Coming out of a period of stagnation and major market challenges, the oil and gas industry is now looking at considerable potential for innovation. This progress hinges on the sector's ability to transform operations around digital technologies, particularly in areas such as the supply chain, where the sector is well-positioned for value creation.
A Changing Oil & Gas Industry Climate
The oil and gas sector has been going through a recession of its own in the past few years, with the cost-per-barrel of oil dropping to such a degree that organizations had to adjust. According to PricewaterhouseCoopers, the sector responded to this shift by:
Laying off workers - approximately 400,000 jobs were eliminated during the past few years.
Slashing projects that were not achieving profitability goals instead of being patient on results.
Reducing capital expenses.
Investing less in discovery and new project rollouts.
"Businesses in the oil and gas sector must embrace digital transformation to keep up with new demands in the sector."
These efforts allowed the market to stabilize, and things are looking up, PwC said. In this new climate, organizations are facing incredible pressure to use digital technologies to improve their operations and become more innovative. In particular, there is a growing need for efficiency improvements in light of the employee terminations that happened across the sector, as they have left many businesses lacking the talent and experiences to handle legacy operational models.
The PwC findings were echoed in a World Economic Forum study that explained businesses in the oil and gas sector must embrace digital transformation to keep up with new demands in the sector. With the oil and gas market facing so many changes, companies have an opportunity to bring about sustainable positive change that balances economic inequalities by delivering value across stakeholders in the industry.
Innovating in the Oil and Gas Supply Chain
Embracing digital technologies can be especially valuable in the oil and gas supply chain. The industry depends on coordinated operations across vast geographic regions with extremely diverse levels of economic maturity. Laying a foundation for digital innovation across these areas of operation can provide visibility into operational efficiency across the supply chain, allow for greater organizational cohesion and give organizations visibility into opportunities for new value creation.
Supply chain innovation can take many forms, such as remote data collection systems that can gather information in facilities with spotty network connection and synchronize with ERP systems when connectivity is restored, and RFgen can help organizations update their capabilities in line with their business goals. Our mobile data collection and ERP integration solutions are laying the base for sustainable innovation in the supply chain. Contact us if you want to learn more.