SCT: Oil Market Downturn


Is Your Supply Chain Fit to Endure Oil Market Downturn?

Your company’s supply chain strategy is just as important in today’s depressed oil and gas market as it has ever been. With supply chain organizations minimized and operations and sales frantically chasing revenue, companies are quickly slipping back into antiquated patterns which have been proven ineffective for enterprises, armies and empires for as long as ventures have existed. 

Oil and gas companies are being forced to deal with the threat of drastically reduced revenues over a prolonged period of depressed oil prices. In essence, they have been continuously devalued over the past two years, affecting all personnel within the industry. Basic supplies are being obtained by any means at the lowest cost to resources. While a few suppliers may outlast this extended down market, many companies will be left too weakened to aggressively pursue market share once conditions change. 

Compounding future risk, suppliers are quickly disappearing, dissolving or finding new markets to avoid the downturn of the energy industry. The procurement and sourcing skills have atrophied, and the thinning supplier market is quickly causing shortages and high prices for essential goods and services.

Conditions will change, and there will be a time to charge back into the field in search of a greater market. A time will come again when prosperity depends on aggressively capturing new business. Who will be fit to fight in the eventual turnaround? Those who exhausted themselves, gutted their support processes and organization, neglected their supply chains and dissolved strategic supplier relationships will likely falter. Such companies have only retained the ability to maintain their stance in a landscape of retreating competition.

The new winners will be the companies that can go on the offensive and effectively supply aggressive new operations to gain market share. They will ensure stability of supply for new business and continue to meet stringent quality and regulatory requirements. The great energy companies of the future will be those that use this downturn to build lean, scalable and strategic supply chains. 

To learn how SolomonEdwards can help your supply chain achieve the savings you need today and position you for success, regardless of future conditions, please contact Josh Hirshman or Brian Bidigare. Follow SolomonEdwards and our Supply Chain Transformation pages on LinkedIn for more insights and updates.