Andrew Bruce (DataGumbo) contrasted the siloed ERPs of the ‘traditional economy’ with the new world of the ‘commercial internet’. Here participants share immutable records and enact frictionless transactions, all enabled by … blockchain. ‘Just as web browsers turned TCP/IP into the internet, blockchain creates the commercial internet, connecting companies with smart contracts’.
Badruddin Pitter (MDxBlocks) describes blockchain as an opportunity to share information about vendor, customer and product in order to achieve transparency, traceability and identity across the supply chain. MDxBlocks’ TotalRecall is an end-to-end blockchain solution that currently tracks perishable goods from producer to retailer.
Weatherford’s Melissa Bohannon showed how compliance can be enhanced through supply chain digitization. Trade compliance needs logistics, procurement and sourcing data to support duty saving programs. Free trade agreements are an opportunity to reduce costs by avoiding duties, but they are extremely difficult to manage because of the lack of consistent information and processes throughout the supply chain. Often data must be manually keyed-in by freight forwarders and customs brokers because basic electronic data sharing has been overlooked. ‘We cannot reach a true digitalized state without eliminating manual data entry’. Weatherford has over a million items in its ERP inventory. Recently, companies have suffered from punitive tariffs on imported steel, aluminum and Chinese goods. Such changes can disrupt businesses. Unfortunately, current ERP systems were not designed to manage trade compliance and are not flexible or nimble to adapt to the changing environment. The world of sanctions has shifted from multi-lateral agreements to those that are issued by individual governments targeting a particular industry, or even individuals. International operators need to be able to block transactions with named parties and entities in which they have majority ownership or control. Sometimes the same transaction can be legal if it originates from a different country! Such considerations are hard to managed in ERP systems. Digitalization has to include not only ERPs inventory, asset management, procurement, sourcing and manufacturing needs but trade compliance needs as well.
Nigel Bell provided an overview of Hess’ ‘360’ supply chain management system. Hess currently has some 4,000 suppliers. This needs to change. Hess is to consolidate with fewer suppliers, deeper relationships with integrated/democratized data and ‘longer, stronger’ contracts. Today, suppliers operate with varying levels of data integration with Hess and collaboration across the supply chain is hampered with data siloes and many disparate systems. Hess 360 sets out to change this and bring visibility and collaboration to the value chain, generating insight into supplier performance gaps, suggesting countermeasures and pinpointing areas of inefficiency and waste. Hess 360 components include SAP, WellView, Synergi, QEMS (Quality Data), ISN (Safety Assurance Data), Ariba (Contract Info) and an in-house Opportunity Register for innovation. Hess 360 has enabled provides the workforce with agile, modern tools. An ecosystem of partners has enabled collaboration and integration beyond the enterprise firewall.
Raquel Clement (Chevron) introduced the Energy Conference Networks-hosted US Oil & Gas Blockchain Forum that kicked off in February 2018. Blockchain ‘has the potential to transform how we work’ with a more seamless way of working and a central source of truth where business activities can be self-executed and recorded in real time. A more formal US Oil & Gas Blockchain Consortium was founded in January 2019. More from the Forum.
Robert Ratchinsky (Engage Mobilize) claimed that a mid-sized independent E&P can do up to a million transactions on paper per year with hundreds of service providers. ‘Billions are spent in the dark’. Today, incredibly, ‘most transactions are completed using a simple carbon copy hand written approach’. The subsequent task of data input costs companies billions industry-wide. Enter Engage Mobilize’s ‘next gen’ digital transaction platform. This tracks multiple oil country services types and leverages geofencing technology to enhance security and transparency. The Engage API allows for integration with databases and ERP systems. Engage works off the cellular service and is used in five US States by ‘two of the top 10 domestic producers’. Today, 106 service types are being tracked and ticketed on the platform.
Tim Clem presented a similar digital supply chain solution from GEP. SMART by GEP claims to be the ‘world’s first’ cloud-native, source-to-pay software that delivers comprehensive spend, sourcing and procurement functionality in a single, unified platform for direct and indirect spend management, from sourcing to payments and from spend analysis to savings tracking.
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