It’s no secret that the energy and minerals sectors face new challenges with global health and safety while remaining under significant pressure to reduce costs and drive efficiency in an evolving market and world. In fact, Accenture recently released a report with the World Economic Forum (WEF), focusing on the importance of reinventing the industry through collaboration—both among operators and with the ecosystem. Per the report, titled Collaborate to Reinvent an Oil and Gas Industry Imperative, there’s a potential for $7 billion in annual savings possible through just a 20% improvement in logistics assets utilization, which currently sits at a paltry 55%.
Today, in most basins, logistics is representative of a multiple dysfunction model, in which each operator works independently, resulting in needless customization, limited standardization and wasteful duplication in staffing, assets and technology applications. In fact, through standardization alone, Accenture and WEF estimate a potential 10-20% improvement in logistics utilization.
We’ve seen some successful regional and spot initiatives for logistics collaboration, but we believe there is still a ripe opportunity for collaboration on a larger scale. However, because previous sharing arrangements have been cumbersome to stand up and maintain, we’ve seen limited efforts to actually create a global model for collaboration across the materials and people supply chain.
Collectively, we argue that the industry no longer has the luxury of waiting to implement a solution to logistics waste. It’s time to act, before the economic ramifications become irreparable. That’s why we’re working to create a new collaboration model as the industry standard, using an extended enterprise framework.
Over the coming weeks, we’ll be sharing our thoughts on a solution for the oil and gas industry’s massive logistics hurdles in a series of publications focused on our recommendations for creating:
- A new global governance model that ensures oversight and excellence
- A new operational model that drives consistency, transparency and cost reductions
- A new digital model that simplifies and streamlines logistics management while ensuring data integrity
Trobexis, Streamba and Stinnett & Associates want to be part of the solution. Our collective team of industry experts brings broad and deep experience across the people and materials supply chains in energy and minerals. But even with great ideas and our expertise, we know we can’t do it alone. We need partners who are just as invested, knowledgeable, passionate and driven by the same immediacy. Just as the future of logistics is founded on collaboration, so are our efforts to bring this future to life. That’s why collaboration is our key belief, one that informs every decision we make.
In the weeks ahead, we’ll begin sharing more about our beliefs and new models for logistics operations, digital and global governance as well as looking for insights and partners to help us on our journey toward a more collaborative—and sustainable—future for the industry.
In the meantime, we’d love to hear from other industry experts who’d like to be part of the journey—or just want to learn more. Share your comments, ideas, challenges, obstacles and questions to help ensure this journey ends in a more collaborative solution that benefits us all.
Trobexis provides a best-in-class global workforce planning solution designed to deliver on the industry’s long-awaited promise of a truly end-to-end process for the people supply chain.
Streamba connects, automates and orchestrates global energy supply chains, providing real-time visibility, collaborative cross-functional planning and applied machine learning to enable VOR, a best-in-class global logistics platform to deliver measurable operational discipline safely and at scale, rapidly.
Stinnett & Associates is a professional advisory firm that strives to maximize value for public and private companies, boasting significant experience serving the energy and minerals sectors.
Stinnett & Associates is not a CPA firm.