The oil & gas industry is the backbone of any industrial economy. However, this sector is currently in the transition phase, shaped by swift turnaround due to technological innovations, market dynamics, and rising awareness of sustainability issues.
In this blog, we will explore the key trends and innovations that are reshaping the oil & gas supply chain operations and how a mobile supply chain management (SCM) solution is a game-changer in this rapid digital transformation.
The oil & gas supply chain is a complex web of interrelated processes, primarily divided into three stages:
This stage relates to the exploration and extraction of the oil reserves by leveraging advanced technologies like 3D, seismic imaging, and horizontal drilling. This stage is plagued by several challenges like regulatory compliance, environmental effects, and rising operational costs.
Once the oil reserves are explored and extracted, the next stage involves transportation and storage. This stage is thus referred to as midstream. In this stage, certain assets like pipelines, railways, tankers, and storage facilities are used to transport crude oil and natural gas from extraction fields to refineries. Efficiency is paramount to mitigate any challenges at this stage.
This is the final stage in the supply chain lifecycle of an oil & gas industry. In this stage, crude oil is refined into consumable products like gasoline, diesel, and jet fuel, apart from distributing these products to end-users. This segment is highly dynamic and primarily influenced by market demand and pricing dynamics.
Each stage involves pressing challenges but also offers opportunities to optimize the processes by leveraging the right technology.
The oil and gas sector faces several pressing challenges that include:
Supply chain interruptions: Supply chain disruptions occur due to a combination of several factors including economic disturbances, political instability, and changing commodity prices, all disturbing smooth supply chain operations.
Sustainability pressures: Rising demand for greener energy sources is prompting organizations to redefine their operations, while still meeting the global energy requirements.
Workforce issues: Retaining and training skilled personnel in dangerous environments remains a constant issue.
Digital transformation gaps: The oil & gas industry still lags in leveraging digital solutions due to regulatory hindrances and data-sharing inefficiencies, despite its potential.
Safety issues: Enforcing the right safety protocols and keeping the workforce safe in rugged environments is both a legal obligation and a moral right, which is quite a challenge.
Adopting cutting-edge solutions to overcome the above challenges, while maintaining efficiency and addressing external pressures is the need of the hour for industries operating in the oil & gas industry.
Now that we understand the key challenges plaguing this industry, let’s throw some light on some of the emerging technologies that are transforming the oil & gas industry for efficient supply chain management.
AI is ubiquitous and has penetrated into every known industrial domain including the oil & gas industry. Using AI, you can automate routine tasks including inventory management, plant maintenance, and vendor screening. By analyzing historical data, geological information, and operational metrics you can enhance decision-making.
IoT is an emerging technology that enables real-time monitoring of equipment and processes using sensors. This way, you tend to minimize downtime by forecasting maintenance needs before failures occur.
By leveraging the right cloud platforms, you can facilitate centralized management of distributed operations, improving collaboration across various stages – upstream, midstream, and downstream activities across your supply chain.
A good mobile supply chain management (SCM) solution optimizes workforce management by facilitating real-time communication between your front-line workforce (field teams) and back office (central office). By leveraging a slew of technologies like barcode scanning, GPS, AI, and IoT, this solution lets you seamlessly capture data generate operational insights about your equipment's health and do much more.
We are living in the age of data, and data-driven decisions have more credibility, instead of decisions based solely on intuition or observation. Using data analytics, you can foresee demand more accurately and improve the overall supply chain visibility.
The above-discussed technologies go a long way in addressing most of the challenges, apart from enhancing overall efficiency.
A good mobile SCM solution like that offered by Propel Apps, a leading supply chain expert, plays a major role in optimizing the supply chain efficiency of the oil & gas industry. Let's explore some of the key benefits that you can accrue by adopting this solution.
Real-time data capture A mobile SCM solution leverages barcode scanning and GPS technology to capture data on the field related to drilling speeds, pump flow conditions, and weather conditions for immediate analysis.
Improved collaboration: With instant notifications at every stage of ERP transactions, teams working across multiple locations, even remotely, can easily share updates instantly. This way, all the stakeholders will be on the same page, ensuring proper alignment with the organizational objectives.
Enhanced safety: Using a mobile SCM solution, you can analyze equipment data over specific time intervals to monitor hazardous conditions in real time. This way, you minimize risks for your employees operating across remote or dangerous zones.
Cost Reduction: A mobile SCM solution automates manual processes such as inventory tracking, picking, packing, and vendor management, thereby minimizing operational expenditure.
A mobile solution not only improves productivity but also ensures strict statutory compliance with industry standards. So, a mobile solution is no longer an option – it's a mandatory tool to stay ahead of your competition.
The future of the supply chain in the oil & gas industry seems bright and promising with investments in key technologies and strategies. Here is what to look forward to shortly:
Increased use of digital tools: With greater accessibility of digital tools, one can expect greater integration of AI, IoT, and blockchain technologies.
Sustainability initiatives: Organizations will spend more time exploring renewable energy sources to enhance the efficiency of their operations to minimize the carbon footprint.
Global collaboration: Organizations will increasingly leverage advanced data-sharing frameworks to enhance greater coordination among international stakeholders.
Agile supply chains: Organizations will leverage advanced predictive analytics that help them foresee disruptions and adapt accordingly.
These are just the gist of trends that we can expect in the coming years that are expected to shape and transform the future of the oil & gas supply chain.
The oil & gas industry is on the verge of transition where innovation meets requirements. With the adoption of innovative technologies like AI, IoT, big data analytics, and mobile SCM, you can transform your passive supply chain processes into an agile and efficient supply chain ecosystem. Though investing in the right mobile SCM solutions seems expensive, the benefits you reap in the long run are fruitful for sustained supply chain efficiency and productivity. So, fasten your seat belt and get started to make the big move – a move that should redefine the way you operate in your complex supply chain and make you a winner all the way!
