Transformation in the Oil and Gas Industry

Complexity and risk are inherent in the oil and gas industry; from raw material extraction to end-product sales. The hydrocarbon supply chain has challenges at (and in-between) every node.

As global pressures and competition increase, oil and gas companies must find long-term sustainable advantages.
Cost-lowering strategies continue to be successful, however, many executives are searching for additional ways to differentiate their products and services.

This differentiation comes from transforming your business by focusing on every step in the hydrocarbon value-chain and by examining opportunities for organizational and process improvement.
In the era of changing customer behaviors, demands, and technology, companies in the oil and gas industry must address how they use their value chains to deliver products and value-added services. Those services must be superior to all of a customer’s other choices — for the end-customer as well as each customer within the supply chain.

To be the best (and to remain competitive), you must be able to predict, rapidly respond, and communicate changes and disruptions across the hydrocarbon value chain. You must focus on how you respond, and how trade-offs affect each customer, at each node of the value chain.

In addition to developing your value chain, you also have to address traditional challenges and risks…

Global Risks in the Oil and Gas Industry

• Shifts in the global economy and increasing global competition
• Fluctuations in market prices and demand for oil and gas products
• Inconsistent and dwindling supply of raw materials and expansion into new geographical regions
• Political risk and changing regulations by national governments
• Increasing pressure of environmental regulations and natural resource management
• Climate change and impact on customer behavior as well as natural disaster planning
• The aging workforce and Increase competition for workforce expertise
• Customer pressures to provide reliable delivery times and consistent quality of products

Strategic Challenges in the Oil and Gas Industry

• Shareholder pressures for consistent and reliable returns
• Competitor takeover threats and competitor mergers
• Inability to strategically and tactically respond to global risks and competition
• Aging plants, facilities, infrastructure, and technology
• New and emerging technology and capital investment costs
• Hydrocarbon supply chain disruptions
• Inconsistent data to inform decisions: asset life-cycle management, capital management, planning, and forecasting
• Inability to improve on benchmarking ranking studies
• Knowledge and information silos that create conflict between internal strategic, operations, manufacturing and sales, and marketing divisions. They also impede clear communication with external vendors and partners.
• Increasing workforce costs as global demand for talent heats up
• Inability to compete on customer service, or respond to changing customer behavior and needs

Operational Challenges in the Oil and Gas Industry

• Struggle to improve margins and efficiencies
• Ineffective planning, demand forecasting, inventory management, logistics, and customer delivery
• Inability to execute
• Lack of processes to consistently deliver manufacturing goals
• Ripple effect of operational mistakes and miss communication
• Inefficiencies in equipment use, error detection, issue response, and resolution
• An aging workforce and wide gaps in education and experience
• Inability to define service levels
• Inaccurately measured results
• Increasing customer complaints, lack of effectively resolving issues and dissatisfaction

Become a Competitive Powerhouse in the Oil and Gas Industry

You understand the complexity — the risks.
You’ve eliminated waste, reduced costs, and improved revenue.
Now, it’s time to look at each node in your value chain, operational excellence, and customer service excellence.

It’s time to improve the interactions between strategic initiatives and operations. It’s time to increase performance visibility with consistent KPI’s and accurate data. It’s time to empower your employees to make better-informed decisions at each step of your value chain process.

In today’s environment, operational flexibility is a strategic imperative. You must be ready when market disruption occurs. When you focus on value drivers across your supply chain and ways to improve customer service excellence (internal & external) you create your competitive advantage.

You don’t have to figure this out on your own.
Hydrocarbon Consulting is here to help you. With industry expertise: upstream, midstream, and downstream (including refining, logistics, terminals, and retail).