Well... it's that time again to check a few key Oil & Gas cost drivers against WTI variance.
Please do not be surprised by the broken record: once again, the Oil & Gas companies margins are being squeezed, probably hoping that WTI would continue its push over $60/barrel, and not paying necessary attention to their supply chain cost...
Quick friendly reminder just in case: hope is not a strategy!
As you can see in attached comparative chart, I always select a few key cost drivers, and compare them with WTI. This time, hot rolled steel and steel rod in North America, and the usual average weekly earnings of production and non-production employees in Oil & Gas (BLS). While WTI dropped significantly over past 90 days, guess what...? All selected cost drivers did not. BY FAR!
As a result, expect more layoffs...! Classic Oil & Gas advanced strategic thinking to manage a P&L....
I don't know about you, but it does not seem like Oil & Gas companies are embracing lean, six sigma, strategic sourcing & sustainable category management principles on supply chain expenses and Capex! Anybody surprised...?
Well, just an other day in Oil & Gas... Maybe implementation of AI, ML, IoT, RPAs and block chain will bring some change in a definitely supply chain challenged industry...?