In today’s environment of low commodity prices and reduced earnings, oil and gas companies need to be more innovative than ever in optimizing the efficiency of their supply chains. Unfortunately, many firms overlook the possibility of outsourcing their supply chain management. Business process outsourcing, or BPO, for supply chain functions, can increase efficiency while cutting down costs, ultimately making for better overall operations. Here are just a few of the reasons that large oil and gas drilling companies should explore outsourcing to a company like RigServ, which specializes in supply chain management for their industry.
BPO Partners Can Bridge Technological Gaps in a Company’s Operations
Although this is gradually changing, the oil and gas industry has been somewhat slow to adopt cutting-edge digital technologies. Such rapid adoption of technologies is a challenge for businesses trying to manage numerous processes simultaneously. For specialized BPO firms, however, it is much easier to stay up-to-date with the latest tech trends in one specific business niche.
This increased ability to bring technology into operations is especially beneficial in highly dynamic fields like supply chain management. In fact, data analytics and more complex global supply networks have practically transformed this field in recent years. Supply chain BPO partners like RigServ keep up with these developments so the businesses that hire them don’t need to.
Outsourcing Makes Major Changes Easier
As any executive will attest, the continuous change in today’s marketplace can be a major challenge, especially for larger firms. Much like technological adaptation, BPO companies remove the burden of continuous change from the companies they serve. BPO companies focus on specific areas of business, which means they have fewer difficulties executing major changes in their operations than do larger firms trying to coordinate internal changes across different areas of operation.
Supply Chain BPO Can Lower Costs
With oil and gas revenues down nearly 50 percent since the commodities collapse of 2015, operational expenses are now more important than ever to oil and gas companies. Supply chain management has been identified as a key area of focus for businesses that want to bring down day-to-day operational costs and thereby offset some revenue losses.
Eliminating waste is a major component of saving with better supply chain management. For example, in the oil and gas industry, a great deal of waste occurs in shipping spare parts to offshore rigs, as well as in freight and transit costs. Reducing such wasteful spending and time expenditures can help companies operate at lower costs, improving profit margins across the board.
BPO Makes Finding the Right Talent Easy
If you’ve been in the business world for any length of time, chances are you’ve seen instances in which a ill-suited candidate was put in an important position just so it could be filled. With a BPO arrangement, your company no longer has to worry about finding the ideal talent for critical supply chain management positions. With RigServ, you can focus on core business operations while we put the right-sized team of talented, specialized professionals to work on the various aspects of your supply chain.
Pitfalls of BPO
For all of its advantages, BPO does have its drawbacks. One of the key pitfalls of outsourcing supply chain management is the initial change management required. Although outsourcing does save companies the hassle of ongoing internal change management, some organizational changes must be made when supply chain management is no longer handled internally. In addition, BPO firms and the companies that hire them will still need to maintain a close relationship for handling business changes over time.
Another drawback of BPO is the need for performance monitoring using predetermined metrics on an ongoing basis. There’s no sense in outsourcing a business process, especially one as critical as supply chain management if you can’t monitor the results and see a definite improvement. This monitoring is something that should be facilitated as much as possible by the BPO partner company itself. RigServ, for example, offers a dashboard feature that gives users access to the most important metrics related to their supply chain functions.
How RigServ Can Benefit Oil and Gas Companies With BPO for Supply Chain Management
For oil and gas companies looking for new supply chain management options, RigServ offers an innovative and efficient set of comprehensive solutions. With a RigServ outsourced supply chain, businesses can:
- Reduce overall supply chain management costs by up to 20-30 percent
- Reduce freight costs by up to 20 percent
- Cut down the time required to put away shipments offshore or at remote sites by as much as 70 percent
- Reduce PO cycle times by up to 30 percent
- Cut container usage by 50 percent
- Reduce waste in offshore parts shipping by as much as 70 percent
- Lower inventory count times by up to 40 percent with our barcoding system
- Have a lean, optimized team that delivers excellent operational results
- Readily track supply chain metrics as needed
RigServ offers complete solutions for oil and gas companies looking to take advantage of BPO for supply chain management. RigServ also provides compliance, global procurement, data management and systems support services, among others, for a smooth and efficient supply operation.