Question

Share a brief (around 100 words) personal example of a time when supply chain partners were faced with a major or minor challenge. If you do not have a personal experience, then please research an example to share

Your example can explain how this challenge impacted upstream, midstream and downstream operations of the organisation, or it can be a personal experience about working with partners

Describe at least two challenges of your chosen supply chain and comment on how this is applicable (or not) in oil and gas supply chains

Answer 1

Challenge 1 (Inventory Management) - I worked in an organisation where we used to work on Subcontracting model in which we used to buy Raw material & giving it to nearby small suppliers (processors) on loan who were doing further processing and supplying finish material to us, as required. In this model, there was a high impact on inventory turn ratio as whenever there is a change in sales demand, entire inventory is in your account & working capital is blocked. In this case, you can not reschedule the orders given to suppliers as inventory lying at suppliers end also yours. However, we used to get handsome Quantity discount from raw material suppliers due to good volumes.

Challenge 2 (Capacity Assessment of Sub Suppliers) - In my current organisation (Automotive Industry) we need to perform capacity assessment of suppliers in order to address our demand from a particular supplier & fix the share of business accordingly. Generally we consider 80% of total capacity as operative capacity. Here we faced the issue that a particular supplier is booking its capacity for me & at the same time he is offering same capacity to another customer to grab orders. In this scenario, we lost production due to non availability of material on time from supplier who has booked orders from me & other customers for the same facility. To address this, we started doing legal contract with supplier having machine wise details.

I think both above issues are not related to oil & gas supply chain.