Podcast: Achieving Agility through Supply Chain Management

What do you do when you can’t form a clear vision of the future?

The petroleum industry is facing a level of uncertainty not seen in the past:

• Commodity prices spiked up and then crashed back down, and no one’s quite sure where they’ll go next. 
• The availability of transportation to move our products to market has grown critical in North America, and many people find themselves losing market shares simply because they can’t access pipeline capacity.
• Today, the financing of our operations is in question as it’s never been before.  The financial crisis and the recession have added to that.  We have to be prepared to move when the money is available and drill when we can, and be prepared to dial back when the money isn’t available anymore. 
• And strangely enough, what we’ve seen for the first time in several years is now a lack of availability of critical materials that we need to support drilling and operations, and the prices of commodity, particularly steel goods have spiked up in the last few years in an unexpected way. 

All of this creates an air of uncertainty — if you know things are going to be bad, you can respond proactively to that.  If you form an opinion that things are going to be good, you can form a proactive response to that.  But what do you do when you can’t form a clear vision of the future? 

Today, one of the best ways to respond to this level of uncertainty is to create “agility” in your organizations — the ability to dial your organizations up or dial them back very, very quickly — and that can be done through technology. 

Today, we have available to us web-based technology that provides procurement platforms that can do things that we only thought about a few years back.

• They’re flexible and web-based
• They can be accessed in the field and in the office
• They can share information in a way that we’ve never really thought about doing in the past

By wrapping around those flexible business processes that allow us to respond to changing conditions and to dial our business up and back at will, we can empower that technology, and bring it into our business. 

This technology also allows us to involve people in a way we’ve never really involved them before.  People between the drilling floor and the back office can dialogue with each other about data using these platforms in a way that’s flexible and creative and allows them to respond to changing conditions.  This is done in two ways.  First of all, integration with our other systems — achieving a true procure-and-pay view of the world in terms of the way we manage the materials and the critical services that help us drill and produce product; and by applying organizational discipline — the will to actually make these things work.

Today, the technology and what we know about business processes and our ability to train people allow us to do things that we really only thought about in the past.  It gives us a whole new level of capability in our supply chain and our ability to manage.

• We can now address complex issues that used to lie beyond the capability of what we used to call “purchasing systems”
• We can deal with complex purchasing situations such as services and engineered products
• We can create alternative processes that respond to our emergency conditions 
• We can manage logistics much more effectively when we’ve ever managed it in the past and allow ourselves to expedite when necessary but avoid unnecessary expediting fields when it’s not 

We can then reach for capabilities that really allow us to empower our organization and reach for real improvements in our business results.  We can implement vendor-managed inventory in a way that’s clear and transparent and powerful, so that both, we and our vendor partners can see what’s in inventory, and make sure we’ve got the optimum amount of product to move to support our drilling and lifting operations. It’s an exciting world and it allows us to create agility that will allow us to respond to this unprecedented amount of uncertainty that we’re seeing in the industry today. 

Request More Information

Click here to request more information