National Buyer and Seller Forum: Shrinking Supply Chains Require Change
Published on April 12, 2010
The economic turmoil facing most oil and gas companies over the past year indicated the need to diversify and adapt to changing demands and technologies. The National Buyer and Seller Forum, held in Edmonton during March 23-24, provided education on these new realities facing the heavy oil, oil sand, and natural gas sector. Markets are now forced to adapt to reduced costs and tight fiscal budgets, making it crucial for companies to find new ways to be successful in this dynamic environment. A major presentation at this event focused on the changing nature of Supply Chain Management by Steven Melnyk of Michigan State University, who has researched supply chains for over twenty years.
Supply chain relationships are becoming a critical aspect of the oil and gas sector. When times were good, companies only focused on bringing in oil and gas as fast as possible. Product development was the main concern, with no need to develop supply chain relationships. However, with the new realities of today, including fiscal restraints and development of environmental and process technologies, this is no longer effective. They cannot just provide buyers with components; they have to provide them with solutions that fit the complete corporate culture of their customers.
Supply chains are shrinking, and sellers must differentiate by increasing the value of the customer. As such smaller companies are amalgamating to form larger suppliers that can provide solutions at every step of the supply chain.
Industry Players in Alberta need to respond to these signals, and put more emphasis on the supply chain to promote growth and sustainability. Pete Loignon, Innovation Facilitator, of the Economic Development Alliance of Southeast Alberta (EDA), attended this seminar and states” there needs to be a group effort in supply chain management. It is now important for groups to be responsible for each other and work together. Failure to do this will result in bad business practices.” The EDA has been working with the Oil and Gas sector to identify new trends in the industry, as well as by communicating new markets and business opportunities local companies can get involved with.
For more information on supply chain management, please contact the EDA office at 403-488-7015.