Service company's adaptation of supply chain to cope with volatile oil and gas market

Abstract

The oil and gas market has great significance across the globe, but the unpredictability in this industry is a huge challenge that affects all the supply chains in this market. These conditions contribute to a competitive and diverse market where service firms struggle to keep productivity in order to lower costs and boost operating performance. This paper gathers data on the oilfield service industry and explore existing literature on service supply chain agility to discover empirically the application of strategies that can be implemented within the sector. The major difficulties and risks faced during an oil crisis were identified through analyses on the performance of the leading global service provider (Schlumberger). Global mobility and supplier related challenges were found to be the main factors that harm the company's capacity to deal with market fluctuations. And the constructive tactics developed to achieve a strategic edge over competition have been used as the foundation of this study. Through executives’ interview, internal documentation research and relevant literature review it was discovered that agility in Schlumberger was attained by establishing supply chain visibility and the development of flexible policies and processes. By leveraging internal capabilities and digital solutions to enhance the procurement activities and overcome the looming risks it´s possible to successfully operate in complex market. A recommendation framework was presented as supply chain managers’ benchmarking scheme. This framework highlighted approaches that can be taken in terms of suppliers, internal capabilities and customers as a way to contribute to greater supply chain agility.