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Oil and Gas: Managing the Managers
ОглавлениеMultinational oil and gas companies like Royal Dutch Shell manage supply chains that are said to flow both upstream and downstream. Shell's upstream supply chain includes all activities involved in the exploration and production of the raw materials, such as offshore and oil field drilling. The downstream supply chain involves the refining process and the delivery of finished products such as motor oil and gasoline to the end customer. In the course of its business, Shell routinely uses third-party logistics providers (3PLs) to manage various logistics activities for its upstream operations. However, the development of unconventional gas resources (such as shale gas) was becoming too costly, was taking too much time, and was proving to be far too dangerous for the typical pool of logistics providers. Too many different 3PLs and local carriers were involved in the transportation of the gases, making both supply chain planning and execution inconsistent.
The answer for Shell was to team up with consulting firm Accenture to develop a fourth-party logistics provider (4PL) solution. A 4PL basically manages all the 3PLs under contract to a company, the difference being that the 4PL only has one client—in this case, Shell. The 4PL, known as Logistics Management Services (LMS), was tasked with developing long-term relationships that would give Shell access to top experts in transportation, logistics planning, technology, and safety. Rather than having the unconventional gas operations spread among various silos (procurement, planning, production), LMS brought oversight to the entire process. The payoff was impressive: Shell reduced its logistics costs by 25% due to better asset utilization, and eliminated roughly two million highway miles thanks to better transportation planning and scheduling. Fewer trips also helped reduce the truck drivers' exposure to safety hazards.20
Shell is also implementing various advanced supply chain technologies throughout its operations. For instance, the company is using analytics-based track and trace technology to gain better inventory visibility throughout the procurement, transportation, and disposal of engineering materials.21 Shell also uses artificial intelligence–based predictive maintenance in several applications—both upstream and downstream—that alert the company when equipment will fail before it actually fails.22