CASE STUDY

How Did a Major Oil and Gas Organization Transform its Supplier Selection Process with Advanced Manufacturing Analytics? 

Aug 23, 2022

Highlights of the Case Study: 

Particulars Description 
Client A Canadian oil and gas company partnered with Quantzig to focus on selecting suppliers by creating a comprehensive multi-criteria decision analysis (MCDA) method. 
Business Challenge The client wanted to use advanced analytics to evaluate supplier risk to understand future and present risks and enable the business to anticipate changes in the external environment.  
Impact Quantzig offered a solution that led to optimal selection and ranking of suppliers, reducing the cost and time in the selection process. This had a direct and positive impact on business growth and financials. 

Game-Changing Solutions for the Oil and Gas Industry 

The objective of supplier selection solutions is to identify suppliers with the highest potential for meeting the company’s needs. The selection involves a comparison of multiple parameters varying for each company or organization. However, there are certain standard assurances made by each supplier, such as the promised supply of raw materials, products, commodities, etc., adherence to quality expectations, and satisfactory production and business needs at reasonable costs with prompt deliveries. Evaluating suppliers on all these parameters is essential for an organization’s growth and financial viability.  

Quantzig’s advanced manufacturing analytics and supply chain analytic solutions enable companies to select high-quality and superior suppliers that can supply cost-effective services and equipment, comply with specified requirements, and do not risk the production or delivery schedules.   

advanced manufacturing analytics

The Challenges of the Manufacturing Client 

A Canadian oil and gas company partnered with Quantzig to focus on selecting suppliers by creating a comprehensive method for multi-criteria decision analysis (MCDA) based on alternate techniques capable of evaluating various aspects of supplier selection. The client approached Quantzig for this comprehensive approach, which included steps for choosing critical success factors (CSFs), rating providers, and establishing partial weighing options.  

  

The client wanted to leverage our advanced manufacturing analytics solutions and supply chain analytics solution to provide insights on supplier performance evaluation. The client further intended to analyze supplier risk to understand future and present risks and enable the business to anticipate changes in the external environment. Below is a list of issues that the client wanted to resolve with the help of our intervention:   

  • Lack of flow and visibility into the supply chain  
  • Massive amount of data to process and interpret  
  • Retain and onboard talent in the workforce   
  • Assess the changing oil & gas demand and consumer preference  
  • Inability to eliminate unnecessary delays  

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Analytics Solutions for the Oil & Gas Industry 

The supply chain and advanced manufacturing analytics solutions offered by Quantzig implemented the multi-criteria decision-making (MCDM) technique to assess high-value suppliers for the oil and gas industry. Quantzig’s solution used the client’s internal data to develop a list of the best suppliers suited for the client’s vertical, regional, and application focus. The solution also helped monitor the supplier’s performance and avoid delays. The client was able to get in-depth information on operational parameters related to performance areas and their correlation with costs to develop strategies for process improvement.  We enabled the adoption of a few supplier evaluation methods commonly used in the oil and gas industry. This helped streamline the process for our client, which could then be replicated across all the client’s businesses. Some of the critical areas for supplier evaluation implemented are as follows:  

  • Weighted-Point Method  
  • Categorical Method  
  • Cost Ratio Method  
  • Dimensional Analysis Method  
  • Analytical Hierarchy Process (AHP)  

Impact Analysis of Quantzig’s Supplier Selection Solutions  

Enhancing the client’s supplier selection process directly impacts the optimization and immunization of the production cycle. It helped further improve the refining and distribution of petroleum and gas products. The traditional supplier selection methods could evaluate only a few set parameters laid out by the decision maker and hence were very subjective and could lead to an inaccurate assessment, which would have far-reaching consequences on business growth.   

Quantzig’s solution enabled a data-backed evaluation over several curated parameters, leading to optimal selection and ranking of suppliers. In addition to reducing the cost and time in the selection process, it also helped prevent human error, which could negatively impact the company’s bottom line. Our solutions had the following impact on our client’s business:  

  • Reduced operating costs  
  • Improved production process  
  • Minimized delays   

Key Outcomes of Advanced Manufacturing Analytics: 

Quantzig’s data analytics solution helped evaluate prospective suppliers over a wide range of parameters to arrive at the most suitable supplier. It enabled the company to implement a supplier benchmarking strategy to enhance supplier relationship management. Using data-backed assessments and management systems led to increased efficiency and improved visibility into the supply chain, which translated into better performance and higher profit margins.   

A Broad Perspective on the role of Supplier Selection in the Oil and Gas Sector: 

Oil and gas companies depend significantly on suppliers to deliver complicated services and essential machinery to support ongoing projects and operations. Therefore, subpar contracts and poor supplier relationship management can magnify the risks for oil and gas firms. Oil and gas companies need to assess the dependability and performance of numerous suppliers across a range of spend categories and pursue continual communication to ensure that suppliers adhere to their safety, training, equipment, and personnel standards. 

Supply chain market intelligence assists in choosing the best suppliers, setting the right price to pay, and ensuring a competitive advantage. Oil and gas companies that implement effective supplier selection processes can anticipate and resolve critical supply chain concerns such as infrastructure constraints, fluctuating markets, and capacity constraints. 

Key Takeaways 

Quantzig’s Supplier Selection Solutions enabled the following benefits for the oil and gas company: 

  • Enabled optimal selection and ranking of suppliers 
  • Reduced the time and cost involved in selecting a supplier 
  • Increased efficiency and ensured better supplier management 
  • Helped meet production and delivery targets 
  • Overall positive impact on the company bottom line 

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