Supply Chain Integration of Procurement and Logistics Operation for Enhancing Operational Competencies: a Case Study of Malaysia’s Oil and Gas Company

Tie, Ting Huat and Cheng, Sheila (2015) Supply Chain Integration of Procurement and Logistics Operation for Enhancing Operational Competencies: a Case Study of Malaysia’s Oil and Gas Company. Paper presented at the AeU International Research Conference. pp. 1-11.

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Abstract

Studies indicated that supply chain integration (SCI) increases the operational competencies. Over the past 34 years, various form of integration such high integrity information exchange, strategic sourcing has been studied and evidenced in operational performance improvement. The local contractors/service providers for project of Hook Up and Commissioning (HUC) already experienced almost 15 years‟ expansion since year 2000 in Malaysia‟s oil and gas industry. However, SCI of procurement and logistics operation till today has not been fully implemented in Malaysia‟s oil and gas industry. This study explores the practice of SCI if it has been fully implemented between procurement and logistics operation over the past 15 years in Malaysia‟s oil and gas industry. Contract term of Engineering, Procurement, Construction, Installation and Commissioning (EPCIC), from the process of HUC to cargo manifest/consignment of goods (COG) and finally to custom declaration through appointed 3rd party logistics agent is the focus of this study. An in-depth qualitative case study including questionnaires, field observation, and various type of documentation is employed to explore the actual practice of COG preparation. The findings of this study indicated that there is no standardization in information interpretation due to personnel incompetency and results in inaccuracy of reporting. There is also lack of high integrity information sharing between procurement and logistics operations. The existing inefficient practice of SCI between procurement and logistics operation increased various wastages therefore reduces the operation competencies. The findings of this study contribute to provide operational performance improvement to the EPCIC contractor particularly in HUC growth in Malaysia‟s oil and gas industry, as well as applicable to offshore drilling operation, subsea operation and services, installation operation, and other types of oil and gas operation.

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