LONDON–(BUSINESS WIRE)–SpendEdge, a leading provider of procurement market intelligence solutions, has announced the completion of their latest article on the sourcing and procurement challenges in the oil and gas industry.
Despite being considered as an engine for development in most economies, the oil and gas industry operates in highly complex environments. They constantly face challenges in terms of supply and demand. Companies need to look beyond short-term tactics and take a more proactive and strategic stance to gain value from sourcing and procurement processes. They will have to evaluate the supply chain, sourcing, and procurement techniques as the industry faces the likelihood of a long-term low-price environment.
At SpendEdge, we understand that improving the sourcing and procurement process is an arduous task. Therefore, we have compiled a list of sourcing and procurement challenges in the oil and gas industry.
Sourcing and Procurement Challenges in the Oil and Gas Industry
Locally sourced supplies
Most companies award various contracts to local companies (i.e. tool and dye operations, pipefitters, etc.) due to government regulations or remote locations. Such contracts act as a lucrative option for local companies. This increases the risk of bribery, fraud, corruption, and other abuses.
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Single-supplier sourcing and procurement
Companies in the oil and gas industry tend to pursue sourcing and procurement with sole suppliers. This also happens due to the specialties and expertise offered by a few companies. This could lead to undisclosed conflicts of interest and result in financial losses, thereby impacting the quality of goods and services provided. To know how you can avoid such financial risks, get in touch with our experts now!
Often companies employ third-party companies specializing in sourcing and procurement to work on their behalf. These firms are susceptible to improper practices. They aren’t connected to corporate systems and electronic controls especially in remote locations making it difficult for companies to monitor the activities. This could pave the way for unprecedented challenges and risks.
To know in detail sourcing and procurement challenges in the oil and gas industry, read the complete article here!
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