In today’s market there is a push, driven by Wall Street and private capital, to improve margins versus simply increase production – this is somewhat new to the Oil and Gas Industry. In the past the way to increase revenue has always been drill more wells and move more oil. With oil prices where they are, this no longer works. For what seems like the first time, many companies are searching for ways to save money and operate within cash flow.

 

“The way we’ve always done it” doesn’t cut it with a new leaner business model.  

 

This charge to “SAVE” has opened-up the supply chain as the most obvious, and lowest hanging fruit to reduce expenses. Upstream and midstream companies are consolidating suppliers, suppliers are consolidating trucking companies, trucking companies are putting more stress on the shoulders of their drivers – all in hopes of seeing better prices and more efficient deliveries. Large companies are spending more and more on procurement teams versed in seeking out low prices and reliable deliveries. More companies are working to self-solve supply chain issues with in-house technology solutions. Unfortunately, all this stress is only further fragmenting the issue and eating more time and resources.

 

Agendas to improve efficiencies and reduce costs have introduced a host of issues including chronic check-in calls, which waste more time and resources; an abundance of single-serve technology solutions; and reduced vendor choices which actually limit procurement’s ability to find the best prices. To the chagrin of those in charge of consolidating vendors, in many cases when one vendor or trucking company is removed from a list – they only pop back in through a distributor, contractor or broker. So, the vicious cycle is perpetuated, and even more dollars are wasted.