blog updated on April 5th, 2024
Being a supplier in the oil and gas business is hard. You must ride the cycle of boom and bust, differentiate yourself in an incredibly competitive market and make sure your financial fundamentals are sound. It’s not for the faint of heart, and there is no guarantee of success. More than half the suppliers that have transacted on the Enverus OpenInvoice network over the past 20 years are no longer in business.
Gain a competitive edge
So, suppliers need an edge. Something that can make an instant impact on operational efficiencies. Digitalization is a hot topic among organizations looking to cut costs and better prepare for future uncertainties in the market. And there certainly are opportunities if you can determine the right solution for your business. One area of focus for an increasing number of suppliers is the supply chain. As obtaining access to commodities such as steel and sand becomes more challenging, supporting the procurement process — from order to fulfillment — becomes more important. Ensuring the terms of negotiated contracts are leveraged becomes more critical as margins tighten. Supply chain efficiency has moved from being a luxury to a necessity, as it is now one of the levers that can be used to drive down costs and increase profitability.
A complete digital process
Enverus’ supply chain solution for suppliers supports the end-to-end order placement, receipt, invoicing and the fulfilment process. Leveraging a network of more than 40,000 active vendors, companies can completely digitalize a process that is typically manually intensive and unintegrated. Oilfield service companies can generate purchase orders or service orders that are supported by negotiated pricing, validate them against goods receipts or work tickets, then automatically approve invoices knowing that scope, quantity and pricing have all been digitally validated.
This provides oil and gas suppliers with immediate direct benefits. Time and effort spent managing invoices is reduced. Negotiated pricing is validated. Suppliers are notified of orders, short shipments are tracked, the status of any order at any time can be determined. As the company’s business grows, there is no longer a need to grow support staff with it. And monthly/quarterly forecasting and reporting are easier and far more accurate.
We went from processing invoices in weeks to real time. The ambiguity of payment status is now nonexistent, as vendors can now log in to the platform and track the approval status effortlessly. This transformation has not only streamlined our processes but also strengthened our relationships with vendors.
Tina Royal | Assistant Corporate Controller
This provides oil and gas suppliers with immediate direct benefits. Time and effort spent managing invoices is reduced. Negotiated pricing is validated. Suppliers are notified of orders, short shipments are tracked, the status of any order at any time can be determined. As the company’s business grows, there is no longer a need to grow support staff with it. And monthly/quarterly forecasting and reporting are easier and far more accurate.
Become an industry innovator
Many oilfield service companies have adopted the Enverus solution, the same technology their customers have been using for more than 20 years. Drilling contractors, OCTG suppliers, drilling fluids companies, chemical providers and others utilize the system. Operators and suppliers share virtually the same supply chain. Companies that have been transacting on the network for years for operators can do the same for suppliers.
So, as you look at ways to cut costs and make your processes more efficient, consider digitalization of the supply chain. It makes sense, it’s proven, and it can be implemented tomorrow.
