Supply Chain Management Assignment Management Essay Contents Chapter 4: Results and Discussio

Dissertation

Contents
Chapter 4: Results and Discussion..................................................................................................1
4.1: The major issues with relation to SCM in LNG projects in Mozambique...........................1
4.2: Absence of government support for LNG projects in Mozambique....................................3
4.3: Part of trade cartels for LNG projects..................................................................................5
4.4: A member of trade unions or groups for oil and gas industry..............................................5
4.5: Safety policies adopted while transporting or distribution of oil and gas............................6
4.6: Infrastructure development and support from government is benefit for the business........9
4.7: Anticipated that there is an increase in demand for LNG in Mozambique........................11
4.8: Existing infrastructure sufficient for LNG projects in the future.......................................12
4.9 Limitations...........................................................................................................................13
4.10 EVALUATION OF THE STUDY....................................................................................14
Chapter 5: Conclusions and Recommendations............................................................................16
Bibliography..................................................................................................................................19
Appendix 1.....................................................................................................................................21

Chapter 4: Results and Discussion
The supply chain forms a very important element in case of oil and gas firms as it
provides the firm with a viable competitive advantage. In case of the supply chain being further
strengthened, it helps to form better sales and this enables the inclusion of retail outlets, where in
another level has been added into the distribution and supply chain is of great benefit. Primary
Research that was conducted along with several stakeholders in oil and gas industry in
Mozambique, reveals that there are several or different type of issues that are faced by people.
However, there are both positive and negative impact on social and economic conditions.
It is essential that the government works towards building better solutions for oil and gas
supply in Mozambique to create a stronger impact on economic growth. An in depth research
was carried out using a questionnaire and the following results were obtained. Interview were
conducted from stakeholders as they have proper knowledge about the research topic selected.
The following are the results of the discussion and interview conducted among
stakeholders of LNG projects and managers in LNG projects. It forms an important element of
providing an idea about the present conditions in LNG projects as well as the supply chain
involved. This will enable to come up with an appropriate outcome for the research so that the
issues faced can be solved.
4.1: The major issues with relation to SCM in LNG projects in Mozambique
In accordance with the discussion make with SCM managers and stakeholders involved
in LNG projects in Mozambique indicates, there are different type of issues relating to supply
chain which require immediate attention. It indicates that infrastructure is just one of the many
issues that they are facing in terms of managing the SCM in LNG projects. It is important to
develop an understanding of the practical issues faced by the system which include lack of liquid
cash and problems in communicating during distribution of LNG. It is essential to resolve three
main issue while managing LNG projects which include the following:
1. Infrastructure issues
2. Communication issues
3. Financial and liquidity issues
These can be determined to be the main cause due to which very few LNG projects being
carried out in Mozambique as well as the whole of Africa, in spite of there being abundance of
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oil resources. It is important that these issues be resolved so that there is better economic growth
that can be achieved.
In accordance with the above given figure, it can be stated that the rate of project related
with LNG are increasing. This has a positive impact over the employment. When the project rate
increases, then the number of people who are involved in the sale are also increasing, more and
more employment opportunities are attained by people.
As the number of transactions that has taken place is huge and several stores have to be
managed, where in combined inventory order decisions have to be taken, either the whole system
can be integrated or autonomy can be granted to each of the units.
It requires to have proper handling of goods, ensuring that the choice of transportation,
which in case of locomotives might be air or sea, is chosen to be able to gain cost effectiveness.
As these investments or overheads are huge and form a portion of the total costs as well as
impact the pricing of the final product, it becomes very important to choose the most cost
effective and safe method of transporting the goods in order to facilitate a competitive advantage.
This can help the firm be able to gain market leadership based on its competitive pricing and also
form a competitively forwards position.
It is also important to create strategy for effective importing and thus form a strategic
advantage as well as competency. In this way, it is possible for a mining firm to procure
machinery and locomotives of superior quality as well as effective prices form the Asia Pacific
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regions. The distance of the country form where it has to be called for, their foreign currency and
exchange valuations, political conditions and laws regarding export have to be considered before
deciding form where the locomotives should be procured. In accordance with the objectives, it
can be stated that are high negative impact on LNG projects.
The importance of logistics and supply chain cannot be denied in the present world of
extreme competition. In case of modern businesses, it is very common for them to carry out
international transactions and globalization has made this a very important competitive
advantage for a business. The present day businesses carry out international transactions as a part
of their strategies to rationalize costs. It is important for them to avail raw material, machinery
and even labour and capital from the most cost effective sources, even if they are located in other
countries and other continents. Only then it would benefit the economy of Mozambique in an
effective manner. This can help build better levels of development in Mozambique.
This way, it can be stated that, business that is operated by the firm to visits its suppliers
and forms a strategic plan which can help them obtain better levels of control and competencies.
Efficient supply chain managers would ensure effective planning by accommodating for all
possibilities and anticipated contingencies. It might or might not be possible for accommodating
too much of time as a margin for “just-in-case” contingencies as the pressure on the supply chain
is generally high. It is recommended that the firm uses this effectively. It is important for a
business to be able to create resourcefulness and manage its supply chain in an organization or an
industry. Only then it enables building of better economic functioning and LNG industry growth
in the long term.
4.2: Absence of government support for LNG projects in Mozambique
The managers and stakeholders that were interviewed mentioned that there is lack of
thorough support from the government for LNG projects. Moreover, there is high competition
among LNG companies at a global level. Lack of government support leads to further difficulty
for firms managing LNG projects as the infrastructure and technology available is not adequate.
Pricing in the oil segment is extremely volatile as it is based on several factors. Oil being an
internationally traded commodity, its prices is constantly changing. This has a great impact on
the global economy. It is very important to ensure that investors hedge themselves against this
volatility in order to be able to gain from their investments in the oil sector. In this way oil
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producers and major oil consumers seek to achieve safety and protection as well as risk
mitigation for their investments.
Coordinating and managing the complete process in a profitable manner is very difficult
and challenging a task. It requires the effective management of the process and usage of several
cost controls in order to sustain the profitability of the supply chain and make it an important as
well as sustainable element of the value chain. Competitive advantage refers to the advantage
achieved by a firm due to its resources or competencies over and above its competitors and other
players in the industry. Competitive advantage is usually a sustainable advantage that can help
provide a firm with an upper hand in terms of performance as well as satisfying customers in a
profitable manner. It might be in the form of an established brand reputation or also in the form
of capital and human resource that a firm possesses and its competitors do not.
It is quite evident that there is lack of support from the government as the oil and gas
industry expands. It becomes important to build a long term plan which can help facilitate
sufficient growth among various LNG firms and help accelerate economic growth. The cost
factor is an extremely important element that has to be considered. The supply chain is made up
of several intermediaries, which includes manufacturers, wholesalers, distributors and retailers,
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