Minding the gap between the front and back offices: A systemic analysis of the offshore oil and gas upstream supply chain for framing digital transformation

Abstract

The offshore oil and gas upstream supply chain operations are part of a complex system with many stakeholders and intricate relationships. Traditionally, these operations are managed manually, which leads to inefficiencies. Despite the innovative and engineering-orientated approaches adopted in other technical operations of the industry, the supply chain activities remain unchanged, relying heavily on legacy systems. However, cutting-edge technology opportunities are available for adoption in supply chain management systems in the oil and gas industry. Such a transformative upgrade relies on first understanding the operational inefficiencies and preparing an accurate picture for how these operations should be performed. This study adopts a systemic approach to examine the oil and gas offshore supply chain operations of a case company to identify areas for improvement. The objective is to address the following research questions: (1) what is the current “AS-IS” supply chain operations support; and (2) what is the desired “TO-BE” state for these operations. This research adopts a soft systems lenses applied in an action research project to capture and analyze existing operations. The research revealed that information exchange is a major barrier, and that technology and organizational gaps are the primary hindrance for a digital transformation. The conclusion is that there is a need for a higher level of data exchange and increased data quality in any proposed transformation.