Tag Archives: COVID

From supply chain disruptions to fluctuating demand, the past few years have caused a ripple-like wave of challenges throughout businesses across the globe, including the oil and gas industry.

Fortunately, with oil prices bouncing back, the oil and gas industry has nearly recovered from the issues to pre-COVID operations. That being said, there are a considerable number of concerns on the forefront of the industry that will shape the course of operations for years to come.

So, what’s the state of the oil and gas industry today? Let’s look at some of the issues and opportunities they’re facing.

Production capacity concerns

For months, we’ve been seeing news reports about the Russia and Ukraine conflict. Many of us have been seeking updates on the conflict itself, but those in the oil and gas industry have no doubt kept a keen eye on how it is affecting the global oil and gas market.

The sanctions placed on Russian oil have caused strain on a U.S. refinery system that, like so many manufacturing industries, was already overwhelmed and under-staffed following the COVID pandemic and the Great Resignation that followed. Demand for gas plummeted during a time when the majority of the country stayed in their homes for months on end, which left a large number of refineries with no other choice but to close their doors.

Refinery numbers still have not yet rebounded, which has resulted in a refining shortage of roughly one million barrels of oil a day compared to pre-COVID numbers. Add in sanctioning one of the world’s biggest oil producers, and the increased demand coupled with reduced refining capabilities combines into the perfect storm for shortages and increased prices.

Mergers & acquisitions opportunities

Despite the recently tabled climate bill, this country (and the world at large) is moving toward a renewable energy future. Even if it’s at a snail’s pace.

This has caused leaders in the oil and gas industry to evaluate operations and find ways to meet renewable and decarbonization efforts in the next few decades. One option is partnering with or purchasing renewable energy companies.

Companies like BP, Equinor, Respol, and PKN Orlen are leading the charge in renewable energy investment opportunities, and are reaping the financial and ecological rewards of doing so. Expect many major players in the oil and gas industry to continue to expand their portfolios and increase their outreach with strategic mergers and acquisitions into renewable energy.

Appeasement of investors

Despite incredible year-over-year growth, the oil and gas industry as a whole has been plagued with cash flow issues that have caused investors to reconsider their financial plans.

There are a host of reasons why investors have turned their focus toward other industries in recent years: Some have been leaving due to increased concerns over carbon-mitigation and ecological issues, some have left due to oil and gas’s tendency to overspend cash flows in the name of company growth and continued investment, while others have been scared away due to plain uncertainty.

Whatever the case may be, oil and gas companies are seeking to attract investors again, while investors want to see predictability and consistent returns to shareholders. The aforementioned increase in renewable mergers and acquisitions opportunities is a step in the right direction for the oil and gas industry, and that coupled with an inevitable stabilization will no doubt cause investors to flock back to the industry.

Outdated infrastructure & opportunity for innovation

Across the board, oil and gas infrastructure is aging.

In the off-shore sector, oil platforms are becoming old, deteriorated and increasingly at-risk for operational failures and natural disasters. This, of course, poses a problem not only for oil and gas companies meeting the ever-growing demand of the marketplace, but also risks ecological disaster in the form of oil spills and other malfunctions. Equipment and structural deterioration is no doubt due to saltwater and other environmental factors that come with operating in the ocean, and improvements to such facilities come at great expense, leaving some executives to employ a “we’ll-fix-it-when-it’s-broken” approach.

On land, plants and refineries across the country are aging, too, with many having outdated control loops, absences of updating engineering controls, and lack of complete computerization. This, of course, doesn’t even touch on the efficiency potential that technological aspects like robotic automation, artificial intelligence and IoT advances could bring to these facilities.

We can help

No matter the challenges, issues or opportunities facing the oil and gas industry, one solution is getting the job done more efficiently. That means looking at supply issues in new ways, casting an eye toward structural improvements and ensuring your day-to-day efficiency in the refineries and out in the field. We can help with that. At USC Consulting, we’ve been working with companies in a wide range of industries to up their efficiency game for more than 50 years.

Contact us today if you’d like to talk about how we can help your business.

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As America dusts off and gets back to business as usual, what can the food and beverage industry expect to find on the road ahead for the latter half of 2021? While some 60% of manufacturers and processors, including F&B, report being impacted by the pandemic (we’d put that figure a lot higher, frankly), demand for products in many, if not all, sectors is beginning to surge. Roaring ’20s, here we come.

So, what does that mean for F&B? According to the 2021 Manufacturing Outlook Survey by Food Processing magazine, the industry is cautiously optimistic. Here are some quick takeaways from that survey:

• 58% of food manufacturers were very or somewhat optimistic about 2021.
• 41% plan to staff up while 44% will maintain current staffing levels.
• 41% plan to increase production and add lines or plants, while 35% will maintain current production levels.

All of that points to good news. Here at USC Consulting, we don’t exactly have a crystal ball, but we are seeing some other trends emerging for F&B as well. Let’s take a closer look.

Were supply chain disruptions a good thing?

OK, hear us out. Nobody is a fan of supply chain disruptions. The unprecedented level of disruption of the pandemic caused inordinate headaches, work stoppages and all kinds of other problems. But it also forced manufacturers of all stripes to focus on efficiency and agility, create new processes and procedures, find alternate routes on their supply chains and a host of other things. The key was finding ways to pivot quickly. Carrying forward some of those lessons learned can make your operations more efficient and leaner than before. Another way disruption might ultimately impact F&B is the trend toward more localized production. On the consumer side of the F&B industry, it’s been about farm-to-table for a while. It may slide into the manufacturing and processing side as well, with good reason. Global supply chains may remain unreliable for the near future.

Automation is here to stay.

Many F&B manufacturers and processors relied on automation on the line to get the job done with fewer people, due to layoffs and social distancing restrictions. All signs point to this trend being permanent. This is not replacing people with machines. It’s using technology to help people do their jobs on the line faster, more efficiently and with less repetitive injuries than before. Automation also creates new work and new ways to work. All of this is an acceleration of the Industry 4.0 revolution that started a few years back with the Internet of Things (IoT), and it’s about interconnectivity. A new term is coming into play: smart manufacturing.

Increases in process efficiency.

Making operations more efficient with the goal of increasing throughput for the long term is the core of our business. Every company out there wants to be more efficient, do more with the assets they have or do the same with less. Competing in the post-pandemic marketplace, when hiring is tight, low-end jobs remain unfilled, and demand is rising, means that being as lean and efficient as possible isn’t a nice-to-have anymore. It’s a vital necessity.

A heightened focus on forecasting and demand planning.

We recommend a process we call SIOP to get the clearest look at your operations now and down the road. It helps companies make better strategic decisions. The common version of this process is sales and operations planning. We think it misses a critical piece of the puzzle: inventory. Adding inventory into the mix is just one additional step, but we find it can be the key to the whole thing. When you’re focusing on inventory, it requires more careful planning and elevates the entire planning process up a notch. We like to tell our clients that the purpose of SIOP is making sure you’re having the right conversations about the right things at the right time. And getting what you need when you need it.

According to the survey, other issues on the minds of F&B manufacturers in 2021 include food safety, worker safety and cost control. Ultimately, it boils down to better, more efficient processes, and a leaner, more agile operation that increases throughput and cuts expenses.

At USC Consulting Group, we’ve been helping companies do just that for half a century. If you’re interested in talking with us about how to position your F&B operation for the future, contact us today.

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