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Industries Downstream oil and gas
C&G Industries Oiland Gas

Oiland Gas

The downstream petroleum industry today is limited in its ability to grow market share and revenue and ensure profitability. After years of cost reductions, the industry has been left with thin margins that limit capital spending. Decisions regarding inventory are complicated by storage constraints, a lack of working capital and high risk. There is an ongoing worldwide uncertainty about the availability of product and price fluctuations. On this background, downstream petroleum companies need to make fast, well-informed supply decisions.

Within this complexity petroleum companies face major supply chain challenges. There is a need to:
  • Ensure flexibility to meet changing business needs
  • Minimize inventory working capital and exposure to price change, while maintaining product availability to end customers and meeting regulatory limitations
  • Increase cost reduction and efficiency without disrupting operations
  • Integrate subsidiaries' supply chains to maximize synergy
  • Quantify impact on the supply chain of network and other changes
  • Define the correct ratio between in-house and outsourced activities, based on cost and risk analysis

C&G, with proven expertise in petroleum supply chain consulting, provides industry-focused solutions that:
  • Quantify the synergies and added value when new elements are integrated to the network (sites or terminals) or product variety is changed
  • Define the optimal ratio between direct distribution from the refinery and the use of terminals
  • Optimize primary distribution transportation type (train, barge, pipe or trucks), size and single vs. multi product transportation
  • Provide the optimal terminal locations or choose the terminal for the available network
  • Propose clusters for secondary distribution based on network needs and limitations, and required resources
  • Create pricing strategy per cluster based on volume, average trip distance, load size, number of stops.
  • Implementing distribution planning dedicated process and tools for retail and commercial uses.
  • Implementing inventory push strategy.
  • Formulate delivery routine per retail site based on tank capacities, demand and site credit terms.
  • Ensure tank and pump optimization within retail sites, including needed changes, investments and ROIs.
In addition C&G has developed unique tailored tools for thegas and oil industry supply chain:
  • Strategic Network Optimization Model (SNO) a management tool for decision-making that highlights optimal supply chain structure and related costs, establishes the impact on the overall supply chain cost, runs alternative scenarios and compares the outcome
  • An Inventory Management tool that is based on demand, primary distribution lead time, safety stock, inventory cost and CSO.
Read more: Reducing the Losses of Fuel Distribution- At a Global Fuel Company
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