Oil and gas procurement functions steward significant amounts of money each year, often overseeing purchasing for multiple business units and teams in diverse locations. Because of the complex scope and scale involved, many companies lack a macro view of their purchasing information, which is critical in understanding how to effectively manage and reduce costs to improve the organization’s bottom line.
This lack of detailed insight — often overlooked in the industry, especially when commodity prices are high — is an ongoing drag on efficiency and profitability. Digging deep into data analytics through strategic technology will identify new areas of opportunity for savings and efficiency. In today’s competitive market, companies need to drive increasingly higher levels of operational excellence to deliver both the agility and innovation they need for top-line growth, while implementing productivity improvements to achieve bottom-line goals.
With an eye toward those competitive benefits, one major oil and gas company engaged an EY team to assess its current procurement and materials management processes, data and strategies, and identify opportunities to qualify, adapt and digitize a smarter supply chain. Ultimately, together, the team leveraged a quantitative and qualitative analytics tool and accompanying supply chain dashboard that showed a macro view of how dollars are spent. As a result, the company’s expenditures can be appropriately categorized, segmented and analyzed in multiple ways, enabling both procurement and operations to understand spend per category; realize cost management opportunities utilizing multiple levers; identify improvements in both contracted and catalog spend; recognize where there are opportunities for competitive sourcing events; and much more. Read on….