competitive requires companies to reevaluate their supply chains whenever prices increase or decrease.
- Changing oil locations
Another key challenge lies in the fact that operations sometimes need to move. Locations where oil can be found continue to change, which means companies have to move people, resources and equipment to where new oil wells crop up.
- Redesign and redeployment of existing assets
Asset redeployment involves taking underutilized or idle assets and using them to increase return on investment. When assets like machinery are still usable, organizations can save money by redeploying them instead of buying all new equipment. Companies need to strategize how to use their existing assets to achieve better results for the same cost down the line.
- Reuse resources to keep inventory down
One strategy that companies utilize to make their operations run more smoothly and keep inventory at manageable levels is by reusing resources like water.
- Importance of projections
In any data-driven environment, it’s critical that the supply and demand projections given are accurate. The oil and gas industry especially feels the pressure to ensure projections are met, because the price of oil is constantly fluctuating.
- Cost consciousness
Cost containment and consciousness strategies are important for oil and gas companies, especially if they want to foster sustainability. The industry is reevaluating its operations, and the only way long-term sustainability can be achieved – especially in light of extreme cost fluctuations – is by adopting effective cost-management strategies.
These challenges require specific responses. To that end, Inspirage has developed solutions to meet these situations. Some strategies include:
- Demand planning
- Sales and operations planning
- Supply planning – distribution and materials
- Service parts forecasting
- Supplier collaboration
- Production scheduling
- Order to cash processes
- Procurement processes
- Order Promising
In order to meet these various challenges and make sure supply chains are functioning in the most efficient way possible, Inspirage has developed solutions geared toward using supply chain data to jumpstart projects, reduce risks and improve time to value. In our repertoire, we have over 100 pre-built solutions that leverage Oracle applications to achieve these goals – and we are building more every day.
Building an efficient, productive supply chain depends on the use of data-driven insights to improve operations and understand where to send resources. A true end-to-end strategy is necessary here.
We use our industry expertise to navigate Oracle deployments in order to elicit the most value. With our solutions, companies can create master schedules, develop comprehensive time-to-market plans and manage assets effectively, all within their Oracle modules. Here are just a few of our solutions that have been specifically pre-configured to generate rapid value and address challenges within the oil and gas industry:
Supply Chain Network Optimization (SNO)
SNO software helps organizations actively plan out their supply chains. An optimized network is a money-making network – by smoothing out the kinks and removing redundancies, companies can cut costs now and down the road. Supply chain network design incorporates end-to-end costs (including purchase, production, warehousing, inventory and transportation) and helps businesses align their strategies and goals. This software helps companies evaluate the efficacy of their supply chains and run simulations based on current data.
Downstream oil and gas businesses – the ones that occupy market niches like gas stations and home heating companies – need to ensure they have an optimal supply chain, too, from well to consumer. The ability to evaluate the resulting impact on refining capacity and the overall supply and demand within the supply chain is critical to improving margin. Inspirage has developed a comprehensive solution for downstream oil & gas supply chain planning. This solution will help simplify supply planning to provide a consistent and robust business process for maximizing profit or minimizing cost. Use the Inspirage Planning Solution for Downstream Oil & Gas to uncover the hidden opportunities to increase capacity (spot buys) and maximize margin on revenue by changing product mix (spot sales). Learn more about this solution from our datasheet.
Project Driven Supply Chain
This Inspirage solution helps organizations support their oil business based on data. Developing an oil field or another piece of property is like building a house, only on a much grander scale. There is a master schedule – and when it isn’t followed exactly as planned, a lot of time (and therefore money) is on the line.
This requires organizations to have more effective planning procedures in place, along with greater visibility into the supply chain and all of the logistics that go along with it. In addition, oil and gas enterprises need to ensure that risks associated with their offshore operations are managed well – the cost of having a rig stop producing oil can be in the hundreds of thousands of dollars lost per hour.
To help oil and gas enterprises avoid these kinds of situations, Inspirage has developed solutions to facilitate a project-driven supply chain.
S&OP and Demantra
The Inspirage Supply Chain and Operations Planning and Demantra solutions are designed to help you optimize every part of your operations. Our cost-effective, pre-configured S&OP solution can be deployed quickly and can be scaled to fit the size of any operation. Key benefits of the S&OP solution include:
- No more spreadsheets
- Reduces planning cycle times
- Enhances Oracle functionality and process flows
- Incorporates industry-leading practices
The S&OP solution and Demantra applications are available in either on-premises environments or as cloud-based services. To read more about this solution, please view the S&OP datasheet.
We also offer Integrated Well Delivery and Spares & Service solutions. For more information about these solutions, give us a call today.
These are only a few of the proprietary solutions Inspirage has at its disposal. We have been around for a long time, and we’ve helped organizations better plan their supply chains from the beginning. Get in touch with the oil and gas industry experts at Inspirage today to learn more about how our services can help you optimize your supply chain and get the most out of your value chain.
To learn more about our oil and gas solutions, contact the software consulting experts at Inspirage today.