Stay Ahead Of Disruption With Connected Hydrocarbon Logistics

Jean-Marc Delbos

In the midst of digital economy transformation, disruptions will continue to cause problems for hydrocarbon refiners that do not adapt. How can you build your digital energy network for both upstream and downstream operations? How can you combine compliance and visibility within your system? How do you optimize your company’s logistical needs to create a flexible enterprise?

These are common questions, as avoiding disruption requires an agile business. Here is an example of how to bring such changes to your own company.

The Internet of Things (IoT) has become a reality. Our customers demand connectivity and real-time information. The explosion of data available for analysis is creating new and unprecedented partnerships between oil & gas and the IT industry.  How do you keep your business functioning through disruption?

You need to build a strong digital energy network. You need to connect all stages of your hydrocarbon logistics. You need to have vision in how these pieces will work together. Let’s take a look at how three different companies envision handling their hydrocarbon logistics.

Tried and failing

Some number of refining companies have survived for decades. Through the boom and bust cycles that are common in oil and gas, they’ve found a way to get through. Because of this history, the company executives think they know how to adapt to disruptions. The problem is that digital disruption is much different than the average market shift.

This type of company doesn’t want to invest in technology that isn’t completely adopted by the industry, believing that it’s risky. Because they’ve seen risks fail in the past, they avoid tech upgrades and they don’t create a digital energy network. Their company’s logistics remain slow to respond and they unable to take advantage of market conditions. They miss signals that there’s a change in demand, and they can’t respond to issues in a timely manner. The company is left behind—another casualty of the transformed industry.

Tried and found wanting

This is a company that has successfully navigated a few cycles in the market. Executives know that technology is important,but they don’t know where to invest. They think that making fewer, smarter upgrades to their digital energy network will be sufficient to keep up with the competition. They base their prediction of disruptions on industry experience. This means they’re often going on a gut instinct that may or may not be correct. They have some advantages over a company that doesn’t adopt technology to deal with the digital economy. Unfortunately, their workflow is often cumbersome and less flexible than that of many other companies.

They may have a system that comes up with remedies to disruptions in their supply chain. Unfortunately, it doesn’t tell them which disruptions will have the most business impact. Product planners and schedulers need significant experience to understand the data and statistics presented. They may not understand how the current context affects the disruption. Operators need to identify which resources should be used. Activities may be tracked and confirmed, but the process requires input into a central system to continue the workflow. The delays in the workflow can prevent fast response to issues that may pop up in daily business.

Connected, innovative, and flexible

Does your company use sensors, mobile technology, and cloud computing to create a comprehensive digital energy network? If it does, you’re ahead of the game. A company that adopts technology to create a comprehensive network of sensors, analytics, and collaboration has a flexible operation.

This means they can quickly react to changes in the market. They can automate their workflow for fast response to most situations. The system requires human involvement only in specific situations. Product planners and schedulers are able to study visualizations of the disruption using GIS and real-time data. They can run models and simulations to decide which system-generated solution will work best in the current context. This allows them to effectively respond to the disruption within their operating constraints.

In the meantime, the needed resources are automatically identified in the business’s network by the system. Activities are tracked and confirmed automatically, keeping the workflow running smoothly.

This company is able to respond quickly to changes. It’s an agile, flexible business that can take advantage of industry shifts. It has an adaptive, automated work flow that provides instant access to data, modeling, scheduling, dispatch, and other logistics operations. By eliminating much of the human interaction, the employees can focus on improving the business overall.

Are you creating a hyperconnected digital energy network? If you are, your business is ready to predict and avoid disruptions. You’ll also see benefits such as higher sales margins, reduced inventory, reduced capital expenses and safer operations. If your company isn’t flexible to changes, it will fall behind.

Do you need to create further connectivity in your digital energy network? If so, you may find some of SAP’s oil & gas products helpful. Our services provide exceptional connectivity and real-time data analysis that help you adapt to changing conditions.

To learn more about digital transformation in the oil and gas industry, click here.

Jean-Marc Delbos

About Jean-Marc Delbos

Jean-Marc Delbos is senior director of the Oil and Gas Industry Business Unit at SAP. Based in Paris, France, he is SAP’s global lead for the Hydrocarbon Supply Chain business priority within the Industry Business Unit. He provides overall thought leadership and drives strategy for the Downstream Oil & Gas segment. He also manages the SAP solutions for this segment, in cooperation with the development teams and partners.