8 Supply Chain Management Tactics used by big Energy Brands

With volatile demand and prices, dwindling reserves and rising costs, (downstream) energy companies are eager to gain operational insights and optimize their supply chain. To complicate matters, regulations are getting more stringent. Given this market landscape, companies in the energy industry need to embrace new approaches to supply chain management and start leveraging data to provide cutting-edge services if they want to stay competitive. This article focuses on oil and gas downstream processes within the energy industry.

This guide discusses the following supply chain management and optimization tactics:

1. 1. Automation and digitalization:
      Find out how companies in the energy industry are using advanced analytics and automation to make better decisions based on data, gain visibility and be more efficient at supply chain management.
   2. Vendor Managed Inventory (VMI):
      Energy industry leaders go beyond on-time deliveries or meeting the agreed SLA. They focus on customer success, building long-term partnerships and delivering high-quality customer service. Many energy companies have achieved this by offering a Vendor Managed Inventory (VMI) service to their customers.
   3. Peak shaving:
      Demand variability is a given. For instance, when a product is used for heating, it sees higher demand in colder periods. As a supplier, balancing deliveries to cover these usage peaks is a big challenge. Peak shaving is a tactic that can help you size resource capacity and address any supply-demand bottlenecks.
   4. Real-time dynamic planning:
      Energy industry leaders are in control during the execution of the schedule. This means they can successfully avert extra costs by adjusting plans in real-time.
   5. Customer success:
      Informing customers about order details and delivery times is now a best practice to drive customer success. This data-driven capability is also beneficial for planners who need to update the schedule quickly.
   6. Transportation intelligence:
      Transportation in the energy industry is a costly business. Together, inventory and transport make up 80% of operational costs. Leading energy companies invest in transportation intelligence to excel at supply chain optimization.
   7. Dynamic sourcing and depot allocation:
      Depot allocation is a difficult puzzle. To do it right, planners need to consider product availability, capacity and exchange contracts. Find out how this is handled by energy industry leaders.
   8. Centralized planning:
      Suppliers with multiple depots usually plan customer deliveries locally. This allows personnel to oversee what happens at each depot. But this approach has its disadvantages. Each depot has its method, employs its own personnel and makes separate use of its resources. There is no exchange of best practices and experiences, and no exchange of resources and capacity. Energy industry leaders remove planning and data silos to improve supply chain optimization.