International Journal of Global Logistics & Supply Chain Management. Vol. 1, No. 2, 1 November 2006, 90 – 97.
Supply Chain Management in the Petroleum Industry: Challenges and Opportunities
RAED HUSSAIN
Department of Quantitative Methods & Information Systems, Kuwait University, Kuwait
TIRAVAT ASSAVAPOKEE
Department of Industrial Engineering, University of Houston, Texas, U.S.A.
BASHEER KHUMAWALA
Department of Decision and Information Sciences, University of Houston, Texas, U.S.A.
Supply chain management in the petroleum industry contains various challenges, specifically in the logistics area, that are not present in most other industries. These logistical challenges are a major influence on the cost of oil and its
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Opening new production sites or distribution centers closer to dispersed customers is one way to reduce the lead time and transportation costs. However, the acquisition of such facilities in the oil and petrochemical industries, if feasible, is typically very costly and often results in higher inventory and operating costs (Hebert, 2004). Red Cavaney, president of the American Petroleum Institute, said “Most companies are unlikely to undertake the significant investment needed to even begin the process” (Hebert, 2004) These factors are pushing oil and petrochemicals companies to either absorb the increase in costs or pass the costs on to customers who are already facing increasing prices. Companies therefore have recognized that improved supply chain efficiencies represent a huge area for cost savings, specifically in the logistics area; they are estimated to be an average between 10 and 20 percent of revenues (Hamilton, 2003). Also, companies believe that the supply chain in which they participate as customers and suppliers is what creates competition rather than individual companies (Whitfield, 2004; Lange, 2004; Morton, 2003; Bianchi, 2003; Collins, 1999; Coia, 1999). Despite the importance of the petroleum industry in our daily life and the operational challenges it involves, unfortunately the topic has received very little attention in operations and supply chain management literature. The objective of this paper,
Global Supply Chain – You Better Be Good…………… Time and Distance……………………………..……………… Where Do the Lost Savings Go? …………………………. The 10 Capabilities of Global Logistics Leaders…….. Lack of Global Technology Enablement …..………….. Summary………………………….................................... Sponsor Perspective …………………………………………. About Supply Chain Digest……………………………...... Global Logistics Capability Diagnostic………………… . End Notes ……………………………………………………….. 1 2 3 5 13 14 16 17 18 25
Chase, R. B., & Jacobs, F. R. (2011). Operations and Supply Chain Management, 13e. Boston: McGraw-Hill Irwin.
A Customized Textbook, Supply Chain Management SCHM2301, ISBN9781308037400 Copies are on reserve in the library
Chase, R., & Jacobs, F. R. (2011). Operations and Supply Chain Management (13th ed.). Boston, MA: McGraw-Hill Irwin.
Bozarth, C., & Handfield, R. (n.d.). Introduction to operations and supply chain management (3rd ed.). Upper Saddle River, NJ: Pearson Prentice Hall.
The supply and management of a company have various difficulties in trying to manipulate the logistics of supply and making analysis of the whole performance of the supplying team. These issues apparently result from low surge and have had great inconveniences to stock and management. The reasons for these intensive difficulties are a result of malfunctioning of one group or department and thus disrupting the paths of supply. Prior to lack of frequency in stock-outs, poor customer response and high prices on the products of the supplying enterprise have the greatest impact then due customers. This
For Customer service, supply chain is all about proving the logistics of delivering the right products at the right time. Sounds simple but there are factors such as: reordering the product, supplier inventory is not enough, no consignment storage, delivery time not met, redesigning the planning. This challenge is effective and significant on both downstream and upstream of the process it affects the downstream as business partners are the one being effected upon the ordering and delivery of the product as without the product delivered they can’t start the next phase of their process; as for upstream this is extremely effective not just as revenue stream but to honor the continuous partnership shipping and delivering the product to customer is critical. Cost control of operating expense in direct and indirect commodity costs, logistic agile costs under pressure upon rising fuel/energy and freight cost, global business partners, technology investment, labor cost of recruits and manufacturing floor, and always the
Chopra, S., Meindl, P., & Vir Kalra, D. (2016). Supply chain management: strategy, planning, and operation (6 ed.). (pp. 439-440). Person. Retrieved October 7, 2017
Chris Summers, vice president of the management company to provide oilfield services Elevalt chain, is devoted to an analysis of their distribution centers worldwide (PED). Should evaluate network Elevalt developing countries across Europe, Africa and the Middle East to see if it would be beneficial to strengthen the existing network of six developing countries in one centralized DC in Europe or Africa. Before this decision can be taken, you should first optimize the current operation, which seems to suffer from inefficient management stocks. Inefficient inventory management also appears to be the engine of the additional transport costs. Summers
(Bowersox, D.J., Closs, D.J., and Cooper, M.B. (2010). Supply Chain Logistics Management. (3rd Edition) New York, NY: McGraw-Hill/Irwin.
Signature Assignment will follow Learning Outcomes #1, 4 & 5 to meet CSLO requirements. This Signature Assignment is a Research Project. It represents the highlight of the graduate student's career and represents the student's achievements and competency in writing, research analysis, the master's program. The Signature Assignment will include a
Market Research Report Fourth Party Logistics Market in the GCC region March 2011 Copyright © 2011 - ACTIOM –All rights reserved Page 1 of 57 Market Research Report Table of Content 1. Executive Summary ................................................................................................................................................. 3 2.
A Research Project Report submitted in partial fulfilment of the requirements for the Degree of BSc (Hons) Logistics, School of Applied Sciences, The University of Huddersfield, 2011.
A RESEARCH PROPOSAL SUBMITTED TO THE INSTITUTE OF ACCOUNTANCY ARUSHA AS PARTIAL FULFULMENT OF AN AWARD OF POSTGRADUATE DIPLOMA IN PROCUREMENT AND LOGISTICS MANAGEMENT. (PGDPLM)
Managing your logistics supply chain can become very expensive, if not controlled effectively. For example, holding stock or inventory for insurance purposes can be very expensive and the stock could be of value but loses its value when it does not sell or becomes obsolete. Operating and running warehouses and distribution centers are expensive considering the building, operation, and maintenance costs involved. A company’s distribution network can be expensive in terms of capital and running costs. It is pertinent that your logistics strategy is well thought out and aligns with the company’s goals and current demands of the market. A company’s logistics strategy must be carried out allocating resources effectively and efficiently to be competitive and successful.