The oil and gas industry is a strong and resilient industry. However, while the resources suppliers procure are necessities for modern life, the industry itself faces numerous challenges.
These are the most common oil and gas procurement challenges industry professionals face and strategies to help you overcome them.
1. Visibility and Flow of Supply Chain
Oil and gas supply chains aren’t always the most transparent. Most companies rely on oil and gas production from just a handful of countries. When those countries experience shortages or other economic issues that disrupt the supply chain’s flow, it trickles down and impacts the oil and gas supply chain and procurement process at home.
The best way to overcome those supply chain procurement challenges in the oil and gas industry is to make the supply chain more transparent. Monitor risks abroad, look for alternative suppliers, and keep track of current prices each day.
The more you can break the supply chain process into manageable chunks, the easier it will be to identify challenges, address them, and get the business back on track quickly.
2. Large Amounts of Data to Process and Interpret
When looking to improve procurement and supply chain management for the oil and gas industry, businesses will quickly discover that they must process and interpret tons of data every day. The raw computer power needed to make sense of that data is extreme, but it also requires a dedicated team to monitor and interpret it.
Otherwise, companies may never be able to use the information they have to create sustainable oil and gas procurement strategies that improve company operations.
The best way to address this challenge is to partner with a data analytics expert to help organize, process, and interpret the data that comes in each day. Once implemented, this will help companies avoid time-consuming and resource-draining information backlogs that interrupt your business’ flow and keep you from being able to expand at a reliable rate.
3. Difficulty Attracting Qualified Employees
Believe it or not, one of the biggest contributors to oil and gas procurement issues is the employees and contractors that companies hire. Attracting high-quality talent can make all the difference in solving procurement challenges in the oil and gas industry.
The right employees can help streamline the procurement process, keeping an eye on the supply chain and helping implement changes that improve business. The wrong employees and contractors can end up contributing to those issues, forcing companies to experience more delays and interruptions each day.
Investing in your hiring process and expanding the talent pool to other countries as needed can help you secure better talent. By focusing on quality hires, you’ll be more likely to attract talent that is willing to stay with the company for years to come, thereby reducing the amount of training you’ll need to pay for over time.
And don’t forget contractors! Working with vetted, qualified individuals at every step in your supply chain can make a big difference in the efficiency and productivity of your business.
4. Changing Demand for Oil and Gas
The oil and gas industry may be one of the more stable industries operating worldwide, but it’s not without its ups and downs. As more people transition to working remotely or working from home rather than making the standard commute to the office, demand for oil and gas will continue to go down.
This changing demand means the oil and gas procurement process needs to be more dynamic.
By keeping an eye on the demand and adjusting your supply chain as needed, you’ll be able to keep up with those fluctuating demand levels without losing money. With supply chain analytics in place, you’ll be able to prepare for low-procurement periods and increases in demand without having to adjust things on short notice.
How Can the Oil and Gas Industry Be Improved?
The simplest way to improve the oil and gas procurement process is to embrace technology that’s designed to help streamline operations and reduce backlogs in data interpretation. In doing so, you’ll bring your business into the modern age and can eliminate many of the most common procurement challenges automatically.
Become an Avetta member today and see how our top-of-the-line solutions in oil and gas procurement can benefit your business both now and in the future