Over the years, the oil and gas industry has faced a major challenge of optimizing an effective end-to-end supply chain, especially when it has to do with the planning, drilling, and refinement of the raw material as well as the stocking and retailing of the end product to the final consumers. More often than not, these result from the complexities associated with the irregularities of the price at specific times. Undoubtedly, the downstream sectors’ procurement and supply chain operations are the most pivotal factors that shouldn’t be overlooked if maximum productivity wants to be attained.
The history of inventory management dates back to 50,000 years, a period when downstream experts used tally sticks, clay tokens, hands, and barcode readers to record the number of oil tanks in their warehouses. With the advent of innovative technologies, computer software has replaced these manual strategies, creating room for zero downtime, human errors, and limited sales.
In today’s oil and gas business landscape, several industries use various inventory strategies, often interchange inventory control with inventory management. Though both methods share similar characteristics, they both mean different things. While inventory control deals with managing the stored products to make them available to the consumers, inventory management does more. Inventory management covers the planning, manufacturing process, storage and tracking of the manufactured products from the storehouse to the sales points.
In a time and result-oriented world like ours, business owners are ready to do anything to manage cost, beat time, meet customers’ needs and increase income.
Why should a sector like oil and gas enhance its inventory management strategies?
To effectively make decisions that promote visibility and transparency of information and sales across all systems, the oil and gas enterprise needs to implement an inventory management solution that is effective enough to produce its laid-down goal because poor management of inventories could be a smooth way to failure.
One of the challenges of opting for an inventory management solution is the confrontations that small-scale and some large-scale businesses face in dealing with the market’s competitive pressure and having access to adequate inventory tools. Rather than focus on these challenges, below are a few benefits a well-engaged inventory management solution provides for every business, irrespective of size.
Benefits of an Inventory Management Solution
Optimised database security and visibility
Modernising inventory management has enabled businesses to restrict users from accessing inventory programs. This restriction prevents the company from experiencing cyber theft and responding quickly to potential cyberattacks. Aside from the security that inventory management makes available to a company, it also helps the management team decide on important business matters. These decisions are influenced by utilising the accurate information provided by the inventory system, saving the team the hassles associated with manual errors and cost management.
Automated and seamless business operations
A business experiences automation by adopting software that guarantees smoother and more productive business operations. Automation reduces human errors, channels labour to other business activities, and focuses on increasing the quality of the products while operating from a time-sensitive zone.
Boosts business relationships and customer experience
One of the most efficient ways an inventory management solution can increase the general performance of a business is by strengthening existing business relationships and creating new ones. Trust is built, and relationships are solidified by responding quickly to orders and fulfilling customers’ desires to enjoy quality products. When customer’s needs are met, such a company will experience new levels of loyalty and trust that leave a long-lasting impression in the customers’ hearts.
Reduction in inventory costs
The sole purpose of inventory management is to effectively control the obsoleteness of stocking finished goods for more than necessary. Because of potential fluctuations issues associated with various industries, an inventory system creates the opportunity for companies to manage their stock market and avoid stocking products that could affect sales or tie down the cash flow.
Having stated some key benefits of optimising the inventory management system, here are a few possible challenges affecting inventory management and RockEye’s solution for downstream oil and gas industries.
Unstable Demands and Market Structure
The instability in the demand for oil and gas at specific periods has made it almost impossible for companies to forecast the right amount of stock that meets customer’s demands. Also, a price and market trend fluctuation can lead to a surplus or shortage in production, resulting in time and resource wastage. To overcome this challenge, you need to leverage RockEye‘s inventory management automated solution that gives you access to critical and real-time information that improves your regular forecast decisions. Your rest is assured because RockEye’s 100 % reliable and accurate data gives your logistics a trouble-free experience.
Lucidness in Supply Chain
The transparency of a supply chain plays a significant role in the management of inventories. In an industry like oil and gas, an invisible supply chain operation could eliminate the possibility of responding to the irregularities associated with it. Hence, an omnichannel strategy becomes the next best approach to enhance production, optimise movement, and flexibility of business operations. RockEye’s inventory management solution is a futuristic approach that allows you to have control over your supply chain, decrease downtimes and storage costs, and an opportunity to obtain information about your warehouse, manufacturing and distribution processes.
Assets and Equipment Management
The management and availability of assets significantly impact the development of the oil and gas sectors. In a situation where there is the unavailability of the right equipment for production or distribution, there will certainly be a notable decline in production, delays in delivery and a rise in customer dissatisfaction. With RockEye’s inventory management solution, you are no longer burdened with equipment or machine breakdowns and unavailabilities. This innovative solution allows you to keep track of your inventory through advanced features like batching, barcode, and tagging. Once you have the proper data on your inventory, you can consistently check their conditions while taking note of possible breakdowns. Your mind will always be at ease knowing your assets and equipment are safe.
Government Regulations and Policies
The ability to comply with all government policies is another factor that threatens the inventory management system of the oil and gas industries. The challenge of abiding by external laws governing this sector often seems daunting because of the cost involved. From providing sufficient and sophisticated equipment to ensuring preventive measures in emergencies, some small-scale businesses will have to go the extra mile to provide the necessary cost, which may take a while. To stay above this hassle, up-to-date information about government policies and regulations is stringent. RockEye’s real-time data gives you a clear understanding of customers’ behaviours, new policies on fuel sales and updated government inventories. These can be done with integrated software that permits small businesses to manage their inventories without purchasing multiple assets.
Storage and Delivery
The next best inventories after production are storage and the transportation of the products to the consumers. When a company faces inadequate storage capacity and poor logistics, such shortcomings can lead to mass wastage. A storage management solution like RockEye’s assures you of stock optimisation and delivery processes that allow you to manage your stock economically. To get access to smooth and efficient logistics, you can bank on our fleet management system to supply you with the current status of your vehicles right from your warehouse to the designated locations.
What do you look out for in inventory management?
As the future of inventory management revolutionises with innovative technology solutions, downstream oil and gas companies should be on the lookout for:
- A technology that supports hybrid operations.
- Machine learning development with artificial intelligence.
- Accurate data for predictions.
- More automated warehousing systems, vehicles and mobile robots.
- Multiple storage facilities.
- A third-party logistics (3PL) that relieves small businesses of the cost of investing hugely in logistics.
- Smart inventory for accurate forecasting.
- Stable protection against fluctuations in price and stocks.
- Internet of Things (IoT) for a sustainable and tough supply chain.
- Seamless e-commerce operations that improve customer service.
Considering everything in this article, small-scale businesses and large enterprises must scale up their operations using smart inventory management solutions. Inventory management assures you dominance over your products’ production, storage and distribution and expands your customer service experience.
Do you wish to find out how to enjoy these benefits without worrying about purchasing too many inventories? Visit us now at https://www.rockeye.africa/solutions/inventory-management.html.