Today’s landscape for companies working in the oil and gas sphere is mired with project complexity, rising costs, exposed risk and escalating pressure on profitability, which have combined to focus the spotlight firmly on operational inefficiencies.
In order to succeed in these tough times, companies must effectively manage this rising complexity, while at the same time increasing their efficiency and reducing costs. Many companies have turned to global sourcing to achieve these objectives. Global sourcing, which comprises domestic and offshore sourcing, can be an extremely effective means to achieve strategic operational gains and cost savings.
In order to succeed in these tough times, companies must effectively manage this rising complexity, while at the same time increasing their efficiency and reducing costs. Many companies have turned to global sourcing to achieve these objectives. Global sourcing, which comprises domestic and offshore sourcing, can be an extremely effective means to achieve strategic operational gains and cost savings.
The whole point of global sourcing is to exploit global efficiencies in the delivery of a product or service. The top four drivers for global sourcing are: cost savings, access to qualified personnel, enhanced efficiency through business process re-design and competitive pressures.
That said, the potential rewards often go hand-in-hand with the risks and challenges stemming from inadequate controls around current processes, and the difficulty of harnessing multiple systems, to name just a few of the challenges. Faced with these realities, some companies have deferred their global sourcing implementation efforts, only to see more proactive peers move forwards and achieve efficiencies and reduce their cost structures to gain a competitive edge.
Indeed, companies that have not yet implemented global sourcing as part of their procurement strategy can quickly find themselves at a competitive disadvantage, from both a financial and strategic perspective.
Such companies can no longer afford to delay, not with the significant opportunities that global sourcing can deliver.
Companies should now be assessing their operations to determine which processes and products are best fitted to global sourcing. Then, they can look ahead to the future.
The maturity of the available global sourcing solutions has advanced at a very rapid rate in recent years. And furthermore, as many countries around the world continue to make large-scale investments in the development of resources to support global sourcing, these capabilities are likely to become even more mature over the coming years.
Globalization and increased connectivity have enabled new ways of doing business. The pioneering companies in this field have already been enjoying the benefits of sourcing low end products and are now moving forwards to migrating higher end products. They approach it with a strategic objective in mind, treating it as the integration and coordination of procurement requirements across worldwide business units, looking at common items, processes, technologies and suppliers. With proper planning and implementation, a global sourcing strategy can yield a rewarding income stream and provide a company with significant competitive advantages. However, it also requires a comprehensive internal assessment as to whether your company is actually ready to adopt such practices or not.
To sum up, companies that leverage an alternative operating model and global capabilities can be much more focused on value-added activities, and are often much more nimble than their peers, thus positioning themselves to achieve a greater return on their assets.
That said, the potential rewards often go hand-in-hand with the risks and challenges stemming from inadequate controls around current processes, and the difficulty of harnessing multiple systems, to name just a few of the challenges. Faced with these realities, some companies have deferred their global sourcing implementation efforts, only to see more proactive peers move forwards and achieve efficiencies and reduce their cost structures to gain a competitive edge.
Indeed, companies that have not yet implemented global sourcing as part of their procurement strategy can quickly find themselves at a competitive disadvantage, from both a financial and strategic perspective.
Such companies can no longer afford to delay, not with the significant opportunities that global sourcing can deliver.
Companies should now be assessing their operations to determine which processes and products are best fitted to global sourcing. Then, they can look ahead to the future.
The maturity of the available global sourcing solutions has advanced at a very rapid rate in recent years. And furthermore, as many countries around the world continue to make large-scale investments in the development of resources to support global sourcing, these capabilities are likely to become even more mature over the coming years.
Globalization and increased connectivity have enabled new ways of doing business. The pioneering companies in this field have already been enjoying the benefits of sourcing low end products and are now moving forwards to migrating higher end products. They approach it with a strategic objective in mind, treating it as the integration and coordination of procurement requirements across worldwide business units, looking at common items, processes, technologies and suppliers. With proper planning and implementation, a global sourcing strategy can yield a rewarding income stream and provide a company with significant competitive advantages. However, it also requires a comprehensive internal assessment as to whether your company is actually ready to adopt such practices or not.
To sum up, companies that leverage an alternative operating model and global capabilities can be much more focused on value-added activities, and are often much more nimble than their peers, thus positioning themselves to achieve a greater return on their assets.
