Importance of material management in the oil & gas industry cannot be undermined. Projects related to this industry is often capital intensive. The reason is that the oil and gas sector projects are usually high budget ones but at the same time they also run on tight budgeting and scheduling. The project also requires effective management of purchases, supplies, decisions on staffing and contract negotiations. Most of them come with set deadlines as well as bottom lines. Keeping in mind these it cannot be overlooked that there are great differences between smooth and efficient project implementation dispensing with delays and inconveniences. Effective material management is therefore an indispensable necessity in the oil and gas industry.
Understanding Material Management in the Oil & Gas Industry
To learn about the importance of material management in the oil & gas industry one needs to understand the core concepts, definitions and objectives of the process. Usually materials management refers to regulating the type, quantity, placements, movements as well as production and distribution of finished products. The task of the manager involves planning, controlling, directing, as well as coordinating all the related activities that are necessary in either material as well as inventory management. In addition; the process also involves carrying out tasks like logistics and supply chain management that could be local, national, or international.
How it Works
Process of materials, logistics, and supply chain managements all starts with the determination of the quality as well as the quantity of the items to be managed. The process ends with the issuing of the finished products to the customers as per their requirements and orders placed. It is also important that the delivery is according to the schedule. Materials management is the most basic function in the oil and gas industry related businesses and they add value directly in the product delivered. It also encompasses other activities like international logistics management besides supply chain management. The process is an all-inclusive one and covers every step from the designing and manufacturing, production, storage and supply, and delivery to the customers.
Logistics and Supply Chain Management
An integral part of the materials management is the Logistics and Supply Chain Management. This means the task of the manager is to ensure that the steady flow of materials are never stopped and at the same time they remain commensurate with the trends of demand, price, quality, and availability without forgetting the delivery schedules to be followed. In short; the material management is one of the most important functions for any organization that covers aspects such as input process. Important ingredients of the process are raw material and equipments and their procurements and management including spare parts for effective maintenance. In the realm of production it is the initial transformation process. Also as most of the oil and gas industrial houses are multinationals, an important part of the material management is also the international logistics management.
Task of the executives and workers involved in material management is appropriate planning and programming for all aspects of the management process from procurement through delivery. Since it is a technical process obtaining the services of highly experienced and competent professional agency for material management can be a very good move for any oil and gas enterprise.