Energy expert interviews reveal industry-wide need for data and expertise to boost efficiency and improve costs
WESTERVILLE, Ohio (July 9, 2013) – Energy companies increasingly seek to operate their indirect and maintenance material supply chain more efficiently to achieve benefits such as improving productivity, uptime, cost reductions, and material availability. These businesses need critical data to identify areas of improvements. They also require the business savvy and expertise to determine and implement the right solutions. To address these points, a new white paper, “Managing Your Supply Chain: Optimization for Improved Supply Chain Performance,” is being published today by Exel, the North American leader in supply chain management and a Deutsche Post DHL company.
The white paper is the second in a four-part series based on interviews with energy experts in procurement, supply chain and materials management about the evolution of supply chain management in the energy industry and the challenges these supply chain professionals are attempting to address for their internal customers in projects, maintenance, and production. According to the paper, three major trends are currently taking place within businesses that reflect increased pressure to gather critical information.
1.Greater focus on using the right metrics to better understand how to improve the indirect material supply chain. The metrics energy companies currently track do not measure effectiveness across the entire supply chain. For this reason, interest is growing to develop stronger key performance indicators (KPIs) that would increase understanding of where MRO ranks within their broader supply chain.
2.Enhanced C-level interest in focusing on the indirect material supply chain. Traditionally, senior management has focused its interest on business objectives such as safety and uptime rather than transportation, materials management, warehousing, and material disbursement efficiency for construction, turnaround, and general maintenance activities.. As executives’ understanding of supply chain processes increases, there is a growing awareness that having an efficient supply chain actually helps achieve business and production objectives.
3.Increased investment in the right people with relevant skills and knowledge to oversee each stage of the supply chain. Hiring external people into leading roles to oversee indirect material supply chain processes may not be the best solution. The supply chain learning curve is steep and may impede a new recruit’s success. In many cases, companies’ existing supply chain processes struggle to cope with the demands of the changing external environment. When 3PLs offer multidisciplinary training coupled with supporting and encouraging strategic and business-minded work styles, the caliber and expertise of associates increases.
“Across the business, oil and gas industry senior leaders are realizing they need to better understand their maintenance materials management processes and spend,” said Ed Smith, Exel’s Vice President, Business Development Energy in US and Canada. “To do this, they need people who can marry supply chain expertise to overarching awareness of sometimes conflicting business priorities related to budget constraints, material availability, and equipment uptime.”
The white paper presents the case for how third-party logistics providers (3PLs) can help energy companies optimize indirect material supply chain performance and reduce costs.
“By contracting with 3PLs, businesses hope to introduce effective metrics and methodologies, identify and address areas for improvement, and delegate responsibility to those with adequate experience,” Smith said.
More information can be found in the white paper, which can be downloaded from www.exel.com/indirectmaterials . To learn more about Exel’s supply chain solutions for the energy industry, visit http://www.exel.com/exel/exel_energy.jsp