Decision year

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DHL study: Energy companies must cooperate more The energy industry is currently undergoing one of the largest changes in recent history. Historically low prices for crude oil and natural gas, the shale gas revolution in the United States and the worldwide increase of renewable energy in electricity generation present major challenges, in particular for oil and gas companies. A current DHL study examined how companies can adapt to the difficult market environment. The study identified an improvement of transparency and the optimization of the supply chain as important starting points. “Even if the industry sees itself confronted with enormous challenges, companies are faced with a multiplicity of opportunities in the areas of conventional as well as renewable energies. As our survey has revealed, there is still plenty of room for improvement, particularly in terms of efficient, well-organized supply chains”, explains Steve Harley, head of the energy sector at DHL Customer Solutions & Innovation. “The supply chains of conventional and renewable energies are increasingly converging with regard to project size, production areas and service providers. This provides the opportunity of learning from each other and sharing expertise.“

Cooperation providing win-win effects

40 percent of logistics managers in oil and gas companies deem the transparency of the supply chains within their own company to be insufficient. The authors of the study recommend that logistics are coordinated centrally. A precondition for this is that supply chains around the world are tracked and monitored. As a result, operating costs could be reduced and material management improved, for example through the central storage of stocks. Cooperation within the industry – through the shared use of facilities or the active transfer of knowledge – could also generate win-win effects. The authors of the study specify the mining of oil shale in the United States as a positive example. Productivity has increased by more than 30 percent since 2007 due to the standardization of processes. However, the reality is usually different in many companies in the industry, as the study also shows. Although 73 percent of decision makers in the industry feel that more openness is important, only 13 percent are in favour of greater cooperation with competitors. “Particularly when it comes to the supply chains, 2016 will be decisive for the success or failure of the energy sector. If one looks at the market development of oil or gas companies, there is now hardly any scope for operational inefficiencies. Lack of transparency with regards to stocks or the use of resources, as well as decentralised control systems, must be a thing of the past – especially in the extraction of energy raw materials, where the margins are currently extremely tight or de facto non-existent”, explains Steve Harley.