Supply Chain Comparison: Oil vs. Gas

This report compares and contrasts the supply chains of petroleum products and natural gas, focusing on British Petroleum (BP). It details the stages involved in each, highlighting differences such as the re-gasification process for natural gas versus the exploration, production, refining, and marketing stages for petroleum products. The report analyzes the UK market for petroleum products, noting its high demand and competitive nature. Finally, it examines BP's role in its supply chain, emphasizing its contributions to customer service, bottom-line improvement, efficient product delivery, and risk mitigation. The report concludes that while both supply chains share similarities in their management and operational goals, significant differences exist due to the distinct characteristics of the products and their respective markets.

DIFFERENCES BETWEEN
THE SUPPLY CHAIN OF
PETROLEUM PRODUCTS
AND NATURAL GAS

INTRODUCTION
In order to supply the petroleum products, company use process in which they adopt
some stages such as exploration, production, refining, marketing and then it delivers to
customers (Crandall, Parnell and Spillan, 2013). As compare to this, in natural gas supplying
company has requires re gasification, in which they transform liquefied natural gas through
vaporization and preparing it for use. Present report is based on British Petroleum which is
multinational oil and gas company which has headquartered exist in London. It is public limited
company which operate functions in various part of the world. In this report covers differences
between supply chain of petroleum products and natural gas. Furthermore, it covers role of
supply chain of cited firm company for the products.
1.
Comparison of supply chain of petroleum products and natural gas
Compare
British petroleum company dealing in many oils and gas products which they offer in
different areas of world. There crude oil supply chain consist steps in which first step is
demonstrate production of oil. At the time of production, crude oil is produced in both area such
as land and sea (Drake and Spinler, 2013). In oil production includes drilling, extraction and
recovery of oil from the underground place. In respect to considered short term storage serves
crude distribution in the whole supply chain. On the other hand, Natural gas consist Re-
gasification in which the company transforming liquefied natural gas into vapour so that they can
demonstrate it for using. With the help of increasing in crude oil consumption, cited firm can
planning through they can optimize entire supply chain within the enterprise (Härtl and Knoke,
2014). As compare to this, in supply chain of natural gas optimal distribution planning
considered transportation costs, taxes and duties for making best results. Within the cited firm,
organization can maintain their operations with consider various transaction at the workplace. In
this context, in petroleum products company need to make care for the place so that it cannot be
taken as problems towards the members. However, it can be also deliver effective results when
business can make positive operations with natural gas (McKinnon, Browne and Piecyk, eds.,
2015).
Contrast
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In both process company determine steps through they will consider entire supply chain
in effective manner. In addition to this, in both products British Petroleum identify resources
through they will make it very effective. The company ensures that produce products are not
harm to any person of entire country (Monczka, Handfield and Patterson, 2015). As results, they
are maintaining and maximize possible growing through committing in safety, environmentally
responsible operations with public and government. In the both process, chosen enterprise need
to encompasses raw material, work in process and finished goods in large amount so that they
can deliver it any time in different areas. In order to keep crude oil and natural gases are requires
many safety at the workplace so that it never harm to any member of the nation (Schaltegger and
Burritt, 2014).
From the above image, it can be seen supply chain of crude oil and natural gas. In this
aspect, company can deliver effective services with adopting best process. In this aspect,
organization will easily understand positive outcomes for attend the business objectives (Shaffer,
2013).
2.
Identify market of chosen product with seasonality and demand of the product
UK is developed country which highly use of petroleum products. As results, UK is the
best market to develop crude oil products. In respect to this, British petroleum can deliver
effective services in their products so that they can maintain their transaction effectively. In
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Illustration 1: Supply chain of crude oil and natural gas

addition to this, the cited country has strong infrastructure facility so that company will easily
maintain their transaction for developing products and services (Stead, 2015). The company has
effective transaction so that UK can easily develop market for deliver positive outcomes within
the enterprise.
Crude oil of British petroleum market consist fuels such as petrol, diesel, lubricants and
other industrial chemicals. In UK these products are more demanding in every season due to high
competition in various other enterprise (Vahdani, Tavakkoli-Moghaddam and Baboli, 2013). In
respect to this, oil is very important for scare resources and there are no alternatives available for
vehicle fuels such as petrol and diesel. Demand of these products is increase due to
OECD economies which make overall 66% total world demand. In addition to this, demand for
oil is also relatively inelastic with considered price for direct substitute.
Decreasing and increasing in crude oil price can be affect to petrol pumps due to existing
stock in there. Further, in UK retail market become increasingly competitive in recent time so
that it create more demand for increase operations (Crandall, Parnell and Spillan, 2013).
Supermarket chain consist such as Tesco and Sainsbury. British petroleum make contract with
the buyers on agreed minimum three months advance. The demand of products of crude oil can
increasing in UK by many activities such as investment, through replacing oil and make
continuation for achieve business goals. In the UK marketplace, there is highly requirements of
crude oil in every time whether it is winter or summer and any other season (The oil market,
2016). This is because, every time various business takes place for deliver effective services at
the workplace. As results, company will easily make their transaction for achieve their goals.
3.
Role of British petroleum in the supply chain of crude oil
In British Petroleum supply chain management play very significant role in the entire
process. Management of the transition process create manufacturing of petroleum products in
which company will deliver effective services which is the main key of success (Drake and
Spinler, 2013). It also helpful to achieve better results through smooth functioning of retail
organization. With the help of supply chain management British Petroleum easily make
customers satisfaction in entire process which make success for the company. Due to vital role in
crude oil business following role can be consider in supply chain of company:
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 Boosts customers services: With the help of supply chain, British Petroleum can make
successful operations which assist to deliver effective services at the workplace. In
respect to this, company will easily achieve high revenue through offer the best product
to customers (Vahdani, Tavakkoli-Moghaddam and Baboli, 2013). In addition to this,
company will easily make their objectives priorities which can be create planning of
products and services for organization performances. In this role, company play
important role through they will easily deliver effective services for making transaction
very systematic manner. As results, organization will able to develop their market in
different areas.
 Improvements bottom line: With the help of improving bottom line, cited firm can also
maintain their operations which enhance their bottom line (Crandall, Parnell and Spillan,
2013). In this aspect, supply chain managers decrease use of large fixed assets for
instance plants, warehouse and transportation vehicles within the supply chain
management. According to this role, supply chain of British Petroleum can increase cash
flow for receive profits of the company very quickly. As results, business will easily
expand new market operations through determining positive outcomes (McKinnon,
Browne and Piecyk, eds., 2015).
 Being an effective delivering of services and products: Another role of supply chain
management of British petroleum consist major role within the business environment, is
effective delivery of service and products. In respect to this, company will make their
transactions in effective manner through positive transaction. It will assist to cited firm
for delivery positive and effective services at the workplace (Härtl and Knoke, 2014). As
results, the company can boost their performances to attract potential customers. It also
assists to make loyalty of customers towards the business results.
 Protect the enterprise from risk element: Supply chain management consist small
activity through organization can maintain their operations for deliver positive results.
Hence, it will helpful to remove risk element from the workplace. British Petroleum can
make their operations in very systematic manner through firm will attract various
customers together (Vahdani, Tavakkoli-Moghaddam and Baboli, 2013). In addition to
this, it also creates positive results for deliver services according to customers
requirements.
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CONCLUSION
From the above report it can be concluded that, supply chain of natural gas is differ from
the crude oil. This is because, different resources take place for making both products. It will
assist to cited firm for day to day activities flow in which natural disasters create impact on
business operations. Furthermore, in both products different characteristics determines
comparison and contrast information. In this context, both adopt stages through company will
easily develop chosen enterprise marketplace. Moreover, report also demonstrate role of the
supply chain of cited firm. In aspect to this, company will boost services, towards the customers,
protect the enterprise from risk element and improvements in bottom line. Hence, it will help to
chosen enterprise to develop their functions in different areas easily.
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REFERENCES
Books and journals
Crandall, W. R., Parnell, J. A. and Spillan, J. E., 2013. Crisis management: Leading in the new
strategy landscape. SAGE Publications, Incorporated.
Drake, D. F. and Spinler, S., 2013. OM Forum-Sustainable Operations Management: An
Enduring Stream or a Passing Fancy?. Manufacturing & Service Operations
Management. 15(4). pp.689-700.
Härtl, F. and Knoke, T., 2014. The influence of the oil price on timber supply. Forest Policy and
Economics. 39. pp.32-42.
McKinnon, A., Browne, M. and Piecyk, M. eds., 2015. Green logistics: Improving the
environmental sustainability of logistics. Kogan Page Publishers.
Monczka, R. M., Handfield, R. B. and Patterson, J. L., 2015.Purchasing and supply chain
management. Cengage Learning.
Schaltegger, S. and Burritt, R., 2014. Measuring and managing sustainability performance of
supply chains: Review and sustainability supply chain management framework. Supply
Chain Management: An International Journal. 19(3). pp.232-241.
Shaffer, B., 2013. Natural gas supply stability and foreign policy. Energy Policy. 56. pp.114-
125.
Stead, J. G., 2015. Management for a small planet. ME Sharpe.
Vahdani, B., Tavakkoli-Moghaddam, R. and Baboli, A., 2013. Reliable design of a closed loop
supply chain network under uncertainty: An interval fuzzy possibilistic chance-
constrained model. Engineering Optimization. 45(6). pp.745-765.
Online
The oil market, 2016. [Online] Available through:
<http://www.economicsonline.co.uk/Competitive_markets/The_market_for_oil.html>.
[Accessed on 16th December 2016].
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