ARC Analyst Larry O’Brien has recently published a report on ARC’s Client Portal regarding the recent work between Kinaxis and Exxon to develop a Supply Chain Management Solution specifically for the Oil and Gas industry.
The oil and gas industry supply chain is one of the most complex in the world. It involves myriad complex production assets both onshore and offshore, transporting highly volatile products around the globe through pipelines, tank farms, ports, ships, rail, and truck. The end product could be gasoline, petrochemicals, natural gas, hydrogen, or any of hundreds of products from asphalt to motor oil.
Despite this complexity, or perhaps because of it, it would seem no comprehensive supply chain management solution has really existed to help the oil and gas industry, as well as other commodity-driven industries like metals and mining, for example, achieve a unified view of their supply chain. Having this unified view enables end users to react in a quick and agile fashion in the event of a supply chain disruption.
Supply chain disruptions are becoming all too frequent, as changing global economic policies, cyber-attacks, and increasingly volatile geopolitical tensions and regional wars have had a direct impact on the oil and gas supply chain in just the past couple of years.
ExxonMobil realized the need for a supply chain solution that enables rapid response to supply chain disruptions, and the company is working with supply chain management provider Kinaxis to create a next-generation, comprehensive supply chain management solution for the oil and gas and other commodities-focused industries.
Supply Chain Challenges in the Oil & Gas Industry
The oil and gas supply chain is notoriously complex and sensitive. The supply chain starts at the source, where oil and gas are extracted from the earth at either onshore or offshore facilities. From there, it’s a detailed maze of transport, logistics, and scheduling. In between, there is the downstream sector, which involves activities like processing, refining, and the production of petrochemicals and other hydrocarbon-derived products.
Throughout every step of the supply chain, complex regulatory and safety requirements exist that may differ in every major geographic region. It’s difficult to think of an industry with more complex and challenging supply chain requirements. However, many of the other commodity-focused industries, such as mining, metals, and pulp & paper, share similar supply chain challenges.Due to the complexity and scarcity of available solutions, such as advanced planning systems, the oil and gas industry has historically relied on customized or semi-customized solutions, often involving numerous spreadsheets and manual processes.
Moving to Supply Chain Resilience in a Complex World
Disruptions to the oil and gas supply chain can have serious consequences for end users. The industry needs more comprehensive supply chain solutions that increase resilience, provide complete visibility across all aspects of the supply chain, and enable swift responses to business challenges and opportunities.
Kinaxis and Exxon are collaborating to digitalize various sectors of Exxon’s business. They aim to leverage Kinaxis’s Maestro software to enhance planning and decision-making processes. Through this collaboration, the two companies aim to share solutions tailored to the oil and gas industry, which currently lacks supply chain management solutions that cater to their specific needs.
