Agility Beats O&G Market Volatility
Posted: May 27, 2020
The amount of risk and uncertainty in the Oil and Gas industry is unprecedented!
- When will demand increase?
- When will supply level out?
- What will prices be in 3 months, next month, or later this afternoon?
Your guess is as good as mine. We just don't know the answer. While there is no way to predict the length of the current pandemic or the crude price volatility, you can help your refinery navigate risk and manage uncertainty by rapidly reacting to market volatility. Production planning needs to be flexible. Planning needs to change with the market in as close to real-time as possible without sacrificing the health and safety of your workers.
Rapid reaction to market volatility allows you to take advantage of any economic opportunities and quickly react to every change. The agility of running scenarios to build short and long-term plans for maximum profit and the best use of assets will define which companies emerge from this downturn successfully.
Plan faster than a fast-changing market!
This is where AVEVA comes in. You need to plan faster than a fast-changing market. Save millions in a single planning scenario run with AVEVA Unified Supply Chain in the cloud. The AVEVA Unified Supply Chain environment enables users to understand the implications of their decisions on the business as a whole, helping users concentrate on the economics and engineering in a safe and responsible manner.
A critical aspect of ensuring success, CLOUD COMPUTING, allows the solution to scale, increasing the number of scenarios that you can evaluate in a timely manner.
In 2017, BP moved several applications to the cloud, including its unified supply chain management platform from AVEVA.
The solution was so successful that Claire Dickson, CIO of downstream at BP, made the following statement:
"Believe it or not, for the same data set, the same crude, and feedstocks, the same units, what used to take us seven hours to run now takes just over three minutes. I have to admit I didn't really think that we'd get that out of cloud, so it has been quite revolutionary for us."
Revolutionary. That is the cloud. Cloud computing must be considered going forward. It is a competitive disadvantage if you don't utilize this technology.
Crude purchasing is just one area where this is useful in the current environment. AVEVA Unified Supply Chain in the cloud allows you to scale your decision making. You can go from running 10 cases to 100,000 cases in the same amount of time in the cloud. You can evaluate scenarios to find favorable conditions within your contractual obligations, enabling you to take advantage of the current environment, faster than your competition.
Amid all the tactical decisions to keep your company afloat, it is crucial to take a step back and think about your long-term strategy. The Oil & Gas industry has faced similar downturns in the past, and the current one is unlikely to be the last. Therefore, refineries should take this opportunity during the slow-down to future-proof their operations so that they are in a better position to survive the next downturn.
To genuinely future-proof your operations, you must think about the value chain in its entirety. The value leaks within your value chain are often related and interdependent across different areas. Optimizing the value chain and digitally transforming the business requires acknowledging the complexity of the problem and creating a plan with measurable goals.
This is done with a consistent representation of the value chain so that personnel don't need to spend energy determining which point-solution has the correct numbers, instead of collaborating to enhance the overall value chain. This consistent model starts with Unified Supply Chain, continues to Operations, and finally continues to Optimization, all within the same AVEVA platform. This is called Value Chain Optimization.
You can learn about AVEVA’s Value Chain Optimization solution in this free whitepaper.