In this ‘Amazon-age’ of delivery, online marketplace shopping is more popular than ever. You can browse, order and expect next-day delivery for any product from pet supplies to jewelry to automobiles. The oil and gas industry (typically behind the curve in new technology, innovation and process adaptation) was an early adopter to eCommerce. As early as the 2000’s, Halliburton started exploring eCommerce platforms for direct sale of downhole tools and equipment. Today Baker Hughes and Schlumberger are present online among other players in the oil and gas procurement space.
ECommerce is especially well-suited and beneficial to the oil and gas industry for each stage of the energy supply chain. Majors, National Oil Companies, mid-size and smaller independents, as well as service companies, vendors and logistics companies can all benefit from this emerging business model.
This is especially true for small to mid-size service companies and start-ups who may not have the supply chain or warehouse capability to maintain an adequate stock of key products and tools. Online marketplaces help solve this dilemma in many ways.
Decrease inventory carrying costs
Companies that embrace eCommerce portals and global marketplaces do not have to allocate budget building warehouse facilities, leasing space or adding headcount to stock slow moving tools and products. A company can focus on maintaining inventory for short-term items used on a regular basis, perhaps passing on cost savings and service efficiencies to their customers.
Faster buying for customers
ECommerce brings more efficiency to the oil and gas procurement process by enabling just-in-time delivery to when and where the item is needed. Delivery can go straight to the local service center or even to the actual job site, removing brokering through third parties, and increasing costs. Logistics and shipping are handled by the online company and included with the overall cost. You can track your order delivery status every step of the way once it leaves the warehouse.
Better planning, forecasting and budgeting
Online buying can potentially result in less product to store. Oil and gas procurement teams can negotiate with vendors to create specific stocking arrangements and consignment agreements so items are available when and where they are needed for upcoming work. The timeline for upcoming projects can be updated easily to reflect inventory needs and help determine when to order, stock and ship, keeping the balance sheet balanced.
Compress the energy supply chain
Optimizing your procurement and supply chain processes can bring tremendous cost savings to your company. ECommerce helps avoid intermediaries and provides access to cost-effective opportunities on services, new items, unused stock or reconditioned items. An online marketplace can minimize the number of purchase orders and invoices by mixing brands and products within the same order.
Better buying experience
Many sites allow you to refine your search criteria to find the product that best fits your research and needs. Online ratings and reviews of the different marketplaces and individual products can indicate security and customer satisfaction of previous buyers. Plus, you can shop anytime from anywhere without having to rely on conventional brick-and-mortar store hours.
Online commerce has the added benefit of helping smaller, local and new technology providers increase visibility and sales. These companies can now introduce products and tools to a global audience in countries and markets where it would be impossible to have a physical presence.
In conclusion, eCommerce multiplies the capability of your oil and gas procurement and energy supply chain functions to levels that were not possible just a few years ago. If your company has not adapted online commerce, it is well worth the time to check the capabilities of an online site and complete an online transaction to see how it works. As many consumers have adopted Amazon and other global portals for their day to day buying, B2B eCommerce promises to be just as big a game changer.
Run In All is a marketplace purpose-built for the oil and gas industry. This 2.0 digital procurement and supply chain platform is designed to streamline your processes. Our vast product selection and intuitive processes make it is simple for operators to find the right products to support their operations, and for suppliers to extend their reach to a global audience. All transactions are performed on a secure, efficient, and collaborative platform built to help your business succeed.
ECommerce is especially well-suited and beneficial to the oil and gas industry for each stage of the energy supply chain.
For new oil and gas suppliers, B2B eCommerce platforms can help reach initial customers and grow beyond a local base.
Online purchases for business currently lag those of consumers, but market data indicates buying preferences are evolving.
