Shireen Regal

Shireen Regal leads the Transportation and Distribution portfolio for Adapt IT Energy. She has gained experience and knowledge in the Energy industry, through working with Oil Majors both locally and globally. Shireen experience spans across business & systems analysis, business process & solution design, implementation and optimisation, with a strong focus on project management as well. Shireen also possess profound market leadership and expertise in the Adapt IT Transport and Distribution solution stream.

What is SAP WMS

What is SAP WMS?

Warehouse management is an essential component of the downstream supply chain within the oil and gas industry as it is central to the productivity of your transport and distribution processes. Many businesses have turned to digital technology, in the form of SAP Warehouse Management Systems (WMS) software, to improve productivity and enhance visibility into warehouse processes, layout, labour and stock management. SAP WMS enhances the effectiveness and efficiency of the downstream supply chain and this, in turn, improves the customer experience and profitability.

What is SAP WMS, and why is it important in the downstream supply chain?

In simple terms, SAP WMS keeps products flowing efficiently through the downstream supply chain, which becomes essential in ensuring customer satisfaction and securing an increased profit margin. When warehouse processes are optimised and running as they should, the company can ensure that the supply chain is reliable and that stock shortages, hold-ups etc. are a rare occurrence.

SAP WMS answers to the need for an integrated end-to-end logistics solution. This allows you to seamlessly run your logistics processes, accelerate order fulfilment cycles, enhance flexibility and agility as well as provide you with enhanced visibility across supply chain logistics. The system ensures quality management of inventory in high-volume warehouse operations and allows you to run intralogistics integrated with core sales, manufacturing, and finances, plus transportation and returns. This will enable you to:

  • Achieve faster fulfilment while efficiently optimising resources and mitigating problems
  • Gain real-time insight into operations with stock, resource, and process transparency
  • Connect with a range of devices leveraging a built-in material flow system

This innovative software enhances the efficiency of the downstream supply chain by optimising processes and providing visibility.

Key features of SAP WMS

Key features of SAP WM

Several key features make the SAP WMS software appealing to companies in the oil and gas industry. These include:

Monitoring and planning
 

SAP WMS offers you an overview of all goods issues and warehouse stock, thereby facilitating the planning, monitoring, and optimising of work processes within transport and distribution operations. For example, it gives you a foresighted view of the workload in the coming days or allows you to intervene, in good time, during critical warehouse processes, so that you can execute warehouse movements on time. Through the use of an RF monitor, you get an up-to-date picture of all the activities in the warehouse, which means that you can control the actual work in the warehouse using the RF monitor.

Cross-functional capabilities 

SAP WMS supports cross-functional features like serial numbers, batch management, catch weights, dock appointment scheduling and cross-functional analytics. There are also features that support compliance and traceability. 

Logistical efficiently 

This system supports streamlining e-commerce returns, flexible picking for multiple unique orders in a single run and management of customer-initiated delivery cancellations or changes, which saves on time and enhances efficiency.  

Goods movement 

The software enables you to process all goods movements that affect your warehouse. The inventory management capability includes the monitoring of goods receipts, goods issues, stock transfers, material staging for production, automatic replenishment, managing hazardous materials, storage control and processing stock differences in your warehouse. SAP WMS optimises warehouse capacities and material flows using putaway and stock removal strategies, which you can adjust to suit your business needs, or by using storage units.

Cross-docking functionality 

SAP WMS allows for cross-docking, which enables you to reduce the material handling cost, labour and time. This is done by mapping inbound delivery documents to outbound deliveries in order to minimise material handling and the need for storage in the warehouse.

Benefits of SAP WMS

The implementation of this type of management system has several different benefits for oil and gas businesses with large distribution centres and complex supply chain logistics. These include:

Reduced warehouse costs 

SAP Warehouse Management Systems (WMS) allows you to optimise the layout and space of the warehouse. This will potentially reduce the waste of premium floor space and the time taken to move materials, pick and distribute the product. By considering the best locations to store products and designing the warehouse to fit your unique operating needs, you can lower operating expenses and enhance productivity. 

Increased visibility

This type of software solution will provide you with accurate real-time data relating to inventory levels. This will assist in inventory forecasting and planning to ensure that you can meet customer demands and needs.

Warehouse Automation
 

Warehouse Management Systems (WMS) assist in optimising the material flow through the automation of processes from purchase orders, to picking through to distribution. They can integrate and automate different processes to enhance accuracy and productivity.

Increase in accuracy and productivity 

By optimising warehouse management processes, you can efficiently, and more accurately, find inventory availability and location. This enhances the speed of order fulfilment and reduces any delays due to human error. Increasing productivity and improving customer satisfaction. 

Frequently Asked Questions about SAP WMS

FAQ

SAP WMS has several key features, capabilities and benefits, but there are often a number of questions that oil and gas companies ask in relation to this software solution. These include:

Is SAP WMS a centralised or decentralised software solution?

The SAP WMS can function as both a centralised solution, which is integrated into a centrally operated ERP (Enterprise Resource Planning) system or a decentralised solution, which operates separately from any ERP systems.

Does this software allow for full integration?

You can interface the Warehouse Management System as a stand-alone component with the SAP ERP system or integrate the SAP WMS with your preferred ERP system. In both cases, the ERP system and the Warehouse Management System can run on separate machines.

On-premise and cloud deployment?

SAP WMS can be implemented both as a cloud-based software solution or as an on-premise solution based on your business needs and requirements. 

Can I access support?

There is 24-hour support available to answer all your operational, application and infrastructure support needs relating to the SAP WMS software.

Conclusion

Warehouse management is an essential component of the downstream supply chain. Many businesses have turned to innovative software solutions, like the SAP Warehouse Management System (WMS) to optimise stock management, warehouse layout, order fulfilment, planning and monitoring processes and more. This solution enhances visibility, productivity and overall efficiency of distribution and transport processes, ensuring that your customers receive the correct product on time. 

When looking for a Warehouse Management software solution, turn to a partner with years of experience in the oil and gas industry, like Adapt IT Energy. Adapt IT Energy is a proud SAP partner and can support the implementation of your SAP WMS. Give your business the competitive edge with SAP WMS. 

How Inventory Tracking Software Can Improve Your Downstream Supply Chain

Inventory tracking is an essential component of the downstream supply chain as it tracks and monitors inventory across multiple warehouses and locations. Inventory tracking is no simple task, and if not managed correctly, it can disrupt and negatively impact the transport and distribution processes in your supply chain. Many businesses within the Oil and Gas industry have turned to inventory tracking software to assist in stock management and inventory control to enhance productivity and effectiveness.

What is Inventory Tracking?

Inventory tracking monitors where the inventory resides in the company’s supply chain. This provides you with data on what inventory is available, how much stock there is, where it is located as well as quality. Inventory tracking also allows you to identify any theft or loss of inventory and is just one component of a company’s inventory management system.

Why is it important to manage supply chain inventory levels in an Oil and Gas industry? The answer is simple. With up to date information on inventory tracking, you can accurately plan and fulfil orders more efficiently and effectively. By using inventory tracking information, you can ensure that, where multiple locations are concerned, your trucks are going to the right terminal or depot to pick up the right product and that your customers are receiving what they have ordered when they need it. This reduces stockouts, improves productivity and enhances customer service levels.

Many Oil and Gas companies have turned to inventory tracking software to ensure that the processes and systems related to inventory management are optimised to increase the productivity of the overall downstream supply chain.

Benefits of Inventory Tracking Software

Benefits of Inventory Tracking Software (1)

There are several different benefits to implementing an inventory tracking software as part of your inventory management system. These benefits include:

  • Increased productivity and accuracy – by implementing inventory tracking software, you can reduce error rates and improve inventory accuracy, which will enhance your overall ROI.

  • Effective decision making – through the implementation of this type of software tool, you will gain insight into any stock management problems or issues and proactively fix them before they become more costly to the business. For example, having too much stock of one product and not enough of another.

  • Enhanced visibility – increased transparency into stock levels and the quality of stock available will provide you with the necessary information needed to plan and forecast effectively for demand and supply.

  • Effective quality control – with inventory control and tracking software tools, you are able to locate, track and monitor the quality of stock. This allows you to identify potential problems related to deadstock and stock shrinkage from loss or theft.

Each of these benefits impacts how the distribution and transport of products are managed. Without inventory tracking software, you will be unable to fulfil sales orders because you will not have insight into inventory levels, what inventory is sitting in what location and what stock is available for sale. This will negatively impact the other systems and processes in your downstream supply chain. For example, if a truck is sent to a depot to collect stock and either the stock is not there, or the right amount of stock is not there, then the distribution process is held up, resulting in the customer’s order being delayed. These types of disruptions will impact the customer experience and the overall profitability of the business.

What to consider when looking for Inventory Tracking Software?

What to consider when looking for Inventory Tracking Software_

There are several different benefits to incorporating inventory software into your inventory management system. With so many software options on the market, it is important to look for key features that talk to the needs and requirements of big and small businesses within the Oil and Gas industry. Below are some of the elements to consider when looking for inventory tracking software:

Real-time intelligent information processing 

When choosing a stock management software solution, look for one that offers real-time access to essential inventory related information. This includes information on inventory items, where they are located, how much is available etc. This process often includes using different systems like RFID and barcode scanners to track inventory.

Digital tracking 

Reduces the need for paperwork by implementing a software solution that allows you to manage all information relating to bills of materials, purchase orders, stock levels, locations etc. digitally without using hardcopies/paper. This saves on time, storage space and resources.

Seamless integration 

Look for a software solution that can seamlessly be integrated into your overall inventory management solution. This kind of software solution should combine different work processes in one environment, allowing various departments to use one effective tool.

Scalability and flexibility 

Cloud-based inventory tracking software solutions offer scalability and flexibility. Examine the add-on software applications that can be scaled to meet your business needs based on work volumes. This allows the solution to work for your daily operations and then also provides flexibility to respond to short term spikes in workloads if necessary.

User friendly 

When considering an inventory tracking software, ensure that you are choosing a solution that is user friendly and that employees of all levels will be able to utilise.

Conclusion

Inventory tracking software solutions are essential in ensuring that your downstream supply chain is operating effectively. Not only does this software solution enhance accuracy, but it provides vital information in real-time for demand and supply planning purposes. If your stock management is not handled effectively, it could negatively impact both service delivery and overall profitability. When considering an inventory tracking solution, look for a system that is user friendly, can be easily integrated into other systems, is scalable and one that will allow for real-time data tracking. 

When in doubt about what type of software solution to implement, turn to a partner with years of industry experience like Adapt IT Energy. As an Oil and Gas industry expert and thought leader, Adapt IT Energy, provides flagship software solutions to suit your unique business needs. We are a proud partner of ORTEC across South Africa and Africa and are able to implement advanced software planning solutions from beginning to end. Take your transport and distribution systems to new heights with software solutions designed for growth.

Discover the 8 tactics that improve efficiency and service in the downstream energy industry here. 

Digital Supply Chain Management_ Everything you need to know

Digital Supply Chain Management: Everything you need to know

Digital transformation is changing the way businesses are functioning globally, and the Oil and Gas industry is no different. To remain flexible, agile and profitable, companies have turned to technology and innovative software solutions to maximise operational efficiency and productivity. This shift is being seen in the downstream supply chain as many businesses make a move towards digital supply chain management. This shift sees the processes and systems related to routing, scheduling, transport, logistics and distribution of Oil and Gas being optimised using digital technology. Through the implementation of a digital supply chain management solution, Oil and Gas businesses will save on operational costs, increase service levels and customer satisfaction, mitigate risks as well as enhance performance and productivity. 

What is a Digital Supply Chain?

The term digital supply chain refers to the use of technology, specifically software solutions, that aim to automate and enhance the performance of the downstream supply chain. The focus of this being on processes and systems relating to logistics, routing, scheduling, warehouse management and the distribution and transport of products. So why are businesses turning to supply chain technology? The answer lies in the opportunity that this type of technology brings with it.

According to the World Economic Forum, the move towards creating digital supply chains in Oil and Gas companies, could unlock approximately $1.6 trillion of value for the industry, its customers and broader society. This is primarily due to how digitisation is able to optimise distribution and transport management processes within the business and impact profit margins that facilitate business growth and development. Considering that transport and distribution costs can easily represent 80% of a company’s operational expenditures, why would you not look to digital technology to optimise this? By creating a digital supply chain, companies can ensure:

  • Faster distribution of product – digital technology enhances the effectiveness of the supply chain and reduces the delivery time of products to customers. This is done by using advanced forecasting, predictive analytics, machine learning, and the big data capabilities that this technology provides. The insight from this digital data allows for a more precise forecast of customer demand, allowing you to plan accordingly to meet customer product and delivery needs.

  • More flexibility – ad hoc and real-time planning allows for a flexible reaction to changing demand or supply situations. Planning cycles and frozen periods are minimised, and planning becomes a continuous process that can react dynamically to changing requirements or constraints. This enables you to manage any disruptions or changes effectively and proactively without stalling any other processes in the downstream supply chain.

  • Tailored customer-focused services – customers are becoming more and more demanding and are looking for individualised products/services. Digital technology allows you to customise different elements to meet the changing needs of your customer.

  • Enhanced accuracy – digital supply chain management systems provide real-time access to data and end-to-end transparency throughout the supply chain. This provides full visibility on all systems and processes as well as a joint information basis for all levels of seniority and functions in the supply chain, thereby enhancing the accuracy of planning and operations.

  • Increased efficiency – efficiency in the supply chain is boosted by digital automation of both physical tasks and planning. The automation of these processes allows for tasks, such as picking, to be conducted quicker and more accurately, allowing for more efficiency and faster distribution.

The implementation of software and technology to create a digital supply chain is becoming increasingly popular as companies begin to understand the impact and value that this type of software can have on the business and its overall profit margins. Below we examine the specific value that a digital supply chain adds to the transport and distribution processes of an Oil and Gas company.

How does a digital supply chain add value to transport and distribution processes?

How does a digital supply chain add value to transport and distribution processes_

Many different elements can be optimised in the downstream supply chain through the use of digital software technology. These include:

Planning  

Supply chain planning is essential to the downstream supply chain. There are two types of planning operations:

  • Predictive analytics in demand planning – predictive analytics in demand planning analyses hundreds to thousands of internal and external demand influencing variables while using machine learning approaches to uncover and model complex relationships to derive an accurate and granular demand plan. The use of this planning capability enables a significant improvement in demand forecast accuracy and can reduce forecasting errors by 30 to 50 per cent.
  • Closed-loop planning – creates collaboration between different planning steps and transforms planning into a flexible, continuous process. This planning capability integrates pricing decisions with demand and supply planning, stock levels, expected demand, replenishment, to optimise the overall profit made and minimise inventories simultaneously.

Physical flow
 

A digital supply chain will positively affect the logistics and physical flow of product as it allows for better connectivity, provides advanced analytics, additive manufacturing, and advanced automation. The automation and digitisation of warehouse management will also impact the physical flow with many warehouses being fully linked to production loading points allowing for the entire process to be carried out without manual intervention.

Performance management 

Software technology allows you to access data in real-time. This access to data and information will allow you to identify critical supply chain disruptions and opportunities for operational improvement and solutions. The software will also assist in managing disruptions by automatically triggering countermeasures, such as activating a replenishment order or changing parameter settings in the planning systems, such as safety stocks.

Order management 

A digital supply chain allows for efficient order processing and real-time replanning. The automation of processes leads to lower costs, higher reliability due to granular feedback which enhances customer experience through immediate and reliable responses.

Collaboration 

By using cloud-based digital supply chain software, you can enhance collaboration between different business and operational teams. This collaboration along the value chain allows for much lower inventories overall through an exchange of reliable planning data, a step-change in lead time reduction through instantaneous information provision throughout the entire chain, an early-warning system and the ability to react fast to disruptions anywhere.

Supply chain strategy 
 

Through the use of digital supply chain software, you can utilise data and information to gain insight into your customer needs and requirements. This will allow you to provide tailored and customer specific products that add value to your customers, meet their specific requirements and minimise costs.

A digital supply chain enables you to plan and forecast effectively, ensures that your distribution process is fast and efficient and that any disruptions are identified before they become a costly problem. Through a digital supply chain, you can enhance visibility and productivity, but most importantly, you will be able to improve your service levels and drive customer satisfaction and business growth.

Barriers and Facilitators to Digital Supply Chain Maturity

Barriers and Facilitators to Digital Supply Chain Maturity

With so many benefits, why have some businesses not made the move towards a digital supply chain? There are three contributing factors:

People 

It is no secret that the Oil and Gas industry has a shortage of experienced and qualified people. This poses a real challenge in terms of employing staff who can do the required jobs effectively.

Processes 

In a business, there are many different business and operational systems and processes that need to be integrated. This is often a cause for concern for many companies in terms of the cost and amount of time required to create a seamless, integrated digital supply chain solution.

Technology 

The implementation of new technology is often a challenge in terms of training staff and ensuring seamless business and system integration. 

The benefits and value that a digital supply chain offers a business far outweigh the barriers. These barriers will also have a minimal impact on your business and operations if you choose a solution focused on your specific supply chain needs and partner with a service provider who understands the industry. 

Conclusion

Digital supply chain transformations are changing the way businesses are performing. The implementation of innovative software solutions ensures that you are able to meet your customers needs, faster, more accurately and effectively than ever before. Not only does this ensure that your transport and distribution processes are more profitable, but it enhances your customer satisfaction levels, giving you a competitive edge. There are barriers to the implementation of a digital supply chain that include skills shortages, the integration of different business processes and systems and the adoption of new technology. These barriers can be easily overcome by partnering with an industry expert and thought leader, like Adapt IT Energy. With years of experience in the Oil and Gas industry Adapt IT Energy provides flagship software solutions that drive transformation. Let us help you digitise your supply chain and grow your business.

4 Inventory Management Optimisation Tips

4 Inventory Management Optimisation Tips

Inventory Management is essential for the effectiveness of your downstream supply chain. Inventory Management is much more than just inventory and stock quantities coming in and going out of your warehouse. It includes the processes relating to the ordering, storing, and profiting from goods travelling down the supply chain from the supplier to customer. Imagine if one of the processes in this system is not working effectively, it can completely disrupt the whole downstream supply chain resulting in delayed orders, stockouts and unhappy customers. It is therefore essential to ensure that you have optimised your Inventory Management processes. In this blog, we’ll examine 4 different inventory optimisation tips and how they can benefit your Oil and Gas business.

How does Inventory Management impact the downstream supply chain?

Inventory Management refers to the management of material stock on a quantity and value basis. This includes the process of planning, entry and documentation of the movement of product and finished goods. If each of these processes is integrated and working efficiently, they can:

Positively impact customer experience – Inventory Management positively impacts sales channels and customer service. Through optimised inventory-related processes, you can reduce the delivery lead times and ensure that customers can have their orders fulfilled efficiently and effectively on time. 

Improve cash flow – your cash flow is largely dependent on your inventory. You spend cash to buy a product, and that inventory is then turned back into cash when it sells. If your inventory is not managed correctly, your cash flow could be compromised, resulting in fewer sales and orders fulfilled.

Avoid shrinkage – through optimising your Inventory Management processes, you can avoid product and inventory shrinkage due to human error, loss, damage or theft.

Optimise fulfilment – optimisation ensures that the process of receiving goods, processing and delivering orders to customers, is efficient and effective.  Orders are picked, distributed and transported with ease.

Avoid deadstock – Inventory Management systems allow you to track, manage and trace stock that may be close to expiry. This enhanced visibility ensures that you can sell that stock before it expires, this guarantees that you are not sitting with large quantities of deadstock in your warehouse.

There is no doubt that an optimised Inventory Management system has many different benefits to the downstream supply chain, but how do you create an optimised Inventory Management system? 

Top 4 tips on how to optimise your Inventory Management

Top 4 tips on how to optimise your Inventory Management

There are several different ways in which you can optimise Inventory Management.  These include choosing the right Inventory Management strategy or model, identifying Inventory Management techniques, examining your inventory-related costs and implementing an innovative Inventory Management software solution.

1. Develop an Inventory Management Strategy/Model

 

There are different types of Inventory Management strategy/models that Oil and Gas companies can use to optimise their systems. We examine two of these examples below.

Vendor Management Inventory (VMI) systems
 

This system focuses on bridging the gap between supply chain planning and execution, as well as viewing the supply chain from an end customer first position. This is done by giving you, as the supplier/vendor, more control over your customer’s inventory. This system allows you to monitor, plan and control inventory for your customers, to build stronger customer relations, enhance operational efficiency, and save on operational costs.

Consignment Inventory (CI)
 

In this supply chain management strategy, the product is stored on your customer’s property but you, as the business, retain legal ownership of the product, and your customer is not required to pay for the goods until after they have been sold. This approach rules out the need to coordinate shipments of inventory to the warehouse, saves in storage costs, reduces and eliminates stockout.

Many customers choose the strategy or model that best suits their business needs and requirements. With this said, businesses are turning to CI systems as the preferred approach, primarily due to the operational benefits associated with this system and the impact this has on customer service levels. 

2. Identify and use suitable Inventory Management techniques

There are several Inventory Management techniques that businesses utilise to assist with the optimisation of their supply chain. These techniques specifically look at the different ways that inventory can be calculated and ordered.  These include:

Economic order quantity 

Economic Order Quantity, or EOQ, is a calculation for the ideal order quantity a company needs to purchase for its inventory, using a formula with a set of variables like total costs of production, demand rate, holding costs, storage costs etc. This assists business in minimising costs for buying, delivering and storing products.

Minimum order quantity 

Minimum Order Quantity, or MOQ, refers to the minimum amount that can be ordered from a supplier. For example, if you have an MOQ of 100 units or R100, your customers must be able to purchase at least 100 units or spend R100 to be able to buy from you. This technique is beneficial in ensuring that you are making a healthy profit margin and keeping a stable cash flow.

ABC analysis 

This inventory categorisation technique splits subjects into three categories to identify items that have a substantial impact on overall inventory cost.

  • Category A – serves as your most valuable products that contribute the most to overall profit.
  • Category B – is the products that fall somewhere in between the most and least valuable.
  • Category C – is for the small transactions that are vital for overall profit but do not matter much individually to the company altogether.

Just-in-time Inventory Management

Just-in-time (JIT) Inventory Management is a technique that arranges raw material orders from suppliers in direct connection with production schedules. Companies receive inventory on an as-needed basis instead of ordering too much and risking dead stock. This technique is used to increase efficiency, reduce costs and decrease waste by receiving goods only as they are needed.

Safety stock inventory

The safety stock inventory technique is when extra inventory is ordered beyond expected demand. This is specifically used to prevent stockouts typically caused by incorrect forecasting or unforeseen changes in customer demand.

FIFO and LIFO

FIFO and LIFO are methods used to determine the cost of inventory. FIFO, or First in, First out, assumes the older inventory is sold first. FIFO is a great way to keep inventory fresh. LIFO, or Last-in, First-out, assumes the newer inventory is typically sold first. LIFO helps prevent inventory from going bad.

Many businesses may choose to implement a number of these techniques depending on their specific Inventory Management needs and requirements.

3. Factor in Your Inventory Management Costs

3. Factor in Your Inventory Management Costs

There are several substantial costs associated with the procurement, storage and management of inventory that businesses need to calculate.  These costs will provide more visibility and insight into the business and will enable the identification of any problem areas and cost-saving opportunities. There are three inventory costs that you need to consider, these include:

Ordering
 

This refers to the cost of acquisition and the inbound logistics related to the cost of procuring inventory. This consists of the time spent finding suppliers and expediting orders, the clerical cost of preparing purchase orders, transportation costs, as well as costs relating to the receiving, unloading, inspection and transfer of products.

Holding 

This includes the cost of storing physical inventory, such as building and facility maintenance-related costs. Costs included are storage and warehousing, rent, electricity, security, insurance against theft, loss or damage, etc.

Shortage 

These are the costs incurred when a business runs out of stock. This includes costs related to time lost when raw materials are not available, idle employees who are not able to do their jobs, filling backorders through expedited shipping etc. The biggest cost of all is the impact on customer satisfaction and service levels when there is a shortage.

By examining Inventory Management costs, you will have the visibility needed to reduce costs and identify opportunities to improve productivity and efficiency. 

4. Implement an Innovative Inventory Management Software Solution

Digital transformation in the Oil and Gas industry has come a long way in recent years. Many innovative software solutions have been developed to ensure the effectiveness and efficiency of the downstream supply chain, including the development of Inventory Management software solutions. These software solutions aim to make the process of Inventory Management as efficient and straightforward as possible, can factor in or integrate the elements mentioned in the tips above. Through the implementation of an Inventory Management software solution, you can enhance productivity and profitability by:

Accessing real-time data 

With this software, you can access real-time data related to inventory stock, storage and control. This enables you to respond to customer orders accurately and efficiently as well as proactively adapt to any challenges or problems that may arise. This provides more visibility over the downstream supply chain, enabling you to manage and identify any potential issues before they happen and reduce unnecessary operational costs while facilitating business flexibility and agility.

Through dynamic planning and forecasting

This software solution aims to automate data-driven planning processes for consensus demand and supply forecasts, to support sales and operations, point of sale, supply planning and inventory optimisation. These capabilities aim to assist in eliminating out-of-stock situations by implementing reorder point automation, reducing oversized deliveries/returns and long-term distribution costs. This ultimately saves on costs, positively impacts customers relationships and enhances profitability.

Enhancing the purchasing of inventory 

From the real-time data and analytics provided by the Inventory Management software, you can make data-driven decisions related to the purchasing of inventory. Inventory Management software improves the accuracy and management of inventory levels by providing you with the information needed to order the right amount of inventory to fulfill customer orders. This reduces deadstock and saves on storage costs needed for excess stock.

Implementing a cloud-based solution 

Many Inventory Management software solutions are cloud-based. This type of solution allows for more accuracy, traceability and insight into stock levels. It provides instant stock level updates, allows for a reduction in human error, automates supply chain processes relating to customers’ orders, ensures that all information is safe and secure, and allows for quick and effective reporting to measure performance.

Conclusion

Inventory Management software solutions have become a popular tool used by large and small businesses to optimise their transport and distribution processes. This is primarily due to the benefits relating to enhanced accuracy of inventory levels, operational cost savings, improved productivity and profitability. By optimising your Inventory Management processes, you can give your business a competitive edge, but you need to choose the right solution for your business’s specific needs. 

Adapt IT Energy is an expert advisor and thought leader with years of experience in the Oil and Gas industry, who provides state of the art flagship software solutions to transform businesses. Let Adapt IT help you optimise your Inventory Management systems and move your business forward, with a downstream supply chain solution that is fit for purpose. 

Why Supply Chain Management in ERP Ensures Efficient Operations

Why Supply Chain Management in ERP Ensures Efficient Operations

Supply Chain Management (SCM) and Enterprise Resource Planning (ERP) systems work hand in hand to enhance the efficiency and optimisation of businesses, especially in relation to transport and distribution processes in the oil and gas industry. Both systems aim to improve productivity through the digitisation and automation of different business processes. By integrating Supply Chain Management in ERP you can enhance business and operational efficiency, create better visibility, ensure customer satisfaction, improve productivity and ultimately increase profitability.

Defining (SCM) Supply Chain Management and ERP systems

In order to understand how supply chain management in ERP systems work together to enhance business operations, it is important to first look at the individual software functions and benefits.

ERP system 

This is a software solution that has been designed to manage and optimise all the key processes within a business, including finance, HR, supply chain, services, procurement, purchase orders, customer orders and more. ERP software can integrate all processes into one centralised system while making use of machine learning and artificial intelligence to enhance visibility and efficiency across every part of the business. The benefits of this type of software include:

  • Higher productivity – the role of ERP is to streamline and automate your core business operations to enhance productivity
  • Deeper insights – eliminate information silos providing greater visibility and allowing for proactive decision-making opportunities
  • Accelerated reporting – gain real-time access to business-critical insights and analytics that allow you to identify opportunities to improve performance and efficiency
  • Improved agility – with efficient operations and access to real-time data, you can quickly identify and react to new opportunities or problems that may arise and manage them effectively without affecting business operations or customer relationships.

Supply Chain Management Software 

 

Supply Chain Management (SCM) is the management of the flow of goods, data and finances related to a product or service, from the procurement of raw materials to the delivery of the product at its final destination. In terms of the oil and gas industry, this includes processes relating to order fulfilment, inventory management, routing, scheduling, transport, logistics and distribution processes. The benefits of this software solution include:

  • Cost reductions and improved profitability – through supply chain optimisation, you are able to remove silos and increase transparency. This enables you to identify cost-saving opportunities and proactively tackle costly problems that may arise, which impacts profitability.

  • Better efficiency and flexibility – when all components of the downstream supply chain are connected and working as they should, you can process and distribute orders, as well as enhance flexibility and the customer experience with speed and accuracy.

  • Greater visibility and improved control – greater visibility ensures that you have more control. If an issue arises with one component you can proactively assess the problem, manage each of the other components so that they are not adversely affected and find a solution.

  • Better service and a competitive advantage – customer satisfaction and service delivery are central to the success of a business. By optimising your supply chain, you can provide your customers with what they need, when they need it, thereby setting your business apart from the rest.

From the above, it is clear that both ERP solutions and SCM software have many similar benefits, but there is one primary difference between the systems. ERP software focuses on a business’s internal administrative process while SCM software manages the processes related to the planning, sourcing and delivery of the product to customers. Both impact the efficiency and operations within the downstream supply chain, which is why many businesses choose a solution that combines Supply Chain integration in ERP software. This integrates business and operational processes and gives you an overview of the entire business system rather than its separate parts. 

How SCM and ERP transforms the Downstream Supply Chain

How SCM and ERP transforms the Downstream Supply Chain

A business has many different moving parts and operations, and keeping control of each is often a challenge. The implementation of an integrated supply chain management in ERP solution enables you to manage these different operations with enhanced real-time visibility as it integrates data and processes from all functions of the organisation to give you a holistic view. This improved visibility allows you to identify problems or issues that may be affecting performance, productivity and profitability. By using this insight, you are then able to implement processes and adjust operations to reduce operational costs and increase performance. Another benefit of this integrated solution is that it is scalable which means that it can grow with your business and adapt to what your needs and requirements are at different stages.

An integrated software solution that combines Supply Chain Management in ERP also can transform the effectiveness of several supply chain strategies and operations. These include the following.

Purchasing management

 

An ERP system that is integrated with an SCM solution provides businesses with automated purchasing tools that have been designed to improve collaboration, order accuracy, streamlining order fulfilment processes, and performance. The result of this is improved on-time delivery, a reduction in inventory levels and costs, and enhanced profitability.

Demand management

 

This type of SCM software assists in optimising inventory management by using statistical forecasting and planning tools that allow for collaboration, consolidation and adaptation. This software provides critical analytics and insights into inventory and stock management, which enhances flexibility, improves fill rates and ensures customer satisfaction and on-time order delivery.

Inventory management

 

These management solutions allow you to digitise, automate and simplify inventory management processes. This software provides you with increased visibility to save on operational costs by enhancing inventory control processes and optimises the use of resources which includes equipment, space, time and people.

Warehouse management

 

These systems link warehouses with order processing and manufacturing operations to optimise the picking, distribution and transport processes. This assists in reducing errors and wasted resources while also providing greater visibility and better utilisation of resources, thereby enhancing profitability and reducing operational costs.

The benefits of Supply Chain Management in ERP

The benefits of Supply Chain Management in ERP

From the above it is clear that an integrated supply chain management in ERP software solution has the ability to enhance productivity and help optimise the downstream supply chain, but what are some of the other benefits to an oil and gas company?

  • The optimisation of the supply chain – by automating your business processes, you can centralise all your data and monitor your day-to-day options in real-time. This allows for automated data-driven planning processes and consensus on demand and supply forecasts, to support sales and operations.
  • Integration and streamlining of processes – this solution improves efficiency across multiple departments in the supply chain. It integrates business data with operational data which provides more visibility over the whole business.
  • Synchronised reporting – this software uses analytics from both systems to predict, analyse, measure and compare performance related to inventory routing and scheduling, transportation, logistics and fuel distribution. These reposts allow you to identify cost-saving opportunities and to evaluate productivity.
  • Increased data management – use this software to access accurate and up to date real-time inventory information that can be shared with your customers and used to identify problems and address them proactively.
  • Enhance performance – gain better insight into operational processes and identify opportunities for enhanced productivity.

Conclusion

Software solutions that integrate Supply Chain Management in ERP continue to provide businesses with enhanced visibility throughout the whole organisation. This integrated solution contributes to organisational growth by enhancing performance, data management and operations across the downstream supply chain. Adapt IT Energy is a trusted SCM and ERP software solutions provider. With extensive experience in the oil and gas industry Adapt IT Energy will help you find an integrated software solution that will drive growth and performance.

What is SAP IBP

What is SAP IBP?

The Oil and Gas Industry is dynamic and ever changing, with varying degrees of uncertainty from day to day. This, coupled with more competition and increasing customer expectations, puts Oil and Gas companies under even more pressure to ensure that their supply chain is functioning optimally.  The core of this is the management of supply chain planning and the need for real-time visibility and responsiveness to any unplanned disruptions, which is why many businesses have turned to innovative software solutions to answer these needs. One such software is the SAP IBP (Integrated Business Planning) for Supply Chain management.

What challenges are affecting the Oil and Gas industry?

The Oil and Gas industry is complex and filled with uncertainty relating to demand, pricing, and competition, adding to this complexity is the management of the overall supply chain, especially in relation to transport and distribution operations. Other challenges facing the industry include:

Unpredictable demand

Supply and demand changes pose a significant risk for Oil and Gas companies. This is primarily due to the capital required and time taken to adjust operations to unpredicted changes.  Many supply chain operations are unable to respond quickly enough to changes, and as a result, incur financial losses.

Operational complexity

The Oil and Gas supply chain is made of several different moving parts. The complexity lies in the integration and control of all of these systems and processes, which need to be managed effectively to ensure productivity, profitability and customer satisfaction.

Low visibility

This is one of the biggest challenges experienced by operations and supply chain teams. Without an eagle-eye view of the supply chain operations that include demand, supply, inventory, distribution and transport systems, you will be unable to identify possible issues, problems or risks and manage them proactively. This ultimately puts you on the back foot and can negatively impact your profit margins.

Cost pressure 

The Oil and Gas industry is no stranger to price fluctuations and the impact this has on supply and demand. This cost pressure affects every aspect of the business, including supply chain operations. Companies in this industry need to continually look at cost-saving opportunities and ways to reduce operating costs to enhance profitability in relation to cost pressure.  

Each of these challenges impacts the responsiveness, flexibility, and overall productivity of the supply chain and business. To answer these challenges, many Heads of Operations have turned to innovative software technology to create a digital supply chain that optimises demand planning and operations management.  One such solution is the SAP IBP for Supply Chain.

Taking a more in-depth look at SAP IBP for Supply Chain

Taking a more in-depth look at SAP IBP for Supply Chain_

SAP Integrated Business Planning (IBP) powered by SAP HANA enables companies to respond to the above challenges and new market expectations. This cloud-based software solution aims to make supply chain planning more productive, responsive, and strategic by providing real-time insights into demand and supply.

This technology provides you with cloud deployment, planning processes, real-time scenarios and simulation, social collaboration and powerful predictive analytics, which will assist your business in:

  • Increasing customer service levels
  • Ensuring the timely delivery of product
  • Agility to overcome any supply chain disruptions
  • Decreasing inventory levels through inventory optimisation
  • Anticipating the market demand for planning and forecasting purposes

One of the main features of the SAP IBP software is Intelligent visibility. This enables businesses to be more flexible and agile in the face of disruptions and challenges. When there is an unexpected disruption, this software provides you with real-time insights, data and information necessary to adjust supply chain planning and activities. This ensures that these disruptions have minimal impact on performance and profitability and that you are still able to meet customers’ demand and supply requirements.

SAP IBP Components

SAP IBP Components

The SAP IBP software is a modular system that allows you to implement different components relating to your business needs and requirements. These components include:

Integration with SAP Supply Chain Control Tower 

This component provides you with end-to-end visibility of your supply chain which will allow you to implement fast corrective action to unexpected delays or challenges. Enabling you to ensure on-time delivery performance, despite disruptions to the supply chain. It also allows you to decrease overall inventory levels while reducing risk and aims to boost supply chain agility and reduce costs.

Sales and Operations Planning

This planning application aligns sales and operations plans to increase profitability and market share. This is done through several innovative tools that aim to balance demand and supply, increase the speed and agility planning, improve forecasting accuracy and on-time delivery.

Demand Management 

Provides full transparency with features for demand sensing and short-term, mid-term and long-term forecasting. This ensures quicker reaction times on short-term demand changes and more accurate statistical forecasting.

Inventory Optimisation 

This component provides inventory targets that not only meet or exceed customer service levels but that also reduce working capital. This tool maximises the efficiency of inventory and working capital, automates and standardised planning processes, enables more competitive inventory target-setting cycles, and ultimately reduces product and distribution costs.

Response and Supply Planning

Allows you to adapt quickly to the changes in demand. This is done by considering the impact across the entire supply chain. This component examines operations relating to production, distribution, and procurement, it then allows for strategic, tactical, and operational supply planning within a single solution. Enabling you to plan effectively by using simulations, what-if scenario, pegging and predictive analytics to optimise profits and enhance customer service.

Conclusion

The SAP IBP solution for the Oil and Gas industry plays a significant role in ensuring that your supply chain can adapt to challenges and disruptions by providing real-time supply chain management and visibility. This software solution enhances the flexibility and agility of your supply chain demand planning and operations,  providing you with business planning tools that allow you to examine different scenarios and situations in order to answer any challenges and disruptions that may arise proactively. Adapt IT Energy is an official SAP Partner and offers the complete SAP IBP solution to assist in optimising your transport and distribution processes. Let Adapt IT Energy drive your supply chain to new heights with SAP IBP. 

How to Optimise Your Warehouse Management

How to Optimise Your Warehouse Management

Warehouse management plays a vital role in the efficiency of the downstream supply chain in the oil and gas industry. It involves processes relating to the monitoring of stock and inventory levels, storage of product and equipment maintenance, all of which can affect the profitability of the business and the effectiveness of the overall supply chain. In recent years, the importance of warehouse management has come to the forefront. As a result, there have been several technological and software developments that have been designed to specifically optimise warehouse management operations to reduce costs and losses, save on time and enhance productivity.

The importance of Warehouse Management and the challenges it faces in the oil and gas industry

Warehouse management ultimately keeps products flowing efficiently through the downstream supply chain, which becomes essential in ensuring customer satisfaction and securing an increased profit margin. When warehouse processes are optimised and running as they should, the company can ensure that the supply chain is reliable and that shortages, hold-ups etc. are a rare occurrence. This can only be done if there is full visibility and optimisation of all the elements and processes related to warehouse management.

To ensure that you have full visibility you need to have insight into processes related to inventory management and location, warehouse layout and space, picking methods, quality control as well as your employees and their skills levels. Each of these elements can negatively impact the warehouse management processes in the following ways:

Inventory accuracy 

 
 Keeping an accurate, real-time up to date count of inventory items is often a challenge, with one of the most common issues relating to human error.

Efficient warehouse space and layout

 
 Warehouse layout can either enhance or unravel your warehouse operations. The way in which your warehouse is designed should fit your operational needs. Often finding a space suitable for a warehouse that meets the operational requirements of your business is a challenge which is why design and layout are so vital.

Picking processes

 

Picking, receiving, and put-away tasks are interlinked. If put-away tasks are not managed effectively, the wave picking process will not be effective. If the product is not found on the correct shelf or rack, it could hold up the entire picking, distribution and transport process. This, in turn, has an impact on customer satisfaction levels and overall productivity.

Highly qualified staff 

 
 Qualified and experienced staff in this industry are in short supply which is a real challenge in terms of employing staff who can do the required jobs effectively.

These challenges heavily impact warehouse management and the overall supply chain. If one process is not working as it should, there will be delays experienced throughout the entire system. There have been several technological and software advances, like Warehouse Management Systems (WMS), that have been designed to overcome these challenges.

How to improve Warehouse Management processes?

How to improve warehouse management processes_

Warehouse management is complex with many moving parts, but there are several ways to optimise and improve these operations, which includes implementing a Warehouse Management System (WMS). By implementing this software solution, you can ensure:

Better utilisation of warehouse space 

 

The use of Warehouse Management System (WMS) software assists in optimising the design of the warehouse. This allows companies to customise workflows and picking logic to make sure the warehouse is designed for optimised inventory collections and distributions. This also creates an optimised storage location for inventory and stock.  

Inventory management and tracking 

 

There are several types of inventory management systems available that allow for real-time intelligent information processing in the warehouse to maximise efficiency. These tracking systems make use of different types of technology like RFID and barcode scanners to track and monitor inventory in your warehouse. They are useful in locating inventory in relation to receiving stock, customer orders, order picking, and order distribution.

Minimise the need for paperwork  

 

Warehouse management software allows for all information that used to be maintained using hardcopies/paper, like tickets, packing lists etc. to be tracked, uploaded, maintained and managed digitally. This saves on time, storage space and resources.

Enhanced cycle counting 

 

This type of software system provides insight into data related to locations, movement, storage etc. This data will allow you to schedule cycle counts in a proper and organised manner. This software also enables you to increase cycle counts and the accuracy of the inventory recorded, which assists in planning and forecasting.

Procedures and processes are optimised for productivity 

 

Warehouse Management Systems (WMS) assist in optimising the material flow. They can integrate and automate different processes to enhance accuracy and productivity.

Benefits of optimised Warehouse Management

Benefits of optimised Warehouse Management

There are several benefits to implementing a Warehouse Management System (WMS), that relate to the optimisation of warehouse operations. These include:

Reduction of costs – as mentioned above, Warehouse Management Systems (WMS) allows you to optimise the layout and space of the warehouse. This will potentially reduce the waste of premium floor space and the time taken to move materials, pick and distribute products. By considering the best locations to store products and designing the warehouse to fit your unique operating needs, you can lower operating expenses and enhance productivity.  

Boost in transparency – this type of software solution will provide you with accurate real-time data relating to inventory levels. This will assist in inventory forecasting and planning to ensure that you can meet customer demands and needs.

Increase in accuracy and productivity – by optimising warehouse management processes, you can efficiently and more accurately find inventory availability and their location. This ultimately enhances the speed of order fulfilment and reduces any delays due to human error.

Proactive problem solving – warehouse management software will provide you with accurate and real-time data relating to your warehouse, which can be used to track productivity and distribution. This will enable you to proactively identify and manage any potential problems or issues a lot faster.

Enhance customer service – Warehouse Management Systems (WMS) positively impact sales channels and customer service. Through the optimisation of warehouse operations, customers are able to have their orders fulfilled efficiently and effectively, ensuring that they get what they ordered on time.

Conclusion

Warehouse management technology has become essential in ensuring that your downstream supply chain is running productively, accurately, and efficiently. Many of the warehouse management challenges faced by those in the oil and gas industry can be answered by implementing a Warehouse Management System (WMS). The software solution needs to be tailored to the unique needs of this dynamic industry. Adapt IT Energy has years of experience and knowledge in the industry and will be able to provide you with a Warehouse Management Systems (WMS) solution geared not only to this industry’s needs but your specific business requirements.

Factors Affecting Supply Chain Technology in the Energy Industry

Factors Affecting Supply Chain Technology in the Energy Industry

Digital transformation is one of those popular terms that is often included in conversations relating to the oil and gas industry, specifically supply chain management. This term refers to the use of technology and digital software solutions to enhance how the supply chain runs, is used to optimise operational and business processes, reduce costs, and increase business profitability. There are several factors affecting supply chain technology and digital transformation including competition and costs, demand forecasting and planning, talent shortages and more. For supply chain technology to be effective, it is essential to have a solution that fits your specific business needs, giving your business the competitive edge needed to drive ROI and productivity.

Why is supply chain technology essential?

Supply chain technologies have become a strategic tool used in both small and large companies to provide a competitive advantage and meet consumer expectations. Today, technology is visible in every possible area in business, from processing and tracking transactions, planning, scheduling, routing, transport, distribution, product management and storage. Supply chain technology is used to integrate, optimise and ensure visibility in the supply chain, which has a monumental impact on business profitability, especially in identifying opportunities for reducing operational costs. Supply chain management technology aims to:

  • Simplify business and system processes, reduce timelines and enhance productivity
  • Manage every aspect of the product movement process with ease and efficiency
  • Implement automated support and maintenance solutions to streamline processes, enhance performance and save on time and money
  • Enhance your capabilities and increase ROI by implementing effective advanced planning, transport and distribution solutions that help effectively manage logistics and supply chain processes.

In the oil and gas industry, these technologies optimise every stage of the supply chain. The benefits of these supply chain technologies are seen in the following areas of the business:

Procurement processes

Supply chain management technologies play an important role in the procurement and sourcing processes within a business. These technologies often provide the data needed to identify problem areas and opportunities for cost savings. The use of these technologies provide a 360 degree view of your suppliers, giving you the insight needed to negotiate pricing, contract and payment terms. These technologies ultimately assist the Head of Operations with sourcing from suppliers, saving and costs, reducing industry pressure and more. 

Distribution channels 

These technologies allow you to effectively manage and automate your supply chain planning, forecasting, routing, scheduling and fuel distribution. They provide you with access to insights and accurate up to date real-time inventory information which assists with proactive decision making.

Improve workforce 

These technologies also streamline complex tasks and allow employees to manage their workload effectively. They aim to reduce errors and ensure that clients have the product they need when they need it, positively impacting customer satisfaction levels.

There are many benefits to using supply chain technologies, but in order to delve deeper into how they can impact your business, we need to look at different trends that contribute to supply chain complexity and performance.

Trends that contribute to supply chain complexity and performance

Trends that contribute to factors affecting supply chain technology, complexity and perfromance

The supply chain is made up of many different moving parts, systems and processes and the management of each of these is a complex task. This complexity has resulted in several trends being identified to meet the growing need for supply chain management technologies. These trends include:

  • Industry 4.0 – this is often referred to as the fourth industrial revolution and talks to the shift taking place in manufacturing and the process of digital transformation. Industry 4.0 uses a combination of cyber-physical systems, the Internet of Things and the Internet of Systems to make the idea of a smart factory a reality. In this reality, computers and systems are connected, smart machines support the supply chain process and provide access to more data which ensures that operations are more efficient, productive and less wasteful. Ultimately, a connected supply chain can adjust and accommodate when new information is presented. For example, if a weather delay ties up a shipment, a connected system can proactively adjust to that reality and modify priorities.

  • Globalisation – has created an opportunity for businesses to venture into new markets, cross borders, expand supplier basis and to build businesses, thereby extending and interconnecting global supply chains. With this opportunity, comes many challenges that include changing consumer demands, increasing regulatory and sustainability requirements that need to be managed effectively for businesses to be profitable. The answer to these challenges is the development of innovative software technology.

  • Customer Software Integration – is essential for supply chain management. To effectively manage the different moving parts of a supply chain, you need to have an integrated software solution that provides visibility over the whole downstream supply chain. This visibility enhances the flow of information within the company, making it easier to measure and adjust operations when needed. This increases business flexibility and allows the business to adapt to client requests, competitors’ actions, and events within the industry while reducing waste and lowering costs. 

These trends have created a demand for more advanced software features and capabilities to help businesses make better data-based decisions to enhance the overall downstream supply chain. But there are several factors that affect the supply chain technology and software that need to be taken into account

Factors affecting supply chain technology in the oil and gas industry

Factors affecting supply chain technology in the oil and gas industry

The factors affecting supply chain technology within this industry, include:

Competition and Costs

More and more businesses are seeing the benefits of supply chain technology and understand that SCM is essential to ensuring fast and reliable delivery of orders and healthy profit margins. With this comes an increase in the number of software technology suppliers and differentiation in costs, often leaving customers confused and overwhelmed. It is vital to look at a software solution that fits your business requirements and specific needs, one that is flexible and scalable and can grow with your business.  

Demand Planning and Forecasting

Demand planning and forecasting technology and software are vital to the success of supply chain management (SCM), but companies and employees who often have this responsibility are caught between the need to generate better forecasts and develop consensus planning and the limitations of the tools at their disposal. The success of supply chain technologies lies in choosing the right solution for your business to efficiently generate better forecasts, provide positive and timely customer experience, and ensure supply and demand.

Staff competency and talent shortage

The skills gap is something that specifically affects supply chain technology. Not having access to staff that are experienced and knowledgeable about supply chain management technology can directly impact how your supply chain runs. With the oil and gas industry being so specialised, it is necessary to have staff that are competent and able to use, understand, interpret and manage the software to drive business productivity and reliability. 

Outsourcing

Outsourcing supply chain management has become popular within the industry for many reasons which include the above-mentioned staff and talent shortage as well as competition and costs. Many businesses are looking at third-party logistics providers to take over the hassle of managing their supply chain. These businesses are often unaware that there are specific supply chain technologies that can be implemented to enhance business profitability without outsourcing. It is all about finding a software provider that is knowledgeable and has experience in the industry, to find a solution to fit your businesses specific needs.

Customer-centric approach

Many businesses are looking for a more customer-centric approach and technologies that support this. This approach drives both interest and investment in cloud-based planning tools with integrated Artificial Intelligence (AI), machine learning, and analytics. This creates opportunities for innovation, a better meeting of customer expectations, rapid customisation and configuration, and the ability to monetise product and asset performance.

Conclusion

There is no doubt that technology is essential to the management of your supply chain, especially when looking at the effects of globalisation and Industry 4.0. But there are a number of factors affecting supply chain technology within the oil and gas industry that are a concern for businesses. These factors include staff and skills shortage, outsourcing, demand forecasting etc. For businesses to find a technology solution to fit their specific needs, they need to turn to a provider with experience and knowledge in the oil and gas industry, such as Adapt IT Energy. Adapt IT Energy assist in delivering supply chain software solutions that are scalable, can grow with your business and ultimately ensure that your downstream supply chain is optimised. By utilising supply chain technology effectively you can drive your business forward. 

What is ORTEC Inventory Routing (OIR)

What is ORTEC Inventory Routing (OIR)?

Over the years, many industries, including the oil and gas industry, have turned to technology to improve and optimise systems within the downstream supply chain. The advances in software technology, specifically within this industry, has focused on using data and analytics to fuel change, enhance reliability, optimise processes and facilitate better organisation within the supply chain. The results of this type of optimisation include cost reductions, increased profitability and enhanced customer satisfaction. One such solution that answers to this is the ORTEC Inventory Routing (OIR) software.

Who is ORTEC?

ORTEC is the world’s leading supplier of mathematical optimisation software and advanced analytics. The business has around 1,000 employees and offices in 13 countries around the globe. ORTEC focuses on assisting energy companies in gaining operational insights to optimise their supply chain. 

It is no secret that volatile demand and prices, dwindling reserves, rising costs and stringent regulations are impacting this sector. ORTEC software solutions aim to address these issues and provide insight and information to companies helping them increase profitability, visibility and ROI of supply chain processes. This is done by embracing technology and innovations, such as inventory routing software, that leverage data and allow you to provide cutting-edge services to stay competitive in the market.  

What is Inventory Routing?

What is Inventory Routing

Inventory routing allows you, as the supplier, to deliver products to several customers while simultaneously optimising inventory management, vehicle routing, and delivery scheduling. ORTEC’s Inventory Routing (OIR) software allows you to effectively plan the delivery of products to different customers in a specific area. This solution is relevant for companies who manage their customer’s inventory, as is the case within a Vendor Managed Inventory (VMI) environment. In this environment, you as the supplier, make the replenishment decisions for products based on specific inventory and supply chain policies. 

This innovative inventory routing software solution plays an important role in scheduling and planning processes. This software automates processes relating to when to service a customer, how much product needs to be delivered and assists in developing vehicle routes that service different customers in the same area. By using this software, you can save on distribution and production costs by coordinating shipments made to different accounts. Customers also benefit from increased fill rates, fewer stock-out situations, and lower inventory levels.

This software solution enables you to effectively manage, organise and plan distribution, transport and delivery of product to your customers with ease and more visibility.

The challenges that inventory routing software answers to

Inventory routing and planning comes with many challenges relating to:

Limited insights and visibility 

Without insight and visibility into supply chain processes like stock replenishment, historic routes and deliveries, you are unable to get a full view of your supply chain performance. This means that you cannot identify potential problems and address them proactively. This puts you and your business on the back foot by having to react to things as they happen, which is often very costly.

Updating existing toolsets to better analyse costs 

Without updated software that provides real-time tracking and analytics, you are unable to identify cost-saving opportunities and enhance your service delivery levels.

Reducing high costs and inefficiency in supply chain network design 

Without access to analytics and data relating to truck utilisation, resource utilisation, fuel per km, on-time deliveries etc. you cannot analyse performance over time. Without this insight, you will not be able to identify high-cost areas and rectify processes needed to reduce costs within the supply chain.  

Upgrading order planning and route scheduling system 

With so many moving parts that need to be managed effectively not having a software solution that combines planning and routing processes and scheduling could end up costing the business in the long run.

ORTEC Inventory Routing (OIR) software solutions were created to address these challenges and needs by combining forecasting and planning, optimisation with real-time execution capabilities in one useful tool.

Key benefits and solutions that reduce planning and routing challenges

Key benefits and solutions that reduce planning and routing challenges

The ORTEC Inventory Routing (OIR) solution is a powerful tool that supports demand forecasting and route planning. This is essential in the case of transport and distribution within the oil and gas industry where product costs and delivery costs are high. Inventory and transportation costs can easily represent 80% of a company’s operational expenditures which is why it is so essential to implement a solution to effectively manage these processes. 

The ORTEC Inventory Routing (OIR) software solution reduces expenditure and costs associated with the transport and distribution of product through:

  • Centralised deployment which brings cost savings as only one application is maintained, with a single interface between ERP/TMS applications, in-vehicle devices and onsite equipment.

  • Enhanced forecasting which brings forth improvements in average drop size, elimination of out-of-stock or run-out situations, reduction in oversized deliveries/returns, reduction in long term distribution costs.

  • Improved customer service through enhanced communication and service delivery.

  • Providing quick simulation of alternate planning scenarios and delivery strategies to determine the best product mix.

  • Reduced transport costs as a result of better-planned delivery moments and quantities, reduced distances, driving time and vehicle utilisation.

  • Reporting and analytics which are based on standard Microsoft SQL server reporting services aimed at providing real-time data and insights to support proactive decision making.

  • Transparent route planning and vehicle costs which are identified through the analytics and reporting capabilities.

  • Reduction in time required to plan and dispatch product orders because of enhanced optimisation and efficiency 

Why choose this solution for your business?

The ORTEC Inventory Routing (OIR) software is a single environment solution that combines forecasting, planning, optimisation with real-time execution and dispatch along with analytic and reporting functionality. This solution also enhances business processes through:

Software integration – this software solution combines different work processes in one environment, allowing various departments to use one effective tool.

Scalability – add-on solutions can be scaled to meet your business needs based on work volumes. This allows for process security in your daily operations and the flexibility to respond to short term spikes in workloads if necessary.

Profitability – typical savings in the oil and gas industry are about 30% reduction in cost per litre.

Conclusion

Inventory routing is vital to the successful running of your downstream supply chain, which is why implementing the right inventory routing software is so important. With the right software in place, like the ORTEC Inventory Routing (OIR) solution, you will be able to manage, organise and plan distribution, transport and delivery of product to your customers with ease. The result of this is cost reductions, increased profitability and enhanced customer satisfaction. Adapt IT Energy is a proud partner of ORTEC across South Africa and Africa. We can implement this advanced planning solution from beginning to end, for both smaller and larger businesses within the oil and gas industry. Let Adapt IT Energy help improve your transport and distribution processes with the ORTEC Inventory Routing (OIR) software.

Types of Inventory Control systems in the Oil and Gas Industry

Types of Inventory Control systems in the Oil and Gas Industry

Digital transformation in the oil and gas industry has seen the development of several software solutions that assist in optimising and managing the downstream supply chain. The supply chain consists of many different systems that need to be regulated and integrated, one of these moving parts lies in inventory control. Several types of Inventory control systems work to assist in maximising profits, creating greater visibility of stock, enhancing quality control and reducing operating costs. 

What is Inventory Control?

Many people often confuse inventory management and inventory control. Both processes fulfil different roles but are interlinked in the supply chain. Inventory management includes inventory control but involves activities that include the sourcing, forecasting and replenishment of stock in every stocking location or warehouse. 

Inventory control, on the other hand, involves the monitoring of stock levels and knowing what, where and how much inventory is on-hand in a store, stockroom or warehouse. Inventory control regulates the inventory that is already in a distributor’s warehouse. Warehouse management is, therefore, an essential component of any inventory control system. This ensures that you, as the supplier, know exactly where each product is located in the warehouse, guarantees that all inventory remains in great condition, and assists in laying out the warehouse in a way that minimises the costs related to filling customer orders. In the case of larger companies, inventory control systems are also supported by ERP software solutions to ensure full operational optimisation and management. 

Different types of Inventory control systems make use of several different innovative technology solutions that are fit for purpose in this dynamic and ever-changing industry. 

Trends in Inventory Control Systems

Trends in Types of Inventory Control Systems

Over the years, innovations in technology have seen several trends develop in the inventory control space with the aim of helping to streamline supply chain activities. These trends effectively track and manage the movement and sales of your inventory items in real-time. Some of these trends include: 

  • QR Codes – Quick Response Codes (QR Codes) are a type of 2D barcode. They offer a 2D view of data and enhance manual inventory tracking. These codes let you know of a shipment’s location, times when scanning occurred, how many scenes were taken through the shipment journey and more. QR Codes allow you to automate processes in your ERPs, WMS, CRMs, ordering systems, and their use can help prevent loss through the shipment’s journey.

  • RFID – Radio Frequency Identification (RFID), provides a “3D view” of data. There are two types of RFID tags. These include Active RFID and Passive RFID. Active systems make use of a transponder on the shipment. That transponder receives and transmits data. Passive systems only reflect a signal to a reader. RFID offers reliable applications and allows for greater automation of tasks through its scanning capabilities. In terms of inventory control, identification RFID enables warehouses to readily identify inventory still on the truck, to include item-level accuracy. RFID tracking improves the ability to locate items quickly, prevent theft, and can be used in tracking returnable assets (pallets, containers, etc.).

  • Mobile Devices – In many situations companies’ inventory and assets move between storage locations, employees, clients, vehicles or job sites. Mobile devices enable you to track assets movements and inventory stock changes.

  • Voice systems – voice-directed systems can improve picking accuracy and the speed of the pick performed by the warehouse staff. Voice picking systems use speech recognition and speech synthesis to allow warehouse operators, who are performing the picks to communicate with a Warehouse Management System (WMS). 

Types of Inventory Control Systems

There are several types of inventory control systems that enhance transportation and distribution processes within the oil and gas industry. These solutions allow for the real-time intelligent information processing in the warehouse to maximise efficiency. These inventory control systems include: 

Stock locator database 

This type of inventory control system allows for proactive decision making. This tool will enable you to create a state-of-the-art space management system by running and maintaining records related to stock numbers, lot number, and the number of loads in each storage location. Grid coordinates of the reserve area, including individual rack tier positions, must be established and the load capacity of all storage locations needs to be incorporated into the database. 

Grid coordinating numbering system
 

A warehouse numbering system needs to be developed in conjunction with the storage layout and should be user-friendly to ensure that workers can quickly locate currently stocked items. 

Communication systems 

These are a valuable investment for larger warehouses. These systems use technology to enhance efficiency and have made it possible for the warehouse computer system to interact with terminal display on the machinery itself. Task assignment can, therefore, be made by visual display or print-out, and task completion can be confirmed by scanning, keyboard entry, or voice recognition. 

Maximisation of storage capacity 

This type of inventory control system looks at maximising the use of storage space with the aims of easing traffic congestion and reducing problems associated with the ongoing turnover of inventory.

Periodic Inventory system
 

This is a form of inventory valuation where the inventory account is updated at the end of an accounting period rather than after a sale and purchase. This allows businesses to track inventory turnover at the beginning and end of an accounting period.

Perpetual Inventory 

The perpetual system keeps track of inventory balances continuously, with updates made automatically whenever a product is received or sold.

Objectives of Inventory Control Systems

Objectives of Inventory Control Systems

All types of Inventory Control systems aim to maximise profits with minimum investment and without impacting customer service levels. These systems provide better visibility and lower operating costs by ensuring:

Better organisation

Save on operational costs by enhancing inventory control processes. These systems maximise the use of resources which include raw materials, finished products, equipment, space, time and people.

Increase productivity and accuracy

By implementing different types of inventory control systems, you are able to reduce error rates and increase inventory accuracy, which will enhance your overall ROI. 

Effective decision making 

Through the implementation of inventory control systems, you will gain insight into possible problem areas and be able to fix them before they become more costly to the business. 

Enhanced visibility 

Increase transparency into stock, quality, labour utilisation and what is happening in terms of inventory processes in the warehouse. This will provide you with the necessary information and insight to manage these processes effectively. 

Effective quality control 

Through inventory control systems, you can locate and track stock and monitor the quality of the stock going in and out of the warehouse.

Conclusion

Different types of Inventory control systems are essential to the effective transport and distribution of oil and gas in both small businesses and large organisations. There are several types of inventory control systems that can be implemented to assist in managing inventory levels and warehousing processes that will ultimately make your business more efficient and agile. Ensure that you are adopting the right inventory control software solution for your business by contacting Adapt IT Energy, leaders in the field of software solutions in the oil and gas industry. Let Adapt IT Energy assist in optimising your downstream supply chain with an inventory management software solution that suits your business needs. 

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