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Supply Chain in Oil and Gas

In: Business and Management

Submitted By troyrock
Words 4204
Pages 17
Troy Rock

Florida Institute of Technology

Research Paper
Supply Chain Process in the Oil and Gas Industry.

MGT 5069
June 18, 2016

The definition of supply chain management, it is described as being the set of processes in a firm that are implemented to maximum customer satisfaction while operating at a lowest cost possible to achieve maximum profits. In the oil and gas industry supply-chain, the profitability of a firm is hinged upon its upstream suppliers and its downstream distributors as various forms of raw materials such as oil, fossil fuels, equipment, resources, finances, and information flow through from the top-tier parties all the way down to the customer. The customer is not only the average member of the public that is pumping fuel into their vehicle, but it can be airline companies, cruise-ships, plastic item manufacturers, independent gas stations, etc. Regardless of who is the end-user customer of the oil and gas firm, processes must be put in place to ensure that the supply chain surplus is maintained for all links in the supply chain, from the upstream drillers, down to the points of purchase for the consumer. Currently the price of oil has sharply dropped in the year 2015 and 2016 due to an overabundance of supply, and though a fear of scarcity was once a concern, that is not the case now. The main objective the oil and gas firms face are delivering the abundance of raw materials, going through the various production operations, meeting all of the consumers’ needs, and managing to survive this period of low gas prices and reduced profit. Every oil and gas company wants to find and produce oil, but with regards to the environment, locations and the respective trade lane they are facing more challenges and obstacles. Therefore optimal logistics and supply chain solutions have to be applied in order to find…...

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