Global Supply Chain Strategies for British Petroleum and Marks & Spencer

GLOBAL SUPPLY CHAIN 1
GLOBAL SUPPLY CHAIN AND PROJECT MANAGEMENT
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GLOBAL SUPPLY CHAIN 2
Executive Summary
The success of a company depends on the effectiveness of supply chain strategies. A
supply chain is made up of different elements which must work together for the effective
movement of a product. The customer is normally the start and the end of a supply chain. In
the global economy, oil and gas are seen as a critical products in ensuring economic growth
(Evangelista,2002). The oil and gas industry is responsible for supplying various products to
some industries such as transport and many others. However, these industries are further
exposed to some risks specifically from the supply side such as oil spills and fires. The oil
spill that occurred in Mexican Gulf is one of the worst in history. The project focuses on
various supply chain strategies used by British Petroleum (Evangelista,2002). On the other
hand, M&S uses different supply chain strategies for various products. M&S is able to
manage their supply chain based on the origin of the product and customer
requirements .Moreover, company logistics policy normally depends on the product origin.
Introduction
The report is about supply chain strategies for British petroleum and Marks &
Spencer companies. One is a global company while the other is a retail company. British
Petroleum is rated as the third popular oil and Gas Company globally. The organization was
started in 1909. However in recent years the organization has merged with Amoco thus
becoming BP Amoco Plc. The organisation majors in excavating some downstream product .
The company is known of producing 4 million barrels of crude oil each day. It also operates
in more than 80 countries globally Biello, (2010).The company happens to have the largest
market share in the United States.

GLOBAL SUPPLY CHAIN 3
On the other hand Marks and Spencer is a leading retail company in the United
Kingdom which is thought to have more than 21 million customers buying from their store
every week. The company majors in selling home products, quality clothes, and food at an
affordable price. The retailers have around 665 stores across the United Kingdom. They also
have 291 franchised stores in 40 countries globally. These factors made the company become
the largest footwear and clothing retailer in the United Kingdom.
Supply chain strategies for British Petroleum
British petroleum supply chain is characterized by three elements which are
inflexibility, complexity and uncertainties. The oil and gas supply chain is associated with
inflexibility and has many variables. Thus oil companies have vertically integrated supply
chain. Crude oil has to move from where it is being produced to the refineries. This long
distance brings about a long lead time. On the other hand, production is done in some
countries, while the finished product is demanded everywhere in the world. The refining
process is also very complex where a lot of capital must be invested. The refined products are
distributed by use of water, air, and pipelines. This supply chain is based on a certain
traditional model which is demonstrated by some stages in the supply chain, the supply chain
for this company is divided into two activities which are upstream and the downstream.

GLOBAL SUPPLY CHAIN 4
Figure 1: British petroleum supply chain (Burns, 2013)
The diagram above is the supply chain of British Petroleum Company. BP has a
vertically integrated supply chain. The company carries out all the activities involved in the
oil and gas supply chain. The supply chain activities include the extraction and exploration of
crude oil and gas, transportation and trade of oil and gas, manufacturing stage which involves
refining of petrochemicals, lubricants, and lastly is the sales and marketing of the oil and gas.
The sales and marketing activities include selling petrol to about 18000 service stations
internationally. The first two stages in the supply chain are categorized as upstream while the
last two steps are categorized as downstream we also have the midstream activities as shown
from the diagram below