Helping Oil & Gas industry respond and prepare for “new normal” during COVID-19
We are currently in midst of a global pandemic and societies across the globe are learning how to most effectively deal with it – saving lives as well as livelihoods. Every industry is affected; however, the Oil and Gas industry in particular, is facing a severely challenging business environment. There is unprecedented sudden decline in demand due to coronavirus and the resultant fight for market share and drop in oil price. In addition to this, Government regulations and preference for lower carbon footprint operations is changing the energy landscape and forcing Decarbonization. Thankfully very recent developments related to lifting of restrictions have started to indicate some positive trends. In the US, the institute of supply managers released their PMI data for May 2020. It was 43.1 indicating a coming out of contraction and into expansion for the broader economy. Similar PMI data was reported for May in China as well. And when we look at fuels, experts are predicting a fast catch-up to normal demand for gasoline while jet fuels may still take some time to be back to normalcy. In the interim, based on what we hear from our O&G clients, managing storage capacities and enabling remote business processes remains key priority.
The immediate need for companies is to quickly adapt to a profitable level of business activity that they can safely operate and then make the necessary supply chain adjustments to cope with it. In the short-term they need to ensure safety from their employees, enable remote working wherever feasible and help getting safely back to work in others. And then in the medium-term they need to adapt to the emerging “new normal” while ensuring financial sustainability and a more digitally connected enterprise (across plants and corporate functions). The illustration below summarizes areas needing immediate priority and how SAP can help with fast implementable solutions. SAP’s ecosystem partners are offering complementary fast implementation service packages that ensures fast time-to-value and ROI.
The first priority is to keep workforce safe, whether it is at the plants, offices or homes.
- Keep Workforce Safe
SAP EHS Management (Environment Health and Safety Management) and SAP Fieldglass can help enable the tracking and monitoring of workers (internal and external) health, industrial hygiene, safety, security and compliance. It can re-qualify resources based on additional HSE parameters and manage risks and assignments. You may like to watch a demo of this and refer to Marius’s perspective on this as well.
In addition Remote Work Pulse free service, helps better understand employees’ need for support in the current situation (Link to service details).
SAP SuccessFactors enables end to end hire to retire processes including core HR & payroll processes, talent management, HR Analytics/Workforce planning and Employee Experience Management together with SAP Qualtrics. Refer to this perspective on how learning and up-skilling can be accelerated in the current context.
SAP Digital Boardroom gives organization wide visibility for responding to dynamic situations with simulations and what-if analysis.
SAP Multiresource Scheduling helps in workforce/resources assignments, capacity and demand planning by shifting demands at work center level to slots with available capacity and react dynamically as demands change. It can integrate with employees’ mobile devices for task tracking.
- Enable Remote Work
SAP Signature Management by DocuSign enables remote e-signature for erstwhile “paper based” processes ensuring business continuity.
SAP Invoice Management (Opentext) eliminates the words “time-consuming” and “labor-intensive” from your invoice management vocabulary through digitization/automation.
SAP Litmos helps train workforce from HSE topics to newly assigned tasks.
SAP Process Mining by Celonis ensures that key business processes are running at maximum efficiency and conforming to their intended design by assessing process execution with data-based process discovery.
Access Governance streamlines the process of managing and validating user access with governance software that automates user provisioning and helps you certify access. Learn how to secure operations during increased disruption with this perspective from Vishal Verma.
SAP is offering a free Remote Readiness & Effectivity Academy for employees working remotely
- Enable Adaptive Processing
SAP Supply Chain Planning solutions enable improved planning scenarios for risk mitigation strategies. It enables dynamic demand forecasting, real time view of demand to plan the optimal response (production, transfer) helps to prevent excess inventory and lower working capital.
SAP Supply Chain Logistics solutions provide much needed logistics flexibility and collaboration in rapidly dynamic conditions. It also enables spare parts rationalization.
- Agile Supply Chain
SAP Solutions for Hydrocarbon Logistics helps bring real time visibility and control into the hydrocarbon supply chain (from primary to secondary distribution to retaining) and be responsive to changing conditions. SAP Commodity Management provides advanced risk management capabilities (hedging price exposure with derivatives) in order to mitigate the impact of fluctuating market conditions.
SAP Manufacturing Integration and Intelligence integrates to plant systems/sensor data automating issue detection, seamless manufacturing operations and can help optimize energy consumption.
- Ensure Upstream Profitability
SAP Upstream Operations Management enables deeper insights into wells’ performance and profitability thereby allowing to be more responsive to changing market price for products. For example, low commodity prices may lead to more focus on cash flow vs. throughput. It achieves this with a unique data model, linking production, maintenance, revenue and cash flow through a single definition of the well and well completion.
SAP Profitability and Performance Management improves bottom line by empowering finance and business teams with actionable insights from sophisticated models such as profitability and cost allocations, driver-based planning, shared-services costing, cash-flow modeling, and funds- and liquidity-transfer pricing.
You may like to refer to SAP Helps React whitepaper for more information and also about other industry verticals.