The oil and gas industry is driven by several challenges such as volatile gas and oil prices, extreme locations, marginal oil fields, as well as rapidly changing global fuel trends. Amid such challenges, it is becoming important for players in the oil and gas industry to build up effective procurement strategies. Now, you may ask how a procurement solution may work for these businesses. Read the post to find answers.
How Adopting a Strategic Procurement Approach can be Beneficial to Oil and Gas Industry Businesses?
Short spending and intelligent investment has become more important than ever for businesses operating in oil and gas industry. A strategic procurement decision will not only help them achieve both efficiently, but also strengthen their foothold in the highly competitive business. Here is how these businesses can gain several advantages by implementing an efficient procurement strategy.
- Streamlined Process Management: Although advanced drilling and processing technologies are helping oil and gas companies to extract more fuel; still they need to implement procurement systems that provide real value to their business. They can perhaps opt for systems like Enterprise Resource Planning (ERP) that help address the above-mentioned concerns. These systems will help them streamline processes by taking care of important processes such as inventory management, contractor management,demand forecasting, e-procurement, and master data management. Inventory management coupled with demand forecasting is the backbone of supply chain strategy in the oil and gas industry. Thus, oil and gas businesses that have already adopted customized ERP systems are already realizing the benefits of the same.
- Minimal Supply Chain Risks: The oil and gas industry businesses always depend on various large and small suppliers to supply their services and products required for ongoing projects. It is a well-known fact that most of these relationships are not up to the mark, as a result the oil and gas companies register huge losses due to these suppliers. Hence, to avoid losses and improving supplier relationship management, the companies should adopt a suitable supplier-benchmarking model. They need to analyze the performance of different contractors for various spend categories. This is only possible when they build closer relationships with their suppliers. Combining their business strengths with the contractor will help them design progressive solutions, minimize supply chain risks, as well as stay ahead in the competition.
- Cost Reductions: Achieving cost efficiency has become important for oil and gas companies. How is this manageable? This is where supply chain market intelligence may help. By adopting this procurement strategy, oil and gas companies can easily make the right investment decisions. Supply chain market intelligence will help them in acquiring and analyzing the future and present market trends, adopt profitable sourcing, and enable them to anticipate or track the changes in the marketplace before others do. Thus, an effective supply chain market intelligence helps oil and gas companies to avoid bad investment decisions, and find innovative solutions to reduce operating costs.
With business pressures mounting up, it becomes difficult for the oil and gas industries to design and implement effective procurement strategies. Thus, many are seeking services of Engineering, Procurement and Construction (EPC) contractors, who allow them to adopt better procurement strategies, without bothering about the market conditions. GND Consulting and Supply, LLC is one of the leading EPC contractors for the oil and gas industry in the US.