Oil and Gas Logistics Impact
Chapter 1: Introduction
1.1 Background
The importance of oil and gas industry has been enhanced on significant in modern businesses because this industry controls the flow of energy, and it has influential role in the global economy. The oil and gas industry has to manage very complex procedures and distribution systems that have found very capital intensive and also required the state-of-art technologies. Therefore, several other industries such as information technology, logistic and transportation systems, and others are having impact on the profitability and sustainability of various other industries. Moreover, the growing demand along with pricing fluctuations of oil and gas derivatives influences the efficiency of other sectors like aviation, steel, transportation, automobile, and others (Alexander, 2016).The logistic management is being termed as the most critical aspect of oil and gas industry. It may have direct impact on the profitability and efficiency of oil and gas distribution companies. In the context of growing demand of Oil and Gas within domestic and international marketplace, an efficient supply chain system or logistic management system plays an important role to influence the profitability of different companies. In this regard, the logistics and distribution companies manages several critical factors such as timely delivery of oil and gas derivatives, lowering the transportation cost, ensuring safety, lowering the wastage and many more. In this context, logistics has been emerged as key area of improvement within the Oil & Gas sector. This is because several issues aligned with negligence of logistic manager. In this regard, logistics challenges have remained particularly important within the upstream sector, where significant new development have been addressed in both onshore along with the offshore unconventional activities that are creating several specific challenges that are significantly associated with the contemporary business operations. In the context of midstream and downstream sectors, logistics management has been identified as a key challenge that may have direct impact on the long-term organisational sustainability (Main Challenges Of Oil And Gas Industry, 2020). In the context of contemporary oil and gas sector, logistics is being termed as the most critical aspects of supply chain within oil and gas transportation. However, negligence of logistic manage leaves adverse impact on the efficiency of companies that are dealing in oil derivatives. The negligence leaves the adverse impact on the efficiency of companies. The Saudi Arabia is having the second largest oil reserves in the world. Logistic management plays a critical role in the Oil & Gas sector. This is because the element of supply chain and logistics management represents between 5 to 15 percent of total operating cost. Companies functioning in the Oil & Gas sector in Saudi Arabia are operating different regions and exporting their products in different countries. As a result of poor logistic planning, companies working in Oil & Gas sector are facing several issues aligned with the value leakage that may adversely impact on the profitability and total cost of operations (Alexander, 2016). This is because the importance of supply chain management in oil and gas derivatives has been enhanced in significant manner in Saudi Arabia because the country experienced a significant increment in oil production, and it has been emerged as the largest exporter of oil. In this context, the current production level is increased to 11.01 million barrels/day and Saudi Arabia has second largest proven reserves of oil and gas so as the importance of appropriate logistic practices has been enhanced in significant manner (Oil and gas regulation in Saudi Arabia: overview, 2020). Moreover, the Saudi Arabia has more than 49 oilfields so as an appropriate logistic and distribution network plays a critical role to influence overall efficiency of oil and gas distribution firms and it also incorporates several logistic management issues.
The negligence of logistic manager is significantly aligned with customer services, transportation cost control, project planning & risk management, supplier/partner relationship, compliance of government and environmental regulations, and others In the context of customer service management, logistic manager is liable to establish an efficient work culture with the integration of different technologies, logistic management procedures, increment in coordination in several business partners, and many more to maximise the efficiency of logistics operations within the oil and gas (Alfaqiri and et.al., 2019). Moreover, risk assessment is being termed as important aspects of logistic management operations within oil distribution that leaves direct impact on the efficiency of logistic manager along with operational capabilities of oil transportation and distribution companies. In oil and gas, reducing costs means optimizing processes as much as possible. It is an extremely complicated mission to reduce production costs and still maintain proper quality levels. Therefore, constantly monitoring operational processes as well as defining gaps is being termed as the crucial to manage the cost in an efficient manner. In addition to that, logistic companies are facing several issues from the negligence of logistic manager such as lack of transparency, real time monitoring of different activities, and many more. The lack of transparency intro operating and processes could lead disruption in business processes along with the integration of different capabilities aligned with oil and gas distribution and transportation. Moreover, the efficiency of logistic operations is significantly aligned with operational capabilities of companies for developing and managing the relationship with 3rd and 4th party logistic player to manage the domestic along with international distribution of oil derivatives (Herrera, 2012). Apart from that, oil companies are also facing several issues as a result of negligence of different regulations and legal compliances in handling of different types of oil products. In this context, the role of the management of transportation companies has been enhanced on significant manner to comply all legal guidelines in an efficient manner. Therefore, logistic management practices could support management of oil distribution companies in dealing with negligence of managers.
1.2 Aim and Objectives
Aim
The study is aimed to manage the successful application of the logistics management in the management practices of logistics companies for avoiding negligence of practitioner: A study on oil derivatives transportation and distribution companies in Saudi Arabia.
Objectives
To evaluate key elements to manage the oil derivatives transportation and distribution.
To assess quality of services issues and other problems in oil derivatives logistics operations caused by the negligence of practitioners.
To examine the contemporary trends in the logistic management operations in oil and gas distribution companies in Saudi Arabia
To address key elements of successful application of logistic management to influence performance of transport and distribution channels in logistics companies.
To identify different strategies and activities to maximise the productivity of logistic management operation in oil and gas distribution.
1.3 Research Questions
What are the key elements that need to consider by logistic manager to manage the oil derivatives transportation and distribution?
What are the most critical issues and other problems addressed in oil derivatives logistics operations caused by the negligence of practitioners?
How do different oil and gas distribution companies in Saudi Arabia manage the logistic management operations?
How does appropriate logistic management provide different benefits for oil distribution companies?
What are the key elements of successful application of logistic management to influence performance of transport and distribution channels in logistics companies?
What are different strategies and activities to maximise the productivity of logistic management operation in oil and gas distribution?
1.4 Rationale of Study
This present has tried to evaluate different elements of successful application of the logistics management in the management practices of logistics companies for avoiding negligence of practitioner with reference to corporate practices of oil derivatives transportation and distribution companies in Saudi Arabia.The main reason behind consideration of area of current study was that there have been several studies carried out on logistic management operations (van der Weshuizen and West, 2016). However, the current study is going to present a distinct overview logistic service issues that are faced by oil and gas distribution companies in Saudi Arabia because ofthenegligence of practitioners. Moreover, this investigation also determines different variables and corporate practices that could be considered by oil distribution companies in the logistic management operations. In this context, different past studies have disclosed that an organisation can ensure the high-quality logistic management operations with consideration of latest technologies, integration of different systems, and better training program for logistics manager (Albliwi and Ghadge, 2017). However, the past studies have not covered the negligence of logistic manager along with their implications of logistic management operation within oil and gas sector. Therefore, the present study is going to evaluate different tactics of logistic management, issues with logistic managers, and other variables of logistic operations in the context of oil and gas sector to maximise the efficiency of oil and gas distribution companies
1.5 Report Structure
The first chapter of the study is Introduction that provides a brief overview about the background, study aim and objectives along with the rationale of study to reader. It also determines the structure of study report so as a reader can examine the critical components of the area of investigation. The second chapter is called Literature Review that covers a detailed assessment of findings of pat studies, views of different scholar, government reports, and others to gain an in-depth understanding about different key words and topics aligned with the area of investigation. The third chapter is known as Research Methodology that carries a systematic comparison of different research approaches and tools with reference to study goals and nature of investigation. In the context of present investigation, researcher has applied the qualitative research methodology to manage the primary and secondary research to meet the study goals. The fourth chapter is considered as Result that covers the findings of past studies along with outcomes of primary data collection. The next chapter is called Discussion in which a researcher carries out an evaluation of different study outcomes to generate conclusion. The last section is Conclusion in which researcher presents the findings with reference to objectives to determine an overall outcome.
CHAPTER 2: Literature Review
2.1 Introduction
This section covers a detailed evaluation of views of different scholar and findings of past studies in relation to study goals. In this context, researcher considers a variety of secondary sources such as books, journals and online articles to gain in-depth understanding of subject matter (Langley and Coyle, 2020). This literature review carries out an-depth understanding different variables of logistic and supply chain along with other issues to achieve study goals in an efficient manner.
2.2 Role of Distribution and Transport in Logistics and SCM
The study of Waters (2019) determined that the transportation and distribution are being termed as the key component of supply chain management. This is because an efficient transportation system provides smooth and timely delivery of different products and materials as per the predetermined schedule. In the context of contemporary business environment, three critical components of supply chain contain purchasing, manufacturing and transportation in which supply chain manager considers several factors such as optimum utilisation of materials, production amounts, inventory management, configuration of distribution network, and shipping management. Christopher (2016) stated that the effective transportation management is also termed as a competitive differentiation for a company that may have direct impact on the efficiency of supply chain. This is because the importance of transportation and warehouse managers should examine transportation within their supply chains. Ultimately, an appropriate transportation management has been found very effective for achieving the cost objectives. The transportation cost is being termed as 60% of total operational costs within the company's supply chain costs.Waters and Rinsler (2014) stated that modern supply chain transportation managers deals with various risk factors for lowering the supply chain days. In dealing with several risk factors like shortage of material, system failure and deteriorating infrastructure, logistic plays a critical role in influencing efficiency of supply chain management (Copacino, 2019). The investigation of Harrison and Aitken (2019) determined that the transportation in the supply chain covers the ferrying a product from a supplier to customer or a distribution store through road, air, rail and pipeline or seas. In this context, logistic manager has to consider several variables such as cost of operations, transmission time, and nature of products. In this context, an optimum integration seems essential among consumer, carriers, suppliers and information flow. These variables have been found as the most pertinent issues within an effective supply chain. As per the research of Bhandari (2014), it has determined that the transportation in the supply chain is being used to control costs in the business operations. This is because freight and fuel costs take up the most of the logistic budget. In this context, logistic manager considers various variables in control the business expenditures in an efficient manner. However, Schönsleben (2018) argued that several technologies enhance the transparency in the transport and logistics operations. In this context, the application of technologies and data increases the efficiency of transportation network and interacting with broader transportation ecosystem. Furthermore, an appropriate consideration of different cost drives plays a critical role in establishing the entire supply chain. It may have direct impact on the quality of customer services. This is because the transportation is emerged as the service product. The transportation has been found very effective to segment shipments in supply chain (Sukati, Baharun and Yusoff, 2012). In this regard, the prioritisation is being termed as the most essential element in the transportation system with reference to number of customer, time of year, supplier, level of urgency and importance of goods. The segmentation assists transporter in managing the complex issue so as the logistic manger would be able to assess the various alternatives in the transportation process (Lambert, 2017). The research of Ahmad and de Brito (2016) determined that the logistic manger plays a critical role in the application of different technologies in the transportation management. This is because the efficiency of transportation system is significantly influenced by transportation management software. It covers different elements such as route planning, fleet management, fuel costing, supplier relationship management, cargo handling and customer communication. In this regard, the Transportation Management System has been found very effective in controlling and lowering the transportation costs because it can reduce freight costs by 8% and so as supply chain manager can achieve the goals of cost-effective transportation (Holdaway, 2014). However, Yusuf, Abubakar, and Ambursa (2013) asserted that the transportation is used to enhance the efficiency of multiple supply chain management options. This is because the majority of products are relied on different transportation modes that are travelling throughout supply chain. The appropriate mode of transportation in a supply chain must be selected at every point of the transport and logistics cycle. Therefore, the transportation and logistic management are being termed as key most critical elements of an efficient supply chain management (Lu, Azimi and Huang, 2019).
2.3 Assessment of critical elements to manage the oil derivatives transportation and distribution.
In the context of oil and gas derivatives transportation and distribution, different studies have found different critical elements. In this regard, Bandinelli and Gamberi (2012) stated that the selection mode of transportation is being termed as the most critical element of supply chain management such as oil tankers, pipeline, tank trucks, barges and tugboats. In the context of overseas transportation of oil and gas derivatives, oil tanker or crude carriers like Very Large Curde Carriers (VLCC) are playing a critical role in transporting the oil through different seas routes (Tanackov and Škiljaica, 2018). However, several issues were identified in the sea route transportations such as leakage, weather factors, environmental issues, and many more. The research of Calixto (2016) determined that Oil and gas companies are frequently used different methods to increase equipment reliability and decrease downtime, especially unplanned downtime. By running equipment at the optimal ranges recommended by the original equipment manufacturer (OEM), companies would be able to increase the "Mean Time between Repair Replacement." Gardas, Raut and Narkhede (2019) stated that pipelines are playing a critical role in managing the transportation of oil and gas. In this context, different types of pipelines are used for the transportation of oil and gas in different routes. In this regards, companies have to consider several element to influence efficiency of pipeline-based oil and gas transportation. In this regard, Ahmad, Brito and Tavasszy, (2016) stated that an appropriate strategic planning is essential to manage the optimum usage of pipelines. This is because a systematic strategic assists people in determining the shortest and most appropriate economic routes with reference to distance, operational cost of pipelines, number of pumping stations, gas compression stations, storage facilities, terminals and others from the refinery to final consumers. However, offshore pipelines are carrying more risk for leakage and higher environmental impact, but appropriate technological advancements in the pipeline materials, sensor packages, and other monitoring system that are playing an important role in improving the efficiency and safety of transportation of oil derivatives through pipelines (Raut, Narkhede and Gardas, 2017). The study of Siddiqui, Haleem and Sharma (2012) determined that the supply chain mapping has been termed as critical element to manage the transportation and distribution of oil and gas derivatives. Supply chain mapping seems as a great approach to mitigate the supply chain risks, especially when there is over dependence on one country that may have direct impact over the efficiency of supply chain management practices. Supply chain mapping also involves the assessment of different aspects of supplier’s management such as identification of global sites, domestic distribution sites and subcontractors. The evaluation of different suppliers is considered as an important variable of supply chain mapping (Pagano and Liotine, 2019). Therefore, Shamsuzzoha and Helo (2013) argued that companies that have gained appropriate expertise in the supply chain mapping would be able to assess several benefits when disruptions happen because they could quickly examine that how the supply chain of different companies involved in oil and gas production could be impacted for the short and mid-term. In this regard, when companies are having the advance knowledge of disruption trends and market uncertainties along with their implication on the overall supply chain then companies has to evaluate the lead time to execute avoidance and mitigation strategies in immediate manner (Stough, 2017). Helo and Hao (2019) asserted that the supplier risk intelligence has been found as an important process of acquiring and evaluating the supplier risk with reference to current and future requirements. The oil and gas industry is highly dependent on suppliers that are maintaining the availability of complex services and critical equipments to support different types of projects. In the context of oil and derivatives transportation, companies have to measure the performance of different contractors and transporters with a detailed evaluation of different factors such as professional capabilities, efficiency of training, consideration of safety norms and other (Elfirdoussi, Fontane and Kabaili, 2020).
2.4 Importance and benefit of appropriate logistic management for oil distribution companies
Tadejko (2015) stated that the logistics management is being addressed as an important element of the supply chain management that is responsible for planning, implementing , and controlling the efficient flow and storage of goods and services for attainment of different requirements of customers. Fundamentally, logistics management is identified as a tool to control and supervise the movement of different types of goods and it plays a critical role in influencing the efficiency and profitability of different agencies. The investigation of Zubar (2021) determined that an appropriate logistic management involves an appropriate combination of different factors that covers transportation management, management of freight and inventory, materials handling with optimum safety, schedule of delivery and order management. Therefore, the role of logistics management has been enhanced a significant in the contemporary global business operations that encompass the optimization processes through which companies are able to maximize revenues, cutting down the manual labor, information management, and exceed customer expectations (Aniki, Mbohwa and Akinlabi, 2014). In the context of oil and gas industry, Barr-Pulliam, Brown-Liburd and Sanderson (2017) stated that the importance of logistic management has been enhanced on significant manner for oil distribution companies because oil industry operates in the global market and different commodities such as oil, gas, along with the petrochemical are need some specific modes of transportation that include pipe-lines, tankers, as well as railroads. Therefore, an efficient logistic management ensures the optimum utilisation of different modes of transportation with reference to nature of goods. The investigation of Ali, Nagalingam and Gurd (2018) determined that different oil commodities are producing in some specific or limited regions of the world but the demand of oil derivatives has been found in all over world because represent an essential source of energy as well as it is also acted as the raw material for various other industries. Therefore, this industry faces several problems in managing logistic management operations. For example, lead-time of several weeks from the shipping point to the final customers’ location has been found a very common problem in this type of industry (Kong, Luo and Huang, 2015). In addition to that, Fu, (2017) stated that the great distances between supply chain partners incorporates the high variability of transportation times in the logistic operations hurt suppliers in the context of service quality levels and final customers in terms of safety stock costs. Furthermore, an appropriate logistic management system assists companies in managing different modes of transportation that are involved in oil and gas distribution such as ships, trucks, pipelines, and railroads. It establishes an appropriate coordination and optimum utilisation of transportation capabilities through different digital technologies to maximise the efficiency of logistic management practices (Zijm, Regattieri and Heragu, 2019). Gallay and Nurminen (2017) stated that logistic management has found as important tool for creating the visibility within the company’s supply chain. This is because an advanced transportation management systems (TMS) helps companies in analyzing the historical data and tracking the real-time movement of goods that are moving within different locations. Therefore, the logistics managers use this information in lowering the lead time and it would support companies in avoiding the potential causes of disruptions. In the context of contemporary business environment, TMS data analysis keeps a company’s supply chain moving more efficiently, all while gaining operational insight (McFarlane, Giannikas and Lu, 2016).Bag, Gupta and Luo (2020) stated that the cost saving has been termed as an important benefit of logistic management. In the context of contemporary business environment, managing logistics with efficiency will provide an appropriate control over the inbound freight, to manage inventory at optimal levels, to manage the reverse flow of goods, along with the utilization of freight movement with the proper transportation modes that would support companies in lowering the overall transportation cost. In different studies, it has found that the inbound freight accounts for about 40% of general supply chain costs (Karabulut and Civelek, 2020). This means proper logistics management assists companies in identifying the hidden opportunities for savings the business expenditures in an efficient manner. Waters (2019) stated that the logistics is being used as an important strategic weapon in a competitive market because it provides assurance to management for searching for new sources to increase the overall efficiency of enterprises, to expand new areas for finding reserves outside the existing production capabilities, andto optimize the interaction of the constituent elements for optimum utilisation of potential resources (Copacino, 2019). Harrison and Aitken (2019) argued that the oil and gas industry passes through a variety of loads and divisionsthat includes transportation of goods, storage and distribution with consideration of nature of materials that are identified in three phases such as gaseous, liquid and solid. Therefore, the implementation of the logistics concept assists companies in reducing the time losses that are identified in the production cycle and the timing of orders, keeping the stocks of materials and development of the finished products (Sukati, Baharun and Yusoff, 2012). Moreover, it enhances the level of innovation in different processes and ensures the optimum compliance with contractual obligations so as an organisation could strengthen the optimum integration a variety of material flows in the production process.
2.5 Evaluating different strategies and activities for maximising the productivity of logistic management operation in oil and gas distribution
For maximisation of the productivity of logistic management operations in the oil and gas distribution, companies consider different tools and strategies in the logistic planning and resource management (Lambert, 2017). In this regard, Ahmad and de Brito (2016) stated that a good planning structure is being termed as an important strategy to maximise the productivity of logistic operations because it is considered as a foundation of any management process. The planning process covers different variables such as the procurement of goods, management of the appropriate storage facilities, and ensuring the time delivery of different products to different locations. It seems as an important element of oil and gas distribution operations. It covers time, transportation; along with the costs that are playing a critical element in the planning structure. Yusuf, Abubakar, and Ambursa (2013) stated that a supply chain operative must be equipped with the devise the flow chart of complete process. Maximum output within the minimum input shows the high level of productivity. In the context of contemporary business environment, a good planning provides a great supportto attain maximum work within the least possible time (Holdaway, 2014). In the context of oil distribution operation, an appropriate planning of business operations and supply chain may have direct impact on the cost of transportation and timely delivery of different products and services (Lu, Azimi and Huang, 2019). In addition to that, Calixto (2016) stated that a good as well as effective logistics management plan enhances the efficiency of logistic manager because an experienced manager is able to develop an appropriate plan for managing the unforeseen circumstances i.e. unavailability of transportation, lack of coordination within the internal business operations, and lack of appropriate research and selection of the correct freight. In this regard, an appropriate contingency plan in the logistics managementwould be found very effective to tackle emergency situations along with avoidance of any logistics failure (Tanackov and Škiljaica, 2018). In this context of oil and gas distribution, the consideration of different safety plan would enhance the efficiency of logistic operations. The investigation of Gardas, Raut and Narkhede (2019) determined that the automation plays a critical role in influencing the productivity of logistic management operations. This is because digitisation is being termed as an important aspect of contemporary business operation in which the automation increases the efficiency of an organization with the help of increased flow of information and integration of different operation with the data analytics. Therefore, automation is being termed as the vital factor in business process optimizations. Furthermore, Ahmad, Brito and Tavasszy, (2016) argued that the role of technology has been enhanced on significant manner in dealing with various logistical operations. In this regard, there areseveral software identified that could be deployed in the logistics management process to improve the efficiency and effectiveness of logistic management operations. This is because business process software would be found very effective in the contemporary supply chain operations in oil derivatives that may timely updates the movement of goods (Raut, Narkhede and Gardas, 2017). These systems can be integrated for tracking the movement of different goods, creating the transparency, empowering an appropriate safety network and providing the good customer experience, that may improve the efficiency different corporate operations. It influences the overall productivity of companies. Siddiqui, Haleem and Sharma (2012) argued that the business process software has been found very effective for managing the movement ofgoods. It covers different variables the consideration of different goods, procurement of goods at the warehouse, and delivery of the goods at the destination. The consideration of automated system would save a considerable amount of time because the avoidance of different errors and work operations (Pagano and Liotine, 2019). Moreover, the automated tracking system has found very effective for facilitation the accurate tracking that may increase the effectiveness of logistics planning.Shamsuzzoha and Helo (2013) argued that the importance of automation has been enhanced in significant manner in the contemporary supply chain operations because it helps in managing and organizing the account details of different suppliers and different activities that plays a critical role in attainment of safety goals in oil gas transportation and it seems a great tool to influence the productivity in positive manner. As per the research of Helo and Hao (2019), it found that the value relation is a most crucial component that influences the productivity of logistic management. It contains an appropriate team that is responsible for ensuring the growth as well as success of the company with an appropriate supply chain. It includes the warehouse manager, logistic manager, transport manager, and others that are playing important role to ensure work efficiency. In this context of value relation,companies should have to manage an appropriate investment in proper training of the employees (Elfirdoussi, Fontane and Kabaili, 2020). This is because the regular training workshops help would be found very effective for increasing efficiency of employees with reference to latest trends in the logistics industry in relation to oil and gas distribution. In the context of oil and gas derivatives transportation and distribution, skills of logistic team assists management in enhancing the management efficiency, and it would play a critical role in enriching the customer experience that would influence overall customer satisfaction (Langley and Coyle, 2020). Christopher (2016) stated that the highly skilled staff member have appropriate capabilities to manage the supply chain operations and other issues. Furthermore, the warehouse management is being termed as an important element of logistic operations. This is because a good warehouse management is being termed as an integral part of effective logistics management. Warehouse operations structure and planning have direct impact on the productivity of logistic operations. In this context of oil and gas production, the concept of inventory management includes the evaluation of production capabilities, assessment of market demand, capabilities of tanks, inventory cycle and others. It leaves the direct impact on the overall productivity of logistic management operations (Stough, 2017). In this regard, Bhandari (2014) stated that the maximisation of storage capabilities is being termed as an important tool to influence the efficiency of logistics operations. In the context of bulk storage, a software application provides a great support for sequencing the products because it provides a great support to assess the greater value as it effectively and efficiently locates the product as per the its need and without delay. Software applications and other warehouse operations must require well trained staff so as oil and gas companies should have to manage a significant investment on the efficiency of staff members. As per the research of Schönsleben (2018), it addressed that efficient transportation is being termed as an important element of productivity of logistic management operations. Efficient management of transportation operations helps companies in reducing the expenses of the logistics firm and cost of oil and gas distribution. The transportation operations can be revamped for faster delivery of the products that could enhance overall efficiency of different operations. Tadejko (2015) argued that the transportation team plays a critical role for determining the best delivery route for efficient transportation management. By opting the shortest routes, a logistics team could develop different cost-effective as well as time-effective method for oil transportation and distribution. By creating the cost-effective packaging, the oil and gas companies can reduce the material handling cost and avoid leakage or spill related risk factors (Aniki, Mbohwa and Akinlabi, 2014).
The investigation of Barr-Pulliam, Brown-Liburd and Sanderson (2017) determined that the regular monitoring and improvisation have found very useful for the logistics network optimization, and integration of different approaches to maximise the productivity of different distribution channels.The optimum assessment of output and production capabilities could be perceived as the most important aspect of supply chain management. The role of different measurement tools and software applications has been enhanced in significant manner that easily evaluates and classifies the information that plays a critical role in influencing the efficiency of logistics management (Ali, Nagalingam and Gurd, 2018). The future planning is majorly dependent on the measured information that includes cycle time metrics, cost metrics, and service metrics that are having direct influence on the productivity of logistics operations.
2.6 Identification of services quality issues and other problems in oil derivatives logistics operations caused by the negligence of practitioners.
In the context of contemporary logistic operations, the role of logistic practitioner has been enhanced for maximising the efficiency of oil derivatives logistics operations. In this regard, Fu, (2017) stated thatthe negligence of logistic practitioners incorporates several service quality issues while managing the oil derivatives logistics operations. This is because the logistic manager evaluates a variety of data and information for establishing a seamless logistic system in the oil and gas distribution. In this regard, improper consideration of a variety of information associated with the cost of different modes of transportation, carrying capabilities, demand of oil and gas in different region, and others could create several problems in optimum utilisation of different resources in logistic management and timely delivery of oil and gas in different locations (Zijm, Regattieri and Heragu, 2019). In the context of supply chain management, ignoring data related to oil transportation management has been found as the most common negligence aligned with operations of logistic manager. However, Gallay and Nurminen (2017) stated that the transportation of oil and gas derivatives contain several safety and environmental concerns that are associated with the leakage, spill, waste management, and others. In the regard, negligence of logistic manager about the legal guidelines for oil derivative transportation could incorporate various compliance related issues so as organisation could find various types of penalties and environmental issues that may hamper the goodwill of oil distribution companies. The investigation of Bag, Gupta and Luo (2020) determined that the improper integration of different logistic management approaches may delay the delivery of a variety of oil and gas products. This thing could reduce the efficiency of business operations in the oil and gas distribution along with it would increase the cost of operations. Apart from that, Waters (2019) stated that the logistic manager is liable to carry out future operational planning with reference to future market demand and production capabilities of oil production companies. In this context, non-consideration of appropriate market trends by logistic manager could hamper the efficiency of oil derivatives distribution companies.
2.7 Examining different software tools and tactics for logistic management operations
For maximising the efficiency of supply chain or logistic operations, different researchers has determined the growing importance of the application of different software tools and tactics. Harrison and Aitken (2019) stated that the Transportation Management Software (TMS) has found very effective in performing the load optimisation along with supply chain visibility. In this context of oil and gas distribution, this system avoids the deviations in the delivery management so as logistic manager would be able to save the business expenditure in the strategic planning and resource management along with the consideration of different mode of transportation (Sukati, Baharun and Yusoff, 2012). For example, Eyefreight has been addressed the most reliable TMS that would support the logistic manager in analysing a variety of data and improvement in customer services. In similar way, Zubar (2021) stated that Route Optimisation Software assists supply chain manager the most cost-effective transportation route in an automated manner with reference to logistic capabilities, availability of different modes of transportation, forecasting of delivery schedule and others. It plays a critical role in sharing the information at different levels of organisational structure. For example, AbivinvRoute is being termed as the most appropriate fleet management software for saving the logistic cost. The research of McFarlane, Giannikas and Lu (2016) determined that the Warehouse Management System (WMS) has found very effective for resolving different issues within the warehouse management. It supports the logistic manager in evaluating inventory levels and data analytics to maximise the efficiency of warehouse management practices (Kong, Luo and Huang, 2015). It would assist companies in lowering the warehouse management cost along with optimum utilisation of available space.
2.8 Assessing the key elements of successful application of logistic management to influence performance of transport and distribution channels in logistics companies.
The study of Karabulut and Civelek (2020) determined that the successful application of logistic management practices offers several benefits to companies in influencing the performance of transportation and distribution channels. In this regard, different technologies like Artificial Intelligence, warehouse robotics, cloud computing and other provides a great support in managing a variety of information with the help of data analytics so as logistic companies in oil and gas derivatives would be able to evaluate the demand of different goods in different locations, availability of transportation tools, safety issues with different modes of transportation, cost and others. Therefore, the logistics management system would save the business expenditure and increase the efficiency of logistic companies with the optimum utilisation of resources. Copacino (2019) argued that the cloud computing offers a centralised information sharing tools to manage the supply chain from the overseas locations. It supports the transportation companies for managing the real-time tracking of transportation flow. As per the research of Schönsleben (2018), it found that the successful implementation of logistics management system is significantly aligned with the professional skills and technical expertise in the logistic operations. In this regard, the consideration of appropriate training about different software tools and other technologies related to supply chain would enhance the professional expertise of logistic manager so as they would apply different technologies and methods in an efficient manner that would assist the logistics companies in lowering the transportation and distribution cost and optimum utilisation of available capabilities along with attainment of safety guideline (Tadejko, 2015).
2.9 Examining the contemporary trends in the logistic management operations in oil and gas distribution companies in Saudi Arabia
The investigation of Barr-Pulliam, Brown-Liburd and Sanderson (2017) determined that the logistics management operations in oil and gas distribution companies in the Saudi Arabia are mainly managed by the third party logistics companies. Therefore, the Saudi Arabian third party logistic market would be expected to register a growth rate of over 6.5% during the forecast period of 2020-2025 (SAUDI ARABIA THIRD-PARTY LOGISTICS (3PL) MARKET - GROWTH, TRENDS, COVID-19 IMPACT, AND FORECASTS (2021 - 2026), 2021). The third-party logistics market is gaining immense popularity in Saudi Arabia catering to the management of the increasing cross-border flow of oil and gas along with domestic markets. These agencies support oil and gas companies in lowering the cost and maintaining the availability of specialised services with reference to special requirements of client (Bhandari, 2014). Saudi Arabia's current production of oil has recorded near to 11.01 million barrels/day .Furthermore; country has the world's second largest proven oil and gas reserves that are 21.9% and 4.6% respectively. It has been emerged as the largest exporter of crude oil, with around 266,260 million barrels of proven reserves and 42 trillion cubic metres of gas reserves so as the demand of different channels of oil and gas would be increased in significant manner (Oil and gas regulation in Saudi Arabia: overview, 2020). For lowering the cost of supply chain, companies in Saudi Arabia consider different technologies and methods for improving the operational capabilities.
2.10 Summary and the gaps found
As per the above assessment, this investigation has addressed that role of different elements of logistic management has been enhanced on significant manner to manage the supply chain of oil and gas companies. Furthermore, the above evaluation has identified different approaches and tactics that are playing a critical role in maximising the efficiency of logistic operations such as application of latest software, selection of different tactics of logistic management, and others to increase operational capabilities of logistic manager. In the context of above literature, there are some gaps identified in determining different issues in oil and gas distribution procedures. The assessment of past studies in literature review has determined that past studies did not cover the role of contemporary logistics management technologies in managing the distribution network. Moreover, previous researches did determine the implications of the change in regional and international demand over the supply chain of oil and gas (Lambert, 2017). Moreover, some gaps are also identified in past studies associated with the growing environmental safety and sustainability concern in managing different networks of oil and gas distribution (Karabulut and Civelek, 2020). In addition to that, the negligence of logistic manager was not being considered as key area of concern in different journals in the context of logistic management operations. Therefore, this investigation is aimed to evaluate the successful application of the logistics management in the management practices of logistics companies for avoiding negligence of practitioner with reference to oil derivatives transportation and distribution companies in Saudi Arabia.
CHAPTER 3: Research Methodology
3.1 Introduction
The research methodology is termed as the most important section of contemporary studies. It assists researcher in selection of different research tools and data collection with reference to nature of investigation (King and Mackey, 2016). In this context of present investigation, researcher has focused tomanage the successful application of the logistics management in the management practices of logistics companies for avoiding negligence of practitioner in the context of oil and gas distribution companies in Saudi Arabia. As per the nature of present investigation, researcher has considered qualitative research methodology to assess appropriate research findings in relation to study gaols.
3.2 Research Philosophy
The research philosophy determines a certain set of beliefs that represents the researcher’s perception about the subject matter. It assists researcher in determining the relationship among different variables. In different types of researches, researcher considers different types of research philosophies with reference to nature of investigation (Humphries, 2017). In the context of present investigation, researcher was found two type of possible research philosophies i.e. positivism and interpretivism. Ledford and Gast (2014) stated that the positivism research philosophy is mainly applied in performing quantitative researcher in which an investigator considers a variety of data along with the large scale survey. It assists researcher in application of statistical for performing trends analysis and assessing the relationship among different variables. Moreover, positivism research philosophy has found very effective for carrying out scientific studies in which a researcher considers a certain set of regulations with statistical tools to examine a variety of data in relations to study objectives (Fletcher, 2017). In this regard, the investigation of Habib, Pathik, and Maryam (2014) determined that positivism research philosophy uses only such type of data that can be verified in a value free manner so as an investigator would be obtain appropriate results whereas this positivism research philosophy could provide appropriate results through statistical analysis. On the other hand, Habib, Pathik and Maryam (2014) stated that interpretivism research philosophy pays extra attention to assess the perception of people in different situations. It seems a great tools in supporting the qualitative investigation. Moreover, interpretivism research philosophy provides a great assistance to researcher for performing non-scientific and social studies. This approach is mainly implanted with consideration of unstructured interviews for assessing the objective reality and it seems a great tool for carrying out the social action theory. In the context of qualitative studies, interpretivism research philosophy has been found a most reliable tool to develop reliable findings with reference to a wide range of qualitative data (Mishra and Alok, 2017). In the current investigation, researcher has tried to evaluate different factors logistic management and role logistic manager in managing the supply chain and distribution of oil and gas derivatives so as researcher selected the interpretivism research philosophy to enhance the efficiency of whole investigation. The rationale behind consideration of the interpretivism research philosophy was that it would be found very effective to assess the perception of people and to assess in-depth understanding subject matter with the help of qualitative data. Moreover, the selected philosophy was being found very effective to assess greater flexibility for analysing different variables that are aligned with study aim and objectives (Igwenagu, 2016).
3.3 Research Approach
The research approach is termed as a systematic plan and procedure that supports researcher in making different assumptions for the data collection, analysis along with development of appropriate interpretation. With reference to requirements and nature of investigation, there are two possible options available for researcher i.e. inductive and deductive research approach (Al Kilani, 2016). Engwa and Ozofor (2015) stated that the inductive research approach influences the researcher for examining the patterns from different observations and evaluation of different theories. Moreover, different studies have addressed that the inductive approach provides support in generating meaning from the certain data set so as different patterns and relationship could be examined to develop a new theory. This approach is also influenced by learning from the experience. It assists researcher in application of grounded theory. On the other hand, Mackey and Gass (2015) stated that deductive research approach is mainly focused on the development of hypothesis with reference to past studies or existing theories. It supports researcher in testing different theories so as a researcher is able to generate appropriate research outcomes by determining the relationship among different variables. Therefore, deductive approach is concerned with deducting conclusions from premises or propositions. In the context of current investigation, researcher adopted the inductive research approach that would support in gaining new understanding about different concepts of logistic management (Flick, 2015). The rationale behind consideration of inductive research approach was that would offer a great result in the qualitative investigation. In the context of current investigation, inductive reasoning supported investigation to initiate the research process with the detailed observations of the world, which moves towards more abstract generalisations and ideas. Moreover, the inductive research approach has been found very effective in exploring the new phenomena with reference to a variety of past studies. In this context, a systematic interview would offer a greater flexibility to research to select appropriate questions with reference to research objectives so as researcher could gain appropriate information or reliable data about the subject matter for covering the gap of past studies (King and Mackey, 2016). Therefore, the researcher adopted both primary and secondary sources of information for answering the research question with consideration of inductive research approach. However, deductive research approach did not find suitable in the context of current investigation because it pays extra attention on the casualty that would offer better results in the quantitative investigation (Kumar, 2018). In this regard, Snyder (2019) stated that inductive research approach offers a greater flexibility as compared to deductive approach because the deductive approach follows a rigid structure. Therefore, the assessment of different variables of logistics management could be examined an efficient manner with a flexible research process. Therefore, inductive research approach found a great tool to support qualitative study for exploring the new ideas of logistic management.
3.4 Research Design
The concept of research design contains a systematic framework of research methods and tactics that are being considered by researcher to attain the study goals. It supports researcher in collection and evaluation of a variety of data with reference to aim and objectives of an investigation (King and Mackey, 2016). As per the study goals, different researcher considers different research designs such as exploratory and descriptive research design. In the context of exploratory research design, Humphries (2017) stated that exploratory research design has found very effective for formulating a problem in an appropriate manner to establish a systematic investigation. It seems a great tool in discovering the new ideas and thoughts in relation to areas of investigation. Furthermore, the exploratory research design provides a great support to researcher to create appropriate understanding about different problems faced by researcher with reference to nature of investigation. On the other hand, Ledford and Gast (2014) determined that descriptive research deign has found a great approach to describe the situation along with characteristics about the area of investigation. The comparison of exploratory and descriptive research design has determined that the an exploratory research project is being termed as an attempt for laying the groundwork that would support various future studies and it supports researcher in assessing the in-depth understanding about subject matter (Fletcher, 2017). It influences investigator to assess the more insights about the area of investigation. But, the descriptive research design is being termed as an attempt to explore some additional information by describing the more details about the different variables of area of investigation and it supports researcher in the identification of the missing parts within the past studies (Habib, Pathik, and Maryam, 2014). In the context of present investigation, researcher selected the exploratory research design to evaluate different variables of logistic management and negligence of logistic manager and the main reason behind the application of exploratory research design was that it would offer flexible research structure that may have direct impact on the efficiency of qualitative investigation. The qualitative nature of current investigation has influenced the requirement of flexible research deign. On the contrary, rigid structure of descriptive research design did not find suitable in the context of current investigation because quantitative research requires a certain set of norms that could be implemented with the help of rigid research design (Habib, Pathik and Marya. 2014). As per the aim of current study, the exploratory research design would be emerged as the most appropriate research tool to analysis different aspects of logistic management and to explore several other related variables. In the research design of current study, researcher considered questionnaire-based survey for supporting the primary data collection. Researcher focused on the logistic manager of oil and gas distribution companies of Saudi Arabia for taking interview during the primary data collection. Due to pandemic of Covid-19, all respondents were being contacted through telephone to different individual through emails. After their confirmation, researcher took appropriate date and time of interview that could be managed through face to face meetings along with virtual channels. The primary data collection process was being estimated to complete in 15 days. In this regard, different questions that were asked in interview are linked with the research questions, findings of past studies, gaps in previous investigations, and other elements.
3.5 Sources of Data
The current study has tried to different aspects for managing the successful application of the logistics management in the management practices of logistics companies for avoiding negligence of practitioner. In this context, researcher selected both primary and secondary sources of information to assess the variety of data to meet the requirements of qualitative investigation (Mishra and Alok, 2017). In the context of primary data collection, Igwenagu (2016) stated that different researcher uses different sources in the primary research with reference to aim and nature of investigation such as questionnaire-based survey, interviews, observations, face-to-face communication and others. In assessing the responses from the large number of target respondents, a questionnaire-based survey has been found very effective in assessing the perception of others. By evaluating the responses of participants in the primary data collection process, researcher would be able to generate appropriate research findings with reference to aim and objectives of particular investigation. In the context of present investigation, researcher selected logistic manager of oil and gas distribution companies for conducting a systematic interview (Al Kilani, 2016).On the other hand, Engwa and Ozofor (2015) asserted that the secondary sources of information in the contemporary studies include online books, journals, past studies, internet-based article, and government reports. These sources support researcher in assessing the findings of past studies and views of different scholars for performing the literature review. For assessing the in-depth understanding about different research elements, the secondary sources of information offer a large variety of information so as researcher would be able to draw an appropriate conclusion with consideration of both primary and secondary outcomes (Mackey and Gass, 2015). In context of present investigation, researcher has aimed to examine different aspects of logistic management in the oil and gas distribution companies of Saudi Arabia in which the evaluation of primary and secondary research findings would enhance the reliability of study outcomes. Overall, the consideration of both sources of data collection would support researcher to assess useful research outcomes that would help companies in dealing with different logistics issues.
3.6 Sampling Method and Sample Size
The sampling method determines a systematic approach through which a researcher is able to select the target population and sample size. In the context of contemporary studies, researchers are mainly preferred two types of sampling methods i.e. random sampling and purposive sampling to carry assess appropriate responses in the relation to study objectives (Flick, 2015). Kumar (2018) stated that the random sampling is mainly applied when a researcher does not require any special information and does not any paying any significant attention on the certain group of individuals. Furthermore, the random sampling approach would be found very effective when the size of target population is very large along with big sample size. On the other hand, Snyder (2019) asserted that the purposive sampling approach is mainly used to assess the responses from the certain group of individual. It helps researchers when they are looking to assess the perception of some special group of individual. In addition to that, the purposive sampling approach has been found very effective to assess specialised knowledge and perception of experts about the area of investigation (King and Mackey, 2016). In this context of present investigation, the researcher adopted the purposive sampling approach through which researcher selected the logistic manager of oil and gas distribution companies of Saudi Arabia for performing interviews with reference to open-ended questionnaire during the primary data collection. The main reason behind consideration of purposive sampling approach was that it supported the researcher for assessing expert views about the areas of investigation that may have direct impact on the appropriateness of study outcomes (Humphries, 2017). With reference to requirement of current research, researcher took a sample size of 6 logistics managers who are working in oil and gas distribution companies of Saudi Arabia.
3.7 Data Analysis
For attainment of study goals, researchers consider different technique of data analysis i.e. Thematic Analysis (Qualitative Analysis) and Statistical Analysis (Quantitative Analysis) (Mishra and Alok, 2017). Ledford and Gast (2014) stated that thematic analysis assists researcher in evaluating the findings of primary and secondary results in which a researcher develops different themes with reference to study aim and objectives. This tool has been found very effective in evaluating the responses of people in the primary data collection with the help of tables or charts so as an investigator would be able to draw an appropriate conclusion. On the other hand, Habib, Pathik, and Marya (2014) argued that the statistical analysis is mainly used to evaluate the quantitative data in which researcher consider different approaches such as descriptive statics, correlations and other tests to determine the influence of one variable over the other. The application of statistical analysis would require appropriate data analytics skills to manage and examine the large quantity of data. However, the qualitative nature of current investigation has influenced the researcher to consider both primary and secondary sources of information so as researcher selected the thematic analysis to present responses of participants along with the development of appropriate research findings (Fletcher, 2017). In addition to that, thematic analysis would find a relatively easy approach to execute in the context of primary data collection along with managing appropriate comparison between the primary and secondary research findings.
3.8 Ethical Research
For completion of current study in ethical manner, researcher selected different norms of ethical research. In this regard, researcher provided assurance to all participants that their personal information would not be shared with anyone. In addition to that, investigator would maintain appropriate confidentiality and privacy of personal and professional information all research participants (Mishra and Alok, 2017). Apart from that, the researcher selected the authentic sources of secondary data that would enhance the appropriateness of research outcomes. Moreover, all views of different scholars and findings of past studies were being authenticated through appropriate citation. Furthermore, researcher followed all guidelines of university and government agencies while completion of whole research work in an efficient manner.
CHAPTER 4: Results and Findings
4.1 Introduction
The present study has focused to manage the successful application of the logistics management in the management practices of logistics companies for avoiding negligence of practitioner with reference to logistic management practices of the oil derivatives transportation and distribution companies in Saudi Arabia. With reference to study goals, researcher selected the both primary and secondary sources of information. In the context of primary data collection, researcher selected 6 logistic managers to conduct interviews for assessing the assessing useful information about subject matter. In the process of primary data collection, researcher provided questionnaire to target respondents through emails. Therefore, this section applies thematic analysis to evaluate responses of participants so as appropriate interpretation could be made to meet the study goals (Humphries, 2017).
4.2 Assessment of the Demographic Information
As per the study goals, researcher performed the interviews with the 6 logistic managers working in different oil and gas distribution companies of Saudi Arabia. In the context of contemporary research, demographics of participants may have direct impact on the efficiency and reliability of findings. As per the responses of participants, 3 out of 6 participants were associated with the age group of 30-35 years, 2 respondents were aligned with the age group of 36-40 years, and remaining 1 individual was related to about 40 years age group. With reference to age group of participants, it can be stated that the all selected participants have appropriate understanding about different aspects of contemporary logistic operations in the field of oil and gas distribution. This thing enhances appropriateness of research findings with reference to study objectives. For assessing the more information about the participant’s demographic, researcher was asked to participants about their job position in the logistic department within oil and gas distribution companies. As per the responses of participants, it has addressed that 2 out of 6 six participants are working on the job position of logistic and transportation manager, 2 out of 6 participants have been positioned of supply chain system integration and coordination, and remaining 2 participants are working on the job position of safety and risk manager. By assessing the responses of people that are having different expertises in the field of logistics, researcher has gained a significant success to assess a variety of information about the area of investigation. In the context of personal demographics, the assessment of job position of participants determines their level of expertise in the selected area of study. Furthermore, when researcher was asked about the work experience of participants within the logistics management than 2 individuals determined the work experience of 5 years, one participant stated that he has work experience of 7 years; two individuals determined the work experience 9 years, and remaining 1 determined the professional experience of more than 10 years in the field of logistics. Therefore, it can be stated that all selected participants are having appropriate skills and professional expertise in managing the distribution of a variety of oil derivatives.
4.3 Evaluation of general perception of logistics manager about the logistic management in the oil and gas industry
In the context primary data collection, researcher asked some questions to selected participants to assess the general perception of logistics manager about the logistic management in the oil and gas industry. In this regard, the majority of participants were determined that the role of distribution and transport in Logistics has been enhanced in the SCM in significant manner. As per the stud objective, the Participant 1 stated that “Different tasks and activities aligned with distribution and transport in Logistics support oil distribution companies in completion of different delivery schedules to different client.” In similar way, the Participant 2 also provided similar responses and stated that “The profitability of the oil companies is significantly aligned with the reliability of supply chain network in logistics operation”. In addition to that, the Participant 3 determined that “The logistics department provides assurance to top management about the optimum integration of different modes of transportation to manage domestic and international supply of oil derivatives in an efficient manner”. However, the Participant 4 perceived the logistics and supply chain operations are aligned with normal business processes. Furthermore, the increase in the market competition and growing international business challenge have been considered key driver that influences the role of distribution and transportation in logistic management within oil derivatives. In this regard, the Participant 5 stated that “The increase in market competition within both domestic and international markets influences companies for gaining the appropriate control over the oil transportation related expenditures to control the prices that may have direct impact over the pricing of different oil derivatives.” Moreover, the Participant 6 also presented the positive arguments and stated that “The efficiency of logistics operations provides assurance about the maximum productivity of whole supply chain system.”Therefore, the comparison of views and arguments of different participants has disclosed the growing importance of logistics and distribution system within the supply chain of oil derivatives. Logistics is considered to be a very important part of operations of any business organisation. It is imperative for companies that they use and implement this function properly, or any mistake can have significant negative impact on the organisation. Saudi Arabia is one of the leading oil producers in the world today (Alexander, 2016). There are several businesses and companies in the country operating in this industry. The current study focused on managing the successful application of logistics management in the management practices of logistics companies in the oil derivatives transportation and distribution firms in Saudi Arabia. In this study, the data was collected from both primary and secondary sources, while the data was analysed used qualitative approach of thematic analysis. The following paragraphs present a discussion about the current results and compare it with findings of the previous studies. Saudi Arabia is one of the largest oil producing nations. Moreover, it has the second largest oil reserves. For the sector the role of logistics management and supply chain management is very important (Ali, Nagalingam and Gurd, 2018). If this aspect is not managed appropriately, then it can have a negative impact on operations of the market players, along with putting its very existence in jeopardy. Importance of logistics can be understood from the fact that lack of attention to this aspect leads to several types of issues related to leakages, delays, and many more. Therefore, logistics plays a very crucial role in the functioning and operations of oil and gas companies. The aim of the current study was to manage the successful application of logistics management in the management practices of logistics companies for avoiding those practioners who are negligent. This study focused on the oil derivatives transportation and distribution companies operating in Saudi Arabia. Logistic management plays a critical role in the Oil & Gas sector. This is because the element of supply chain and logistics management represents between 5 to 15 percent of total operating cost. Companies functioning in the Oil & Gas sector in Saudi Arabia are operating different regions and exporting their products in different countries (Bag, Gupta and Luo, 2020). As a result of poor logistic planning, companies working in Oil & Gas sector are facing several issues aligned with the value leakage that may adversely impact on the profitability and total cost of operations. This is because the importance of supply chain management in oil and gas derivatives has been enhanced in significant manner in Saudi Arabia because the country experienced a significant increment in oil production, and it has been emerged as the largest exporter of oil. In this context, the current production level is increased to 11.01 million barrels/day and Saudi Arabia has second largest proven reserves of oil and gas so as the importance of appropriate logistic practices has been enhanced in significant manner (Calixto, 2016).
4.4 Identification of the most critical factors and other elements in the supply chain management
In the context of current study, researcher has tried to evaluate different critical factors that are playing important role in the supply chain managerial practices with reference to study goals. With reference to study objective, when the participants were about the subject matter then different participants provided different opinions and determined different elements as per their perception. In this regard, Participant 1 stated that “Management of different mode of transportation with reference to distinct client’s requirement is being termed as the most critical element that may have direct impact on the efficiency of supply chain practices in oil and gas distribution companies.” Apart from that, the Participant 2 determined that “I prefer the supply chain mapping and supply chain risk intelligence as the most critical success factors because these concepts are not only supporting companies to achieve the seamless flow in the supply chain but also lowering the wastage of resources.” Moreover, researcher has also assumed the integration of different resources that include men, machine and material as the most critical aspects of supply chain operations in the oil derivatives. In the regards, the Participant 3 stated that “The logistic department of oil and gas distribution companies uses various tools and approaches along with different innovative procedures based on traditional practices and technology to achieve optimum utilisation of resources for assessing the maximum productivity within the highly competitive market trends”. Moreover, the Participant 4 stated that “A highly efficient logistic management in oil and gas distribution companies would not only reduce the wastage of resources but also it would support managers for dealing with the variety of emergencies or risk factors aligned with distribution and transportation of oil and gas derivatives.” However, the Participant 5 argued that “The effectiveness of supply chain management system within an organisation is also influenced by the organisation’s system in new technologies, training of staff members, compliance of legal norms, and others that may leave either positive or negative impact on the supply chain management practices”. Further discussion with participants has disclosed that an organisation involved in the oil and gas distribution operations have to consider a variety of factors and critical element for assessing the maximum efficiency in the supply chain operations. These findings are also supported by the views of the Participant 6 in which he stated “Companies involved in the oil and gas distribution have to pay huge attention on the optimum planning and resource management to manage different operations in the logistics management.”Therefore, managers involved in the logistics operations have to consider different variables, approaches and critical factors to influence the productivity of supply chain management operations. Management of different mode of transportation with reference to distinct client’s requirement is being termed as the most critical element that may have direct impact on the efficiency of supply chain practices in oil and gas distribution companies.” Apart from that, the one of the participants stated that “I prefer the supply chain mapping and supply chain risk intelligence as the most critical success factors because these concepts are not only supporting companies to achieve the seamless flow in the supply chain but also lowering the wastage of resources.” Moreover, researcher has also assumed the integration of different resources that include men, machine and material as the most critical aspects of supply chain operations in the oil derivatives. In the regards, Helo and Hao (2019) stated that the logistic department of oil and gas distribution companies uses various tools and approaches along with different innovative procedures based on traditional practices and technology to achieve optimum utilisation of resources for assessing the maximum productivity within the highly competitive market trends. Moreover, Holdaway (2014) stated that a highly efficient logistic management in oil and gas distribution companies would not only reduce the wastage of resources but also it would support managers for dealing with the variety of emergencies or risk factors aligned with distribution and transportation of oil and gas derivatives. However, it can be argued that the effectiveness of supply chain management system within an organisation is also influenced by the organisation’s system in new technologies, training of staff members, compliance of legal norms, and others that may leave either positive or negative impact on the supply chain management practices. Further discussion with participants has disclosed that an organisation involved in the oil and gas distribution operations have to consider a variety of factors and critical element for assessing the maximum efficiency in the supply chain operations. These findings are also supported by the views of Humphries (2017) in which he stated companies involved in the oil and gas distribution have to pay huge attention on the optimum planning and resource management to manage different operations in the logistics management. Therefore, managers involved in the logistics operations have to consider different variables, approaches and critical factors to influence the productivity of supply chain management operations.
4.5 Assessment of the most critical challenges identified in the logistics operations within oil and gas derivative distribution
With reference to study objectives, researcher asked to participants about the most critical challenges identified in the logistics operations within oil and gas derivative distributions then multiple responses were being gained by researcher with reference to views and arguments of different logistics managers. In this regard, different participants determined different issues that may have adverse impact on the efficiency and reliability of logistics operations. In this context, the Participant 1 stated that “The cost control is being termed as the most critical issues identified in oil and gas distribution process in which the increase in the price of fuel and others has increased the transportation cost while managing the transportation of oil and gas through different channels”. As per the responses of different participants, the increase in the business expenditure in logistic operations leaves direct impact on the cost so as the management of different business expenditures has been termed as the most critical task for the oil and gas distribution firm. In similar way, the Participant 3 also considered the cost control as key element of logistic planning to achieve sustainability in the oil and gas distribution. Moreover, the Participant 3 stated that “The transportation of oil and gas derivatives contains the high risk leakage and fire along with other accidents that would not only incorporate life threatening issues but also create the environment safety concern so as the management of different safety concern has been considered the most critical aspect of logistic management operation in the context of oil transportation.” The evaluation of views of participants has determined that a logistic manager has to manage a variety of critical issues and other concerns to maximise the efficiency of logistic practices in the case of oil and gas distribution. In this context, when different participants were asked about the negligence of practitioners would influence the service quality issues in dealing with different oil derivatives logistics operations then the majority of participants supported the argument and accepted that the negligence of practitioners in logistic operation creates several problems to oil and gas distribution companies. In this regard, the Participant 2 stated that “The logistics practitioners are liable to consider different modes or channels of transportation such as trucks, rails, ships, pipelines and others to meet the client’s requirements as per the schedule so as an optimum integration and coordination among different modes of transportation could be achieved in which the negligence of logistic managers could influence improper integration within different modes of transportation that adversely affect the efficiency of whole logistics operations.”In similar way, the Participant 3 determined that “The negligence of logistics manager in oil and gas transportation could increase the chances of improper integration of different modes of transportation in an efficient manner that could influence the wastage of resource.” In the context of contemporary logistic operations in the oil and gas, the role of logistic manager has been enhanced in significant manner in which the negligence of professional creates the negative impact on the coordination and efficiency of different work operations. This is because the Participant 4 stated that “The lack of coordination within different modes of transportation may increase the total cost of transportation.” In addition to that, the Participant 5 determined that “The negligence of logistic manager creates several problems in logistics operations in which companies are facing some issues in managing the different risk factors along with safety level within different stages of transportation of oil and gas. This kind of situation may be occurred when the logistic does not follow appropriate safety guidelines while managing the transportation of a variety of oil derivatives.” Furthermore, legal guidelines have been found very critical to manage optimum safety while handling the oil and gas derivatives transportation through different channels. In this regards, the Participant 6 stated that “The non-compliance of legal guidelines is being termed as an important outcome of the negligence of the logistics practitioners for their different job roles in which an organisation has to get ensure about compliance of all legal norms and safety guideline.” Moreover, the transportation of oil derivatives incorporates several environmental safety concerns because oil spillages and leakages may influence the population level. In this regard, the Participant 1 stated that “The negligence of logistic managers towards the different safety procedures could increase the chances of leakage and spillage while managing the transportation of oil products then could influence water, air and land pollutions that incorporates a variety of environmental safety concerns.” Therefore, the negligence of logistics practitioners is being termed as the most critical element identified in managing the logistics operations in an efficient manner. The researcher asked to participants about the most critical challenges identified in the logistics operations within oil and gas derivative distributions then multiple responses were being gained by researcher with reference to views and arguments of different logistics managers. In this regard, different participants determined different issues that may have adverse impact on the efficiency and reliability of logistics operations. In this context, Igwenagu (2016) stated that the cost control is being termed as the most critical issues identified in oil and gas distribution process in which the increase in the price of fuel and others has increased the transportation cost while managing the transportation of oil and gas through different channels. As per the responses of different participants, the increase in the business expenditure in logistic operations leaves direct impact on the cost so as the management of different business expenditures has been termed as the most critical task for the oil and gas distribution firm. In similar way, King, and Mackey (2016) also considered the cost control as key element of logistic planning to achieve sustainability in the oil and gas distribution. Moreover, Lambert (2017) stated that the transportation of oil and gas derivatives contains the high risk leakage and fire along with other accidents that would not only incorporate life threatening issues but also create the environment safety concern so as the management of different safety concern has been considered the most critical aspect of logistic management operation in the context of oil transportation.” The evaluation of views of participants has determined that a logistic manager has to manage a variety of critical issues and other concerns to maximise the efficiency of logistic practices in the case of oil and gas distribution.
4.6 Growing importance of technology in the logistic operations
In the context of contemporary business operations, the role of technology has been enhanced in significant manner to maximise the efficiency of business operations. In this regard, different technologies involved in the transportation and information management have been found very useful to enhance the effectiveness of supply chain and logistic operations. In this regard, the majority of participants were accepted that the process automation is being termed as an important tactic to influence the productivity of logistic management operations in oil and gas distribution in Saudi Arabia. In this regards, the Participant 1 stated that “The application of different automated system assists the logistics management in establishing the better coordination and information management system that may leave the positive impact on the performance of transportation and distribution channels.” Therefore, the usage of automated based out centralised system and cloud computing enhances the seamless flow of information to achieve optimum integration within different modes of transportation. In this context, the Participant 2 stated that “The consideration of the latest technologies in the logistics operations influences the logistic manager for learning of new skills and technologies to promote the usage of different software and other tools that would enhance the efficiency of logistic management operations”. To meet the contemporary market challenges, the skills and proficiencies of logistics managers are playing an important role to adopt latest technologies to maintain the seamless distribution of oil and gas within domestic and international markets of Saudi Arabia. In this regard, the Participant 3 determined that “The technology assists the logistics manager in ensuring optimum utilisation of operational capabilities in the form of allocation of distribution channels in an efficient manner that maximise the productivity of oil and gas distribution companies”.In the context of contemporary business environment, the role of technology has been enhanced to evaluate the market demand and supply trends so as the companies in Saudi Arabia would be able to attain better coordination among different activities such as warehousing, inventory management, safety checks, and others. As per the study goals, when the participants were asked about the key motives of the successful application of logistic management operations and latest technologies then the Participant 5 determined that “The latest technology in logistic management system promotes the better coordination among different activities that would avoid delay in the supply chain with optimum integration of different channels of transportation”. Overall, the emergence of different technological tools influences the efficiency of logistics operations.
4.7 Identification of contemporary digital tools and tactics to support the logistic operations
As per the objectives, when the participants were asked about the most important digital tools and tactics for supporting the logistics management operations in the case of oil and gas distribution then researcher recorded multiple responses and identified different software-based tools that could not only enhance the individual skills of logistic manager and other logistic management operations. In this regard, the Participant 1 stated that “The popularity of the Transportation Management Software (TMS) has been enhanced on significant manner in the contemporary logistics operations because it provides a great support in managing the transportation fleet that includes a variety of transportation channels such as trucks, pipelines, railways, and tanker ships to maximise the efficiency of transportation operations in the case of oil and gas derivatives.” In similar way, the Participant 2 determined that “Rout optimisation software has found the most reliable to manage different transportation route in which the logistic firms are able to manage the delivery schedule and routes with reference to client’s requirements”. In managing the timely transportation of oil and gas along with related products, companies Saudi consider different types of Transportation Management Software and Route Optimisation Software to enhance the productivity of logistics operations along with the avoidance of risk factors. Furthermore, the Participant 3 stated that “Companies pay extra attention on a variety of data-based management technologies to manage the large quantity of data about the production, demand of customers and efficiency of supply chain in which logistics managers also adopt different tactics of data analytics to covert the raw data into useful information.” For handling contemporary logistics challenge, the information management has been perceived as the most critical aspect to enhance the efficiency of logistics operations. Moreover, the Participant 4 stated that “The concept of clout computing provides a centralised storage of a variety of data that can be accessed by the managers of different departments in an organisation and it supports the logistics manager for managing the regular updates about the position and location of material so as companies could track their consignment in an appropriate manner through a centralised system”. However, the Participant 5 argued that “The continuous advancement in tech-based solutions may influence companies for upgrading their systems and other technologies that could enhance the expenditures of logistic companies associated with the oil and gas distribution”. Apart from that the warehouse management program plays critical role in influencing the efficiency of logistics operations. In this regard, the Participant 6 stated that “Warehouse Management System (WMS) has gained a significant popularity in the contemporary logistic operations because this tool assists logistics manager in managing the inflow and outflow of inventory with an appropriate stock level”. The evaluation of views of different participants determines that companies involved in the oil and gas distribution have to consider different types of tech-based tools to maximise the efficiency of logistics practices. During the current study, it was found that majority of the participants believe the role of distribution and logistics in the context of supply chain management has changed and enhanced significantly. The participants further stated that profitability of oil companies is largely dependent on the reliability of the supply chain networks, systems and frameworks used in the logistics operations. These results are similar to the findings of Christopher (2016). The authors found that the logistics department provides assurance to the management of oil companies regarding optimum integration of various modes of transport in order to effectively and efficiently manage both the domestic and international supply of the oil derivatives. Furthermore, the increase in the market competition and growing international business challenge have been considered key driver that influences the role of distribution and transportation in logistic management within oil derivatives. But the findings of Fletcher (2017) were different from that of the current results. According to the authors, the increase in market competition within both domestic and international markets influences companies for gaining the appropriate control over the oil transportation related expenditures to control the prices that may have direct impact over the pricing of different oil derivatives. On the other hand, according to Fu (2017), The efficiency of logistics operations provides assurance about the maximum productivity of whole supply chain system. Therefore, the comparison of views and arguments of different participants has disclosed the growing importance of logistics and distribution system within the supply chain of oil derivatives.
4.8 Assessment of different strategies for maximising the efficiency of logistic manager
For managing the contemporary logistics operations, different skills and professional expertise of logistics manager in which companies use different tactics and approaches for maximising the efficiency of logistic manager. This is because the negligence of logistic manager in the logistics management operations of oil and gas derivatives may leave adverse impact on the overall logistic operations. In this regards, the Participant 1 stated that“The consideration of advanced technologies and tools to support the training program for logistics managers so as they would be able to update their skills and professional expertise about the logistics management operations with reference to contemporary organisational trends.” With reference to current market trends, the tech-based training programs have been found very effective to enhance the professional skills and technical understanding of different software and other elements that may have direct impact on the productivity of logistics manager. Moreover, the Participant 2 stated that “The productivity of logistics manager is highly influenced by the efficiency and skills of logistic team so as companies have to consider several critical factors such as skills of team members, coordination among team members, allocation of roles and responsibilities, and others that may have a direct impact over the efficiency of logistics team.” Furthermore, the Participant 3 determined that “The application of structured planning approaches in development of different learning and development programs along with the team formulation process may have direct influence over the efficiency of logistics manager”. Therefore, the efficiency of logistics manager is aligned with several critical factors in which the personal skills of logistics manager along with the professional work environment are playing important role to achieve the productivity goals. Apart from that, the Participant 4 stated that “The regular monitoring of activities and performance of logistic manager with consideration of different performance management tools through which top managers can identify the deviations in the skills of logistics manager along with their productivity.” The performance assessment has been addressed as the most critical driver that may have a significant influence over the productivity management practices for the logistics managers. Apart from that, the Participant 5 stated that “Different companies adopt different on-the-job and off-the-job training modules for logistics managers that are involved in the oil and gas distribution operation that could avoid the negligence and risk of accidents”. Therefore, an appropriate training program would be found a very effective strategy to support the skills development practices for handling various critical tasks involved in the logistics of oil and gas derivatives. For managing the contemporary logistics operations, different skills and professional expertise of logistics manager in which companies use different tactics and approaches for maximising the efficiency of logistic manager. This is because the negligence of logistic manager in the logistics management operations of oil and gas derivatives may leave adverse impact on the overall logistic operations. In this regards, Pagano and Liotine (2019) stated that the consideration of advanced technologies and tools to support the training program for logistics managers so as they would be able to update their skills and professional expertise about the logistics management operations with reference to contemporary organisational trends. With reference to current market trends, the tech-based training programs have been found very effective to enhance the professional skills and technical understanding of different software and other elements that may have direct impact on the productivity of logistics manager. Moreover, Schönsleben (2018) stated that the productivity of logistics manager is highly influenced by the efficiency and skills of logistic team so as companies have to consider several critical factors such as skills of team members, coordination among team members, allocation of roles and responsibilities, and others that may have a direct impact over the efficiency of logistics team. Furthermore, according to Stough (2017) the application of structured planning approaches in development of different learning and development programs along with the team formulation process may have direct influence over the efficiency of logistics manager. Therefore, the efficiency of logistics manager is aligned with several critical factors in which the personal skills of logistics manager along with the professional work environment are playing important role to achieve the productivity goals. Apart from that, Tadejko (2015) stated that the regular monitoring of activities and performance of logistic manager with consideration of different performance management tools through which top managers can identify the deviations in the skills of logistics manager along with their productivity. The performance assessment has been addressed as the most critical driver that may have a significant influence over the productivity management practices for the logistics managers. Waters (2019) argued that different companies adopt different on-the-job and off-the-job training modules for logistics managers that are involved in the oil and gas distribution operation that could avoid the negligence and risk of accidents. Therefore, an appropriate training program would be found a very effective strategy to support the skills development practices for handling various critical tasks involved in the logistics of oil and gas derivatives.
CHAPTER 5: Conclusion
5.1 Summary
In the context of contemporary business environment, three critical components of supply chain contain purchasing, manufacturing and transportation in which supply chain manager considers several factors such as optimum utilisation of materials, production amounts, inventory management, configuration of distribution network, and shipping management. The effective transportation management is also termed as a competitive differentiation for a company that may have direct impact on the efficiency of supply chain. This is because the importance of transportation and warehouse managers should examine transportation within their supply chains. Ultimately, an appropriate transportation management has been found very effective for achieving the cost objectives. The transportation cost is being termed as 60% of total operational costs within the company's supply chain costs. Modern supply chain transportation managers deal with various risk factors for lowering the supply chain days. In dealing with several risk factors like shortage of material, system failure and deteriorating infrastructure, logistic plays a critical role in influencing efficiency of supply chain management. The transportation in the supply chain covers the ferrying a product from a supplier to customer or a distribution store through road, air, rail and pipeline or seas. In this context, logistic manager has to consider several variables such as cost of operations, transmission time, and nature of products. In this context, an optimum integration seems essential among consumer, carriers, suppliers and information flow. These variables have been found as the most pertinent issues within an effective supply chain. The transportation in the supply chain is being used to control costs in the business operations. This is because freight and fuel costs take up most of the logistic budget. In this context, logistic manager considers various variables in control the business expenditures in an efficient manner. However, several technologies enhance the transparency in the transport and logistics operations. In this context, the application of technologies and data increases the efficiency of transportation network and interacting with broader transportation ecosystem. Furthermore, an appropriate consideration of different cost drives plays a critical role in establishing the entire supply chain. It may have direct impact on the quality of customer services. This is because the transportation is emerged as the service product. The transportation has been found very effective to segment shipments in supply chain. In this regard, the prioritisation is being termed as the most essential element in the transportation system with reference to number of customers, time of year, supplier, level of urgency and importance of goods. The segmentation assists transporter in managing the complex issue so as the logistic manger would be able to assess the various alternatives in the transportation process. The logistics management is being addressed as an important element of the supply chain management that is responsible for planning, implementing, and controlling the efficient flow and storage of goods and services for attainment of different requirements of customers. Fundamentally, logistics management is identified as a tool to control and supervise the movement of different types of goods and it plays a critical role in influencing the efficiency and profitability of different agencies. An appropriate logistic management involves an appropriate combination of different factors that covers transportation management, management of freight and inventory, materials handling with optimum safety, schedule of delivery and order management. Therefore, the role of logistics management has been enhanced a significant in the contemporary global business operations that encompass the optimization processes through which companies are able to maximize revenues, cutting down the manual labour, information management, and exceed customer expectations.
5.2 Contribution
The finding of present study provides great support oil and gas companies in the logistics operations. The importance of logistic management has been enhanced on significant manner for oil distribution companies because oil industry operates in the global market and different commodities such as oil, gas, along with the petrochemical are need some specific modes of transportation that include pipelines, tankers, as well as railroads. Therefore, an efficient logistic management ensures the optimum utilisation of different modes of transportation with reference to nature of goods. The different oil commodities are producing in some specific or limited regions of the world, but the demand of oil derivatives has been found in all over world because represent s an essential source of energy as well as it is also acted as the raw material for various other industries. Therefore, this industry faces several problems in managing logistic management operations. For example, lead-time of several weeks from the shipping point to the final customers’ location has been found a very common problem in this type of industry. The great distances between supply chain partners incorporates the high variability of transportation times in the logistic operations hurt suppliers in the context of service quality levels and final customers in terms of safety stock costs. Furthermore, an appropriate logistic management system assists companies in managing different modes of transportation that are involved in oil and gas distribution such as ships, trucks, pipelines, and railroads. It establishes an appropriate coordination and optimum utilisation of transportation capabilities through different digital technologies to maximise the efficiency of logistic management practices. In the context of theoretical development, findings of this investigation would support the scholar in development of new approaches and theories to logistics management with consideration of different tools and techniques that could enhance the safety and security of logistics operations. Moreover, the consideration of outcomes of the current investigation will support scholars in establishing different theories for managing the negligence of logistic manager in the field of logistics and supply chain management. Furthermore, some new theories associated with the training and development of logistics manager with reference to negligence management could be developed to achieve different safety standards in the oil an gas transpirations.
5.3 Limitation
In the context of current study, researcher focused on the interviews in the primary data collection in which the appropriateness of research outcomes is limited to skills and professional expertises of staff members. In addition to that, the lack of quantitative data analysis created some issues for researcher for assessing the relationship among different variables to achieve the research objectives. In the current research, the researcher found the primary data collection as the time consuming process. Moreover, researcher was able to assess the perception of individuals only 6 members.
5.4 Suggestion for Future Research
With reference to current study, researcher should carry out the future investigation on the advancement in supply chain management technologies within logistics management. Moreover, researcher could carry out further investigation on the application of different software and cloud-based system in the field of logistics management. This investigation also covers the usage of different software in enhancing the effectiveness of logistics management operations.
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