Advances in technology, competition and customer demand is driving supply chain innovation as companies strive to discover smarter and more efficient ways of operating.
Industries such as retail and defence are taking advantage of technologies such as the internet of things (IoT), automated asset tracking, 3D printing and predictive analysis which bring value to operations and provide business intelligence that was previously hard to obtain, or even unknown.
By replacing traditional, manual methods in the supply chain with the latest innovations these industries are reaping the rewards of standardisation, simpler processes and more accurate intelligence – all leading to more efficient operations and tighter cost control. Benefits the oil and gas industry could use right now.
The current climate has been a catalyst for looking more closely at the oil and gas industry’s supply chains and there has been much discussion on collaboration and adopting the latest supply chain innovation to remain profitable against the low oil price. DNV GL CEO Remi Eriksen has called on the industry to take advantage of this time to focus on removing inefficiencies from operations by increasing visibility, challenging current practices and adopting the latest innovations.
We know the oil and gas industry is decades behind other industries when it comes to the supply chain with traditional, manual, costly and inefficient methods still being adopted. And we also know supply chain inefficiency costs the industry billions of dollars each year. So why are we not taking action?
In the past, high margins helped to hide these issues. But falling oil prices and ever increasing costs has exposed this area as companies look to cut spending anywhere they can. Investing in the latest innovation will not only provide the industry with much needed cost savings now, but will ensure competitive advantage, enhanced business intelligence and seamless integration of business processes in the future.
There are many factors in the industry we cannot control, but our supply chains are not one of them and there are opportunities to exploit this area to provide real value to our industry. It is essential we overcome the current barriers to adoption and move away from “the way we’re used to doing things”. There are still opportunities in the industry for forward-thinking, technology-driven companies that can deliver operational efficiencies and lower cost solutions – the time has now come for us all to take action.
☛ Nick Coaton is general manager, track and trace solutions at Swire Oilfield Services