Aiming for Efficiency in Procurement & Supply Chain Management (Part 1)

When Patrick Thrash was finishing his undergraduate degree at the University of Mississippi and moving to Houston, he was the only one headed in that direction. During his college years, he had never heard of procurement teams, and a good friend, whose father was an executive at Fluor, explained to Thrash what he did in procurement. From then on Thrash knew that was what he wanted to do.
 
By Brittani Schroeder and Sarah Bradley

Thrash was surprised when he arrived in Houston that there were, and still are, so many opportunities in the oil and gas industry. Professional procurement was new and Thrash decided to learn more about it and supply chain management, which had also become a topic of interest. Thrash had many interviews and received multiple offers for employment, and initially chose to be the Assistant to the Procurement Manager at McDermott.

“When you are young you move around to see what you like, and you see what opportunities come up,” Thrash explained. “I did go to work for Fluor a couple of years later, after that initial job at McDermott.” He was employed with Fluor for seven years—most of the 90s—working on petrochemical projects, including a Saudi Aramco project.

A Day in the Life

BP plc (formerly The British Petroleum Company) is a British multinational oil and gas company headquartered in London, England and one of the world’s seven oil and gas “supermajors”. Starting in 1909 with the discovery of oil in Persia, BP has transitioned over the years from coal to oil and continues to find oil and gas onshore, offshore and in the deepest waters of the earth, now moving onwards towards a new mix of energy sources as the world moves into a lower carbon future. The global energy company is focused on meeting the world’s need for energy, while at the same time reducing carbon emissions. From deep sea to desert, from rigs to retail, the company covers a lot of ground.

Thrash began his career with BP in 2009 and after wearing several different hats in his time with the company is currently the Subsector Manager - Drilling, Global Wells Organization. “There is an exploration side of the job where we are drilling exploration wells and appraisal wells before we produce them and build production facilities to support them,” explained Thrash. Sometimes we drill exploratory wells. Other times, we are validating earlier successful exploration wells. Thrash is a part of the procurement and supply chain management organization specifically managing the “Drilling Subsector” team focused on drilling services and tubular products.”

“There are upper and lower completions where we are solidifying what we have drilled into a permanent wellbore. Interventions are when we go back into a well that we have already interacted with and we have to do something additional to it. Interventions help extend the commercial life of the well.” said Thrash.

A typical day starts with a phone call. Thrash and his team are on the phone for most of their workday, supporting the nine regions around the world over seven time zones. For some employees, their mornings start at 4 AM, and for others it ends at 8 PM. First thing in the morning they are on the phone with Azerbaijan and Oman because they are nine hours ahead. “We try to be as flexible as we can to keep up with all the different time zones,” Thrash said. He explained that he has several clocks on the walls to try and assist with figuring out the time differences. “We also have teammates in Malaysia, and they are thirteen hours ahead of us.” As most of the phone calls are made by early afternoon, by 2 PM Thrash and his team can have their internal meetings and work with the Gulf of Mexico region.

Searching for Efficiency

“I have always liked to make things better, and that is what drew me to supply chain,” Thrash said. “When you are young you like to take things apart and put them back together, and that is what supply chain is, in a way.” Thrash’s favourite college courses were the ones where he got to think creatively. He does not describe himself as very artistic, but being able to think of alternative ways to get tasks done is interesting to him. For someone who just wants to go to work and push the paper down, Thrash explains that they will not last long in supply chain. People working with the supply chain team are constantly trying to do things more efficiently, while also keeping safety in mind.

Working in supply chain management means looking at things differently than the engineers and the manufacturers typically would. The engineers make sure that the valve does what it needs to do and will be safe, but the supply chain team looks at where the valve comes from, whether there is a good contractual relationship with the manufacturer, and if there are things that the engineers could have missed. Thrash is able to take a step back from it all and evaluate the whole situation, instead of being focused in on one thing. Thrash explained, “That is the fun part about the job.”

Thrash compared working on the supply chain team to a Harvard Business case. In each Harvard Business case published, there is always a problem, a solution, and how they got there. “When you are just starting out, you might only be working on a valve or a package of valves. As you get further on, however you might be looking at the whole category of valves, and you really understand how the whole business works.” One of the very first items Thrash bought was a “humongous valve” that was eight feet tall, and Thrash wondered “How does that even work?”

Challenges to Face

There is a little bit of difficulty for Thrash and his team when it comes to getting their suppliers to see things in a different way. BP has a lot of strategic working relationships, but there is sometimes an issue where companies see themselves only as manufacturers, rather than being a part of a larger industry. The challenging part is getting those companies to change their mentality from, “we need to increase revenue every year” to “we need to find a way to do things cheaper year over year for our partners.”

Thrash emphasized that he is not trying to get companies to provide services for free, but he did caution that if companies will not be inventive in their ways to cut costs, other companies will—and will get Thrash’s business. “Right now, many oil and gas suppliers may think that ‘since I sold this last time at say ‘$2,000’, I need to sell it at $2,100 now. What they should be doing instead is thinking of ways to bring that cost down to $1,900 or get creative and introduce radical thinking to get the cost down to $1,000 using technology, low cost country sources, or other out of the box thinking.”

 

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