Supply-chain management in the oil industry

Abstract

The logistics network in the oil industry is highly inflexible, which arises from the production capabilities of crude oil suppliers, long transportation lead times, and the limitations of modes of transportation and energy planning and management. The paper considers the key factors for reducing costs and increasing the company’s profits in managing supply chains: demand management, efficient distribution of petroleum products among customers, better transportation scheduling, warehouse management, and quality and timeliness of information through the automation of the supply chain. And this principle is carried out within the framework of the logistics concept of supply chain coordination - Supply Chain Management. The paper also considers advantages from implementation of supply-chain management. Implementation of supply-chain management in the oil industry can help to reduce costs, increase the company’s profits in managing supply, and manage the planning of deliveries.