Global Supply Chain Management Business Essay

Supply Chain Management At A Global Level

Boddy & D., (2008) state that there are enough oil and gas coffers currently globally. These reserves would be adequate to satisfy the demand for oil and gas worldwide for a period to come. The key challenge that the oil and gas corporations face is tapping the existing oil and gas resources and enabling it reach the final consumer at an affordable price. This is only achievable through an effective and efficient supply chain, which is rooted in management. As a number of corporations, globally have been successful in establishing a global supply chain they have failed in establishing a productivity culture, regulation, and thus ultimate satisfaction. One of these corporations includes Schlumberger. This corporation is the world’s leading oil field service company supplying information, integrated project management, and technology for diverse oil field operations. Currently the corporation offers job opportunities having a staff inventory of seventy seven thousand employees with 140 distinct nationalities. In addition, their operations are underway in 80 distinct countries in the world (Agency, 2009).

Schlumberger conducts its business through 33 Geo-market regions, which are segmented into four geographical areas, Latin America, Africa, Europe, Asia, and the Middle East region. The Geo-market makes available a single point where customers can meet and thus able to connect with other geographical teams. This enables the team to be able to satisfy local demands and give customer solutions. The oil field business is a rapidly evolving business and is in eighty distinct countries. Schlumberger oil and gas industry has had difficulties in meeting its managerial objectives, which is being a global leader in Supply Chain Management (Mentzer, et al., 2001).

This management scope is in two groups, one is the factor of cost, which is crucial to the supply chain of any corporation and more specifically with the current economic uncertainty. Second, is the significance of having a normal organization and execution across the corporation that is based on methodical approach for the administration team. This would enable the company deal with the managerial disputes like transition and physical influence in relation to the supply chain administration, which exist around the distinct geographic constituencies. It is because of the sophistication, heist of global activities, and the scheme that relates to poor directorial administering of multifaceted Supply Management (Boddy & D., 2008).

The objective of this paper is to have an over view of the output regulation system and its management. In addition, this paper addresses key aspects in the oil and gas supply chain and the physical association of resources but in consideration of the regulation mechanisms utilized in administering the knowledge worker. It also provides solution to the management of sophisticated supply chain by addressing disputes that have been highlighted above and include considerations towards the managerial organization of the corporations.

Supply Chain administration at Schlumberger Exploration phase-Production-Refining-Marketing-Consumer

The oil and gas industry activity begins at the exploration phase and then moves on through a range of stages indicated above which includes transfer of commodity from one point of the supply chain to the next and the final point is when the commodity is delivered to the customer consumer. These phases illustrate the connection points in the supply chain as they represent different entities in regard to the activity taking place. Some of these activities include output regulation, distribution, transportation and marketing. Each linkage stage can stand for a given corporation but the common purpose throughout the linkage is to supply product to the customers’ at the most fair price. Aside from this long-term preparation, which is at the core of the oil and gas industry is because of the cost proposition connected with the time dependency in oil and gas business activity (Chima, 2007).

The business activities of Schlumberger are based on investigation and manufacture operations. This is where majority of the actions are repetitive. Hence, it is significant to guarantee that each element in the supply chain reacts quickly concerning the material needs and should contain dependable suppliers since the unpredictability and indecision connected to supply and demand within the Supply Chain Management is a key challenge. The ability of overcoming these factors at Schlumberger is perpendicularly integrated backwards in that it creates some of its resources utilized for gear for a range of production and exploration operations, which takes place in an in-house manufacture in a range of developed centers in distinct geographic areas (Chima, 2007).

The Schlumberger Corporation has both internal and external clients who are situated across distinct parts across the global region. The vertical integration leads to abridged inventories, non-productive activities and less quality checks. There is importance in having an effective and efficient regulation system across the supply chain as it requires the SCM (Supply Chain Management) to be well organized. This is because other activities are dependent on this kind of system such as acquisition of resources and certain other resources (materials, equipment, labor, and technology) which flow through different geographic regions. These regions include North America, passing all other regions towards the Far East. A well-timed delivery of these resources is significant since the production of one activity is the contribution for the 2nd phase of activity and the cost proposition connected with the business environment in regard of engineer downtimes could be massive. In addition, to the supply chain at Schlumbeger corporation gaining more convolution because of the participation of a cultural variety backgrounds and job ethics across different geographic regions thus avoiding going into the details of the cultural features of the supply chain (Firms, 2004).

The schlumberger management has kept it simplified just for purposes of this given report. The complications connected with such a supply chain, which cannot be tackled through a current management and regulation practices. There are factors that have been highlighted which need serious attention to be able to achieve an effective Supply Chain, which leads to profitability. An example includes the urgency of having a single management to allow the physical endorsements harmonization within Supply Chain across different regions and functionality reducing the complexities that dwell on distinct operating cultures. This integrated and coordinated Supply Chain Management would be able to tackle worldwide operations. The system would aid in reducing the overall cost of operations thus maximizing profits. The chapter that follows dwells on the theory of Supply Chain Management (Forrester & J.W., Industrial Dynamics, 1958).

Supply Chain Management Scrutiny

There appears to be little agreement on the meaning of Supply Chain Management. Forrester & J.W (1961) detail in their research that Supply Chain Management has been feebly described and there is an extent of inconsistency in individuals thoughts about what Supply Chain Management actually means. However, Mentzer, et al., (2001) tried to trounce this matter by describing Supply Chain Management in a broad perspective which is not restricted to a single field or authority. We would utilize this description for the objective of this report since it closely advocates for the ideologies of Supply Chain in Schlumberger (Mentzer, et al., 2001).

In schlumberger, they define Supply chain management as a universal, strategic coordination of the usual business purposes and the procedures across these business activities within a specific corporation and across industries within the Supply Chain, with the objective of civilizing the long-term presentation of the individual companies and the Supply Chain management as a whole (Chima, 2007).

According to this definition, it is clear that the focus is not on simply reducing cost or lowering inventories but rather on captivating a systems advance to Supply Chain Management as explained by (Simchi-Levi, David., & Philip., 2004). They dispute that efficient and effective integration between distinct elements of a Supply Chain such as manufacturers, suppliers, stores, and warehouses is very essential. The major challenge is the harmonization of activities across the Supply Chain management so that the association can increase performance, which will be significant in reducing cost and raising the service level. In addition, it will enable the oil corporation lessen the effect of the bullwhip impact that mainly deals with demand amplification and make better use of the available resources thus enabling efficient and effective response to market changes (Ho & D.C.K., 2002).

The multifaceted environment of the oilfield supply chain and the modern business surroundings entails high levels of indecision and complication regarding the methods to be used and balance of performance should be taken into consideration in regulating and administering such global Supply Chains. Whether, it is inventory administering or a drop in lead times across the distinct role of the Supply Chain. Regulation plays a significant role in the implementation plan or system since scheduling and operational regulations remain important responsibilities of the administration, but for Supply Chain Management, it is basic and is a key activity of the administration body (Boddy & D., 2008).

This paper looks at which type of regulation is suitable for this application. Rollinson & D., (2005) makes the dissimilarity between choice of regulation mechanisms through input and output regulations. This is mainly where production regulations revolve around the usual sculpts of administration because of performance. This is due to the specific desired results, assigning individual staff accountability for accomplishing specified tasks and observing staff achievements. Besides, production regulations concerns utilizing the managerial culture based on universal values and beliefs such as novelty like in Schlumberger. However, the regulation mechanism being utilized is dependent on certain subjects such as highly expert workers or just day-to-day operators. It is although difficult to relate a certain type of regulation mechanism when it trickles down to administering international value Supply Chains similar to Schlumberger’s since in some cases production regulations would work better if it is aimed at achieving the universal objective thus improving the overall effectiveness and efficiency of the Supply Chain management. Whereas, production regulations would be more effective and efficient in the physical administration of industrial obligations such as inventories and financial assets (Rollinson & D., 2005).

The production regulations will limit the misuse of these resources revolving around value Supply Chains. In knowledge-intensive corporations, production regulations are challenging but attractive thus requires a complex balance of formal production regulations and input regulations keeping in mind the staff requirements of knowledge intensive (Lowendahl & B., 1997). As denoted earlier this report emphasizes on the physical connection to the regulation of directorial resources, and the solution lies in developing an integrated Supply Chain Management system based on the structure approach where regulation, strategizing and administering is an essential dimension of accomplishing directorial objectives through improved coordination of resources within the Supply Chain. The Supply Chain Management arrangement, which satisfies the solution above, would need a high extent of innovation, which creates the usual administrative practices such as reutilization, standardization, and supervision challenging to apply (Lowendahl & B., 1997). Especially during handling knowledge intensive workers playing individual roles in such a sophisticated Supply Chain (Firms, 2004).

Schlumberger Supply Chain Management System (Solution Approach)

As mentioned above the solution to the difficulties faced by Schlumberger Corporation today in administering its global supply chain is in incorporating all the Supply Chain functionalities in one structure under the umbrella of administration and regulation. The accomplishment of this administration system is based on the role of administration, people, and processes (Rollinson & D., 2005). This begs the question of what is a management system. It is a well prepared, incorporated and sufficiently recognized process, in the form of procedures and standards that explains how a corporation or function will accomplish its objectives. However, it is not absolutely an ICT based system, since it is an approach that dwells on inputs and has space for the administration through constant contact with the people participating in the supply chain. This administration system does not emerge from the blues but it is derived from the Schlumberger Supply Chain Management System. This system deals with health, quality, safety, and environment. Despite the name this administrative approach is not a pure ICT application. it will be the structure of procedures and processes used to ascertain that the Supply Chain organization can execute all tasks required to accomplish the objective by providing the users with current resources which will smooth the progress of the everyday work plus have the suitable regulations for effective administration (Simchi-Levi, David., & Philip., 2004).

Table (a) - Schlumberger administrative System

This figure highlights the eight inter-connected elements of the administrative system. All the Supply Chain administrative system approaches, practices, and documents are incorporated in one of the eight inter-connected elements of this system. The organized structure of the administrative approach will facilitate all the existing Supply Chain procedures, guidelines, practices, and standards to be organized in a single consistent structure. It will endorse harmonization across the distinct functions and areas. This will be civilizing the utilization of information by banking upon obtainable facts and giving decisive considerations for planned regulation, level of uncertainty and risk in the international Supply Chain. This approach will guarantee participation and involvement from the lower level individuals in the Supply Chain organization as well, thus promoting responsibility in terms of inventory administration leading to efficient and effective cost regulation (Simchi-Levi, David., & Philip., 2004).

Merits of Supply Chain Management approach

We can anticipate numerous gains to flow from this management approach (Lowendahl & B., 1997):

vMeets the need for a common structure within Schlumberger SC

vIt will lead to better regulation and effective administration across the whole Supply Chain thus boosting performance.

vThere is improved efficiency of Supply Chain by documenting how processes, procedures, practices must be finished, and all staff members will become more efficient and proficient.

vThrough this module, situational expertise in Supply Chain Management will establish more authority than formal position as (Lowendahl & B., 1997) argues that expertise is multi-dimensional and not connected to seniority and directorial experience, in this way operational power may not be linked to hierarchical position, contrary to the usual directorial practices.

With the aid of this approach, the performance of the Supply Chain can be measured which will give incentives for civilizing the Supply Chain, thus getting rid of dependency on individual decision making and guaranteeing participation from all stages within the Supply Chain.

1.The distinct Supply Chain components like manufacturers, suppliers, stores, and warehouses should be integrated in a single approach, which makes Supply Chain administration more efficient and effective.

2.The Supply Chain business in Schlumberger should be approached in a more systematic manner based on documented and integrated processes.

3.The team concerned with the operational side on handling the Supply Chain should be highly skilled in Supply Chain administration function based on situational experience contrary to the corporations hierarchy positions.

4.The managers managing the Supply Chain operations should be accountable and committed and should not rely just on standards and procedures, which can be accomplished by closely working together with the Supply Chain operational team.

5.The future management approach should attempt to not only administer the issues associated with the physical administration of the resources and products but also address the input of information supervision of highly skilled intellects in the Supply Chain function.

In conclusion, this paper dwells on the Supply Chain Management system of one of the biggest oil corporations in the world (schlumberger). It examines the supply chain in detail and some of the challenges encountered in the corporation as it is spread all over across different regions across the world. It emphasizes on the need of having a well coordinated and integrated Supply Chain thus ensuring timely delivery of products to the customer. I have given various proposals as recommendations, which are as per the schlumberger corporation since it has been effective after the transitional implementation. This will improve regulation and administration of the practices across the whole Supply Chain.

Lowendahl, & B. (1997). Strategic Management in Professional Service Firms. Copenhagen: Copenhagen Business School Press.