Logistics costs play a very important role in midstream business.
After all, logistics determines whether our energy business flourishes or withers.
1. SUPPLY CHAIN MANAGEMENT MOVES CENTER-STAGE
In recent years, we have seen an increasing shift in the economic activities of sales towards supply chain management, which plays an increasingly important role in daily sales business in order to deliver products to customers on time. To what extent these activities protrude outwards, and to what extent artificial intelligence is an essential component in driving these activities forward to save time and money, I would like to explain in more detail.
2. TIMING BECOMES A REAL PROBLEM FOR ENERGY COMPANIES THAT WANT TO EXPAND GLOBALLY
Artificial intelligence underlies the complex logistics processes of the modern energy world. The increased use of computer systems in logistics enables considerable time and cost savings. In offshore projects, technical components are often delivered just in time. Technical articles are kept on reserve, but they should be used as soon as possible.
In certain cases, external companies are also contracted to manage the logistics processes and take responsibility for the delivery of technical equipment. However, this is not always the rule in the energy industry. The oil and gas industry in particular is increasingly interested in the just-in-time delivery of technical components, as has been the practice in the aviation industry and aircraft construction for many years. This is becoming problematic for smaller energy companies which, due to their size alone, are unable to set up independent logistics processes worldwide.
During the coronavirus pandemic we have seen how vulnerable companies are. You really must have spare parts in stock.This can seriously damage the success of an oil platform and cost an enormous amount of money. In such cases, the oil companies are willing to pay a lot of money to get the spare parts as quickly as possible.
3. JUST IN TIME DELIVERY WILL BECOME AN IMPORTANT PART OF EVERY ENERGY COMPANY’S OPERATONS
The use of artificial intelligence in logistics enables the company to plan in advance where technical components are needed at that precise moment. This happens worldwide, with the aim of using these resources as effectively as possible. This is one of the most important advantages of data-centric logistics, which allows technical components to be tracked.
In the case of cross-border energy supplies or cross-border waste supplies in waste management, documentation used to be a major problem. The time needed to transport waste from one place to another has been drastically reduced. The reason for this is that more and more processes are handled electronically. More and more processes can be handled globally.
4. SUPPLY CHAIN MANAGEMENT WILL LINK UP WITH FINANCE, SALES & MARKETING, CUSTOMER CARE, ASSET MANAGEMENT
As more and more data on transport and logistics becomes available, energy companies will try to integrate this data into their existing processes. This will not only lead to cost reductions, but also to supply chain management becoming a central pillar of the company itself. Logistics will be at the heart of the company’s operations, as it connects all points of the business.
Supply chain management links the physical assets that the company owns with inventory, financial income streams, customer relationships, sales and marketing, as energy companies become energy service providers. In the case of B2B transactions with other companies, energy businesses work side by side with customers. This requires a high degree of agility to solve customer problems in time, which requires sophisticated supply chain management.