The chicken or the egg? A view of the Oil and Gas Supply Chain

SMS Team / March 2, 2017

The dilemma that has puzzled mankind since the dawn of time is what came first the Chicken or the Egg? Now, I am not going to get too philosophical so stay with me. But if you were to use this dilemma in your company’s supply chain and substitute the chicken with suppliers and the egg with customers. What would come first?

It is not as easy a dilemma as one may think. Companies need suppliers to create the product and services which they sell, so the chicken needs to exist. But then again you need customers to generate a demand for your product so the egg needs to exist.

Aristotle the Greek philosopher concluded when faced with the chicken and egg dilemma that they both had to exist at the same time at least in spirit. Hence suppliers and customers co-exist; we cannot have one without the other.

How does this relate to an oil and gas service company like SMS? Well, traditionally suppliers and customers have had a push and pull effect on the oil and gas supply chain. As emphasised in the recent Oil & Gas UK and Deloitte UKCS Upstream Supply Chain Collaboration Survey, we need to improve efficiency, reduce costs and optimise production by becoming more collaborative. We need to view our suppliers and customers as partners. Collaboration is the key to success in these tough market conditions. With the sharing of resources, data and risk we can ensure that we have an efficient and sustainable oil and gas supply chain.

By listening and understanding to our customers we can cooperate with our suppliers to reduce costs, develop new technology and increase value. So, whether it is a sand monitoring system, a flow assurance package for well testing or a sand management strategy we can all work together to deliver the right product.

There is a saying “Evolve or die” which in this day and age I believe should be “Collaborate or die”.

In summary Aristotle was right! We need each other.

If you want to work with SMS then we would be happy to talk. So get in touch.

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