Demand Planning in Oil Field Services sector
Well, this blog of mine is focused on demand planning issues and solutions in the oil field services (OFS) industry segment. For those of you, who are new to this sector (just like me), Oil field services companies are a critical component in Oil & Gas value chain. These companies provide products and services to the oil and gas producing companies (also known as operators) in the upstream processes such as drilling, formation evaluation, completion and production of wells etc.
As you can understand, they depend heavily on the operators for their business and therefore, their growth is driven by how fast the Oil & Gas industry is growing. All of us know the typical external pressures that the operators face – oil prices, recession, credit crisis etc, that directly impact their business performance, and hence their capability to continue production. Oil field services companies, although they are big in size, but still largely depend on operator’s spending ability to produce oil and gas.
I am currently working on an assignment that is about demand planning issues that the OFS players face and how do they mitigate some of these challenges - such as how can they improve forecasting processes, manage inventory, reduce mismatch in inventory across sites etc. How mature are these players in demand planning space? I want to know at what level is the demand forecasting done. How is the forecast arrived at? How is the product demand (tools and equipments) derived assuming it is make to stock and assemble to order scenario? I know, most of these companies run heavily on ERPs such as SAP and Oracle, but what are the typical planning tools they use?
I know, they sell jobs and services, which would be a product + services wrapped around it and there is a significant amount of variation of what these jobs constitute across regions… for example, the same kind of job would constitute very different set of tools and equipments, if it has to be deployed in two different regions – for example say mexico and north sea. So there are lot of such industry specific nuances that are very relevant while designing a demand planning process.
Looking for point of views from folks who have worked in this sector and can provide me relevant pointers. Please feel free to comment anything, and I would really appreciate if you can share your experience. I would be more than happy to discuss one on one over a telephonic conversation, so please do respond, if you think you know what I am asking for ….