Supply Chain Professionals Need to Be Transformational Chang

Evelyn McLean-Quick’s long and diverse career in oil and gas – including a decade in fabrication and construction in northern Scotland, then later in a role interfacing with a procurement team -- has made her an advocate of going to gemba, a Lean methodology term that means ‘go see for yourself’, or go to where the work gets done. Going to the site of where work gets done is the best way to get new ideas to make oil and gas supply chains more efficient, said McLean-Quick, VP of strategic sourcing for global supply chain at Hess Corp,. during a Dec. 1 presentation at the Energy Conference Network’s Oil and Gas Supply Chain Conference in Houston.

Her experience working across all business segments of oil and gas supply chain, including exploration, drilling, production and decommissioning, has taken her all over the world, and allowed her to view the industry through the lens of a service company and an operator, said McLean-Quick. She has found that the supply chain challenges of service companies and operators are not that different. Today, she finds herself using lessons learned to lead teams through opportunity, change and challenge. “Through the years, I’ve seen supply chain evolve as a function and a profession,” said McLean-Quick. “One minute, supply chains are asset-based and decentralized; the next, it’s centralized. At times, oil and gas has invested in developing supply chain talent, and at other times has cut back. I’ve seen commitment to SRM [supplier relationship management], and collaboration does get air time now and again, which is more pronounced during a downcycle or after a major event.”

Supply chain professionals have lived through the dot.coms, the strategic sourcing eras, e-commerce in various forms, ERP transformation, and through anti-bribery and corruption due diligence, just to mention a few trends. Change is a constant in the segment; McLean-Quick wonders if some change has happened too hastily before the benefits of the previous change have been realized. “Based on my experience, to get a seat at table, we need to become a recognized business partner that delivers on a sustained basis,” said McLean-Quick. “We also need to adopt the language of business, since the supply chain speak can be divisive.” Over the years, McLean-Quick has come to the conclusion that senior supply chain professionals need to be transformational change agents to meet the challenges of the business today. She can see the role further evolving to one of a supply chain entrepreneurship – one that is nimble and focused on solutions for tomorrow – to prepare the oil and gas industry for recovery. The essence of supply chain’s evolving role is the harnessing of Big Data to enhance safety and productivity against the backdrop of supplier collaboration and accountability, said McLean-Quick. How industry interfaces externally in market has a direct bearing on how the industry and companies are perceived. Supply chain providers need to look at their training plans and determine if the curricula is sufficient not only today, but to meet the needs of the complex network of stakeholders that is becoming common.

One of the greatest mistakes that supply chain professionals make again and again – particularly in a downturn – is the quest for the first cost result without taking the big picture into consideration. While the task would be complicated, the oil and gas supply chain industry needs to build models that cater to total cost. “Something cheap may have a short shelf life. In contrast, high costs of premium goods and services aren’t always justified,” said McLean-Quick. “The big brand name isn’t always better.” Another challenge she sees is the tension between building an organization around categories and valuing importance of integration. McLean-Quick, who spent a good deal of time in drilling, said that well represents a supply chain in itself with multiple categories – from drilling to cementing to logging – that could involve multiple teams within an organization. Therefore, it’s important to select leaders with capabilities of driving integration and alignment. “Unconventionals drive a high volume of activity, while deepwater is a longer wavelength,” said McLean-Quick. “Our strategies meet the needs of both.” McLean-Quick believes that co-creation of strategies between business divisions and supply chains and as much cross-functional collaboration are needed to not only bring the best ideas to the surface, but deepens pride and ownership. Supplier relations are also critical, not only in current downturn, but always. Hess was very thoughtful in its approach earlier this year when it began looking to drive down costs, McLean-Quick said. The company started with a meeting of the minds led by Hess COO Greg Hill, and adopted the LEAN management approach, which involves standard work, balanced metrics and the concept of an army of problems solvers. That army of problem solvers should not be restricted to inside a company. “We are encouraged by the commitment of our supply partners to find new ways of collaborating to identify win-win solutions that have sustainable benefits.” The industry has typically taken a more draconian approach to efficiency, demanding deep across the board cost cuts. “There’s really no telling what kind of impact that will have when things recover,” said McLean-Quick.

Over the past several months, Hess has worked on its 2016 plans with the assumption that low oil prices will continues. “As supply chain professionals, we shouldn’t be afraid to test long-held practices and ask ourselves difficult questions – ‘How aligned is our contract language with our strategies, and the strategies we need tomorrow? Do global agreements work? How effective are we at brokering new relations? Which KPIs [key performance indicators] matter? What type of talent should we be investing in?’” McLean-Quick believes passionately that the most successful supply chain organizations employ strong business minded leaders with the ability to influence without authority – leaders who are can remain open to ideas while remaining outcome focused – and broker creativity, trust, accountability and transparency.

In today’s digital age of Big Data and Internet of Things technology, oil and gas supply chain professionals need to “create space for the art of the possible”, a move that will require professionals to become more visionary and look for ways to drive efficiency and performance without compromising safety. “Without the soft skills, the trust won’t come, and without the trust, collaboration will remain a distant dream,” said McLean-Quick. McLean-Quick also outlined questions that supply chain professionals should ask themselves to gain the trust of leadership, such as how vision, plans and priorities are conceived; whether you’re a good leader; whether enough time is allotted for relationship building; whether a company is a learning organization; whether the right talent is available; what dividend your investment is paying, and is anyone thinking about the recovery of the oil and gas industry, and the risks and opportunities this presents. She concluded that oil and gas supply chain professionals can be more visionary as they drive efficiency and performance in the current low oil price environment. “We have a unique opportunity to lead industry from the front. Let’s seize it and shine.” 

Posted on Friday Dec 11