Submitted by: Submitted by troyrock
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Words: 4204
Pages: 17
Category: Business and Industry
Date Submitted: 09/04/2016 05:12 PM
Troy Rock
Florida Institute of Technology
Research Paper
Supply Chain Process in the Oil and Gas Industry.
MGT 5069
June 18, 2016
Introduction
The definition of supply chain management, it is described as being the set of processes in a firm that
are implemented to maximum customer satisfaction while operating at a lowest cost possible to achieve
maximum profits. In the oil and gas industry supply-chain, the profitability of a firm is hinged upon its
upstream suppliers and its downstream distributors as various forms of raw materials such as oil, fossil
fuels, equipment, resources, finances, and information flow through from the top-tier parties all the way
down to the customer. The customer is not only the average member of the public that is pumping fuel
into their vehicle, but it can be airline companies, cruise-ships, plastic item manufacturers, independent
gas stations, etc. Regardless of who is the end-user customer of the oil and gas firm, processes must be
put in place to ensure that the supply chain surplus is maintained for all links in the supply chain, from
the upstream drillers, down to the points of purchase for the consumer. Currently the price of oil has
sharply dropped in the year 2015 and 2016 due to an overabundance of supply, and though a fear of
scarcity was once a concern, that is not the case now. The main objective the oil and gas firms face are
delivering the abundance of raw materials, going through the various production operations, meeting all
of the consumers’ needs, and managing to survive this period of low gas prices and reduced profit. Every
oil and gas company wants to find and produce oil, but with regards to the environment, locations and
the respective trade lane they are facing more challenges and obstacles. Therefore optimal logistics and
supply chain solutions have to be applied in order to find the best way from the reservoir to the refinery
and to keep the supply chains as smooth and visible...