Welcome to the second edition of the UKCS Upstream Supply Chain
Collaboration Survey Report, in partnership with Oil and Gas
Supply chain collaboration can be a powerful tool to manage
costs, improve efficiency and achieve a variety of strategic aims.
Our report looks at how behaviors towards supply chain
collaboration have changed in the tough operating environment since
2015 and investigates how operators and suppliers work together
more effectively, to build a long-term future in the UKCS.
A step in the right direction
The results show some welcome improvements compared with the
first edition a year ago: participants appear to collaborate more,
their relationships with their suppliers or customers seem to have
improved and nearly everyone considers collaboration crucial to
doing business in the future.
Is a willingness to change enough?
Clearly, there has been a positive change in the industry since
last year. But, despite the radically different operating
environment a year ago, when oil prices were expected to be above
$60 per barrel by now, has the industry really made a
Despite more talk and awareness of supply chain collaboration in
the industry, company behaviours towards collaboration hardly seem
to have changed in the past year. While the main reason to
collaborate is cost reduction, half of respondents do not believe
that the majority of their collaborative efforts were successful.
Collaboration still mainly happens where trusted relationships
But with no oil price recovery in sight, cost pressures will
still remain. Therefore there is an urgent need now for companies
to take more radical steps to change the way they collaborate to
ensure the sustainability and longevity of their business.
How can we learn from the Netherlands?
Dutch operators primarily collaborate to optimise skills and
capabilities, and they are also more willing to learn from
suppliers than UK operators. Reducing cost and sharing risks with
suppliers are not seen as the main drivers of collaboration in the
While there is no perfect way of doing business, and
collaboration is merely a tool to achieve objectives. It works for
some but not for others. Dutch businesses are more efficient, costs
are lower and collaboration scores are higher. There could be a
strong correlation between these three factors.
The framework for radical change
But how can businesses make the radical changes required? For
more explanation view our short video:
Our Framework contains four components which are essential to
creating effective, impactful and successful collaboration in the
improvement needs strong leadership support to challenge existing
structures, processes and the status quo
has to be focused and purposeful. Pick a small number of projects
that can have a disproportionate effect on your business
Alignment: Your and
your partner's business operations, process and systems need to
be aligned to create structures around the goal and sustain
specific KPIs and measure the results, then feedback, improve and
The UKCS Upstream Supply Chain Collaboration Survey was
conducted in Partnership with OIL & GAS UK
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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