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Top 5 Strategies to Optimize Costs for the Energy Supply Chain

10/20/2020 By

Complexity is rampant in energy sector supply chain processes, and this guide can help those experts respond to increased pressure from CFOs and CEOs to lower costs and streamline processes.

Digitalizing is one solution. Digitalizing doesn’t mean roads, factories, and power plants of the future will cease to exist as physical entities. But it does mean that our physical and digital infrastructures will become increasingly integrated, resulting in an improvement in economic, environmental and social outcomes across our fundamental systems.

This includes digitalizing the all-important energy sector. Each day you’re pushed a little further outside of your comfort zone and forced to rely on your ingenuity to solve complicated problems. Building end-to-end capabilities and solutions that ensure supply chain reliability, efficiency and innovation are at the center of everything you do. Now, more than ever, the ability to analyze cross-functional processes against existing systems is critical to make fast, intelligent value optimization decisions.

1. Rethink Automation

To unlock the value of digital technologies, you need to identify a starting point. If you’re in the embryonic phase of digital maturity, your objectives will differ from a company further along in their digital journey.

Simply adding analytics, AI, machine learning and RPA to your supply chain planning strategy isn’t in itself the pathway to successful digitization. The key to success is defining what automation means to you. For some supply chain leaders, it’s moving off spreadsheets and reducing routine manual processes — for others — it’s using machine learning to enhance demand forecasting through more accurate predictive insights.

Whatever your goals and maturity, it’s critical to think about automation through the lens of cost optimization. When done right, automation can help you make smarter resource decisions, better align decision making across your organization, and enable you and your teams to focus more on higher value-added activities.

2. Consolidate Security for Energy Supply Chain

Energy supply chain leaders recognize connected technologies’ benefits. However, for the third time ever, Interpol issued a security warning of a significant rise in cybercriminal activity. The vast majority of these cyber-attacks targeted healthcare and manufacturing ecosystems, specifically industrial targets during the pandemic.

Many devices already make automated orders and status checks, so security is more important than ever. Energy companies must ensure that all safety and regulatory requirement protocols are followed. The mass adoption of remote and mobile work environments during the pandemic has increased security vulnerabilities, making it especially critical to consolidate access management and security roles to ensure your data, people and systems are safe from cybercriminal activities. Centralizing access can help you reduce costs and gain more visibility over who is accessing what, when and on which device.

3. Gain More Control — A Customer and Asset-centric Approach

Do more than survive — thrive in the new normal by anticipating changes in demand, materials, capacity and resources to fulfill growing customer expectations in a digital-first world. With refineries and operations all over the world, building key partnerships and networks at every link of the global supply chain are critical to minimizing disruptions. Otherwise, you risk damaging your reputation, the environment and corporate credibility. By having a customer and asset-centric approach, supply chains will know where wells, pipes, cables and power stations are, which are fully functional, and which require maintenance or parts. This information will be vital moving forward.

4. Get Integrated — Without Throwing Away Your Legacy Systems

You’re only as good as your connections. The same applies to your complex global supply chains. Integration across your supply chains is essential for a near- single-pane-glass view of every link in your value chain. Things go wrong, and as a supply chain management director, you know firsthand how critical it is to know where things are at any given moment.

Consumer and partner engagement is the holy grail to sustainable growth. Interoperability, CRM, better customer experiences, hubs and APIs to unify everything creates seamless interactions between companies, its assets and consumers. Through the lens of value optimization, consolidating redundant stacks and gaining more value by connecting disparate data and systems can save you money in the near-term while giving you the flexibility to grow and scale in the future.

API-led connectivity and integration solution can simplify and speed up vendor onboarding and management. In many cases, getting a new vendor on board can take weeks, even months. With integration platforms, you can get vendors integrated into your network faster and smoother. Reduce the time it takes to adjust vendor configurations.

Changes in industry standards and regulations are continually evolving, but consumers want their needs fulfilled quickly. Integration platforms make it easier for IT to adapt to a changing supply chain and energy production landscape. Mitigate risks and costs by upgrading legacy solutions that are often two to three decades old. Like with most technologies, there’s a point where holding onto legacy systems is no longer an option, and custom patchwork solutions end up creating a spaghetti bowl of code.

5. Tap into Next-Gen Tech

5G networks are here, and IoT devices are already in the market. You’re faced with the simple reality of getting things from point A to B, making sure materials are moving efficiently from where they are to where they need to be. The right software and supply chain strategy can help you optimize costs by gaining more visibility and control over capacity crunches, resource disruptions and sudden spikes in manufacturing.

Greater visibility can help you enhance your negotiation capabilities and do more with less. With CFOs and CEOs demanding you to do everything as efficiently as possible to get the most competitive prices, you’ll need to rethink your strategy. To succeed in today’s digital-first world, you’ll need infrastructure and software solutions that enable you to reach out to a broad partner network and make smarter decisions about inbound shipments, human resources and capacity fluctuations with data-backed confidence.

Interested in more by Melissa Beuc? Read “5 Insights for Energy Companies to Power Connected Commerce.

Melissa Beuc is Appirio’s Global Strategic Marketing Director for Manufacturing, Energy and Banking. Reach her at or on Twitter: @MelissaBeuc.

About Appirio — Appirio, a Wipro company, is a global Salesforce integrator. We are end-to-end experts for every phase of a digital transformation. Our mission is to support companies in their quest to provide world-class products and services to their customers. By rapidly delivering digital transformation projects and unlocking data, Appirio helps companies make better, faster decisions.