Management briefing

Horizontal planning – integrating across the oil & gas supply chain

Make planning decisions to maximize profit, increase safety and minimize impact

on the environment

Oil, Gas & PetrOcheMicals

Horizontal planning – integrating across tHe oil & gas supply cHain

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Oil, Gas & PetrOchemicals | manaGement BriefinG

The very nature of the Oil & Gas industry makes it complex, capital-intensive and risky. Even the most effective processes, modern machinery and skilled workforce struggle to keep up with ever-changing prices, regulations and technology. Reaching new sources of crude is difficult, expensive and often controversial. Natural or man-made disasters can knock the strongest players out of the race.

With so many outside stressors, the last thing an Oil & Gas company needs is to put further restrictions on itself. However, many do just that by refusing to see or take opportunities that would significantly improve performance. To see these opportunities, all that is needed is a wider view of the supply chain.

Gaining control of a volatile product

in a volatile market

Horizontal planning – integrating across tHe oil & gas supply cHain

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The synergy of integrationHorizontal planning is about seeing – and treating – the value chain as a collaborative whole. Because that is exactly what it is. Even a planning decision which is good for production, for example, can have negative repercussions further down the supply chain. There is little point in optimizing production of a material which then has nowhere to go.

Worse still, there is the likely danger of a snowball effect: a decision that causes a smallish delay in one business can result in bottlenecks and other delays that add up to great costs.

Horizontal planning – integrating across tHe oil & gas supply cHain

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Oil, Gas & PetrOchemicals | manaGement BriefinG

Top reasons companies resist integration and why they should reconsider

The Oil & Gas industry understands better than most how to measure return on capital investment. The best planning solution should be able to demonstrate how it can improve margins, safety, etc.

The question arises – how can one solution take into account the hundreds, or even thousands, of variables that affect every decision. The beauty of the answer is that that is exactly what the solution was built to do. Technology has long surpassed the human brain in its ability to process large amounts of data in small amounts of time.

An investment of time as well as money is required to implement any new system. However, a successful implementation causes minimal disruption to operations.

The best planning solution is able to prove its effectiveness at the demonstration phase, even before a contract is signed.

The latest information technology allows interfaces between planning and scheduling and other corporate information systems to be easily implemented and maintained.

Companies may perceive too high a risk in replacing legacy planning solutions across the supply chain all in one go. For this reason, it is essential to choose planning software that is flexible enough to provide a solution for the entire supply chain even if the initial scope is only for a specific part of it.

Concern over... However...

Cost

Complexity

Downtime

Effectiveness

Interfaces

Scope

Horizontal planning – integrating across tHe oil & gas supply cHain

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Just like a single decision can incur far-reaching costs and delays, it can also help reduce costs and speed up

processes. With full visibility and integration across the

supply chain, companies can make the best decisions to maximize profit, maximize

safety and minimize the impact on the environment.

Horizontal planning – integrating across tHe oil & gas supply cHain

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Integration across the supply chain cuts

costs, lowers risks and maximizes sustainability

In addition to ignoring interdependence across the supply chain, the most common, yet fundamental, gap lies in ignoring two of the industry’s three top business priorities. Planning is made for return of investment but not for safety or sustainability.

These limitations prevent solutions from even carrying out their single goal of minimizing costs because decisions made on incomplete information often result in more costs than savings.

Horizontal planning – integrating across tHe oil & gas supply cHain

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Optimizing for industry KPIs

Costs are saved by processing a higher percentage of low-cost crude to satisfy product demand.

All equipment constraints are taken into account.

Energy consumption, and therefore, emissions are reduced.

Refining

Optimizing across the entire value chain increases throughput.

Risk is reduced through better maintenance planning.

Balancing production, processing and shipping reduces flaring.

Processing

Costs are saved when opportunities for product exchange become visible and routes are optimized.

There is improved customer satisfaction and less of a chance of losing customers due to late or non-delivery (ATP, CTP, PTP functionalities).

Emissions are lowered when opportunities for product exchanges become visible, when routes are optimized, etc.

Distribution

Improved planning of oil and gas transportation can significantly reduce safety stocks.

Minimizing the amount of material and the distance it is transported reduces risk.

Optimizing transportation reduces associated emissions.

Transportation

Improved planning and scheduling of resources can reduce the risk and cost of exploration.

Ensuring the right people are in the right place at the right time helps to reduce risk.

Improved planning reduces the risk of polluting marine environments and waterways.

Exploration

Having complete information when making decisions optimizes production to minimize the risk of market volatility.

Scheduled maintenance across the value chain reduces risks posed by machine malfunctions, and cuts the potential costs of delays (snowball effect).

Improved planning helps reduce air emissions and water pollution.

Production

Priorities of the oil & gas industry

SustainabilitySafetyReturn on capital investment

Horizontal planning – integrating across tHe oil & gas supply cHain

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Oil, Gas & PetrOchemicals | manaGement BriefinG

Offices: www.quintiq.com/locationsEmail: info@quintiq.com | Web: www.quintiq.com

You can’t fix – or optimize – what you can’t see.In the Oil & Gas industry, planning solutions fail to deliver simply because they close their eyes to two of the industry’s most fundamental truths. Not seeing the full picture is the main reason why planning solutions fall short.

1. Processes across the supply chain are interdependent 2. Profit is just one of the industry’s top priorities