Regina – “We start at the rock, and go all the way to the pipeline,” said Celine Gerson, president of Schlumberger Canada.
She was speaking at the 4th Annual Saskatchewan Oil & Gas Supply Chain Forum, hosted by the Saskatchewan Industrial & Mining Suppliers Association Inc. in Regina on Oct. 4. She was talking about how they manage their supply chain and suppliers.
Schlumberger is the largest oil and gas service company in the world. It was founded by two brothers in France who invented wirelines technology.
“We’re located in over 85 countries, so pretty much, wherever there is oil and gas, we have operations,” she said, adding Schlumberger has over 100,000 employees and over 145 nationalities working for them, and that gives them diversity of thinking.
“We’ve been here for 90 years, and Canada is the place to invest,” she said.
“We are challenged right now, but this is a huge market.”
Gerson said Schlumberger has 84 locations in Canada, with seven core locations. They operate approximately 2,200 units in their Canadian fleet.
The company recently integrated Cameron International Corporation.
Their Canadian workforce is currently 15.7 per cent women, and 2.3 per cent Indigenous. She said their respective targets for those two demographics are 25 per cent and five per cent, respectively, by 2020.
Schlumberger is working with a “hybrid model” for its supply, with central sourcing and supply centres around the world, but also boots on the ground with local intelligence.
“The key message here is the digitalization. Everything from clicking the one click, which triggers a demand, all the way to delivery, is tracked with very complex digital systems. So we know where everything is. We know when some products have been sitting in distribution centres for more than 90 days, and will need to be redistributed where in the world. Everything is tracked,” she noted.
Any supplier they partner with will be required to have some sort of digital platform.
Three corporate goals are cost reduction, service level and working capital. On service levels, total lead time, request from final delivery, is to be reduced to less than 90 days, and their on-time delivery target is above 90 per cent.
“Anything sitting on the shelf is carefully tracked,” she noted. If something is not available in Canada, it can be brought in from around the world.
Free cash flow is another leading point. “We’re looking at models, such as consignment, better-managed inventories, and payment terms are of course very important,” Gerson said.
“How can you differentiate yourself by providing a best-in-class customer experience?” she posed. This goes for internal customers and external suppliers.
In Canada, last year, Schlumberger spent $276 million, of which $160 million was in chemicals. Logistics accounted for $49 million, $28 million in drilling and evaluation and $16 million in facilities.
In 2014, she pointed out, Schlumberger had three times the current spend it has today.
She just signed a new policy mandating their local indigenous spend in Canada, a number that will increase each year.
During the downturn, that focus had diminished, as best price was the most important. “It was survival mode, more than ever before,” she noted. By 2015, Schlumberger’s reported spend was “pretty pathetic,” she said bluntly. “$27,000, nothing to gloat over, that’s for sure.”
One of the things Schlumberger has done to address this focus is to create standardized support tools to further enhance visibility. They are going to incorporate Indigenous engagement qualifiers in all candidate packages. Their digital tracking will allow the company to be much more proactive and purposeful when it comes to their spend with Indigenous communities.
By 2017, their spend in this regard was $7 million, and in 2018, it will be close to $15 million.
To become a supplier, she said they have global procurement centres. They also have local boots on the ground, with a whole team of procurement and sourcing people in Canada, focusing on local sourcing for local needs. Recent tariffs, for instance, has Schlumberger looking for local suppliers in Canada.
Chemicals, transportation and logistics are key.
“We love thinking outside the box,” Gerson said.
“Schlumberger is a technology company,” she said. It spent $800 million last year in research and development, most of which was in software and digital.
“Think about how you can differentiate yourself to demonstrate efficiencies and visibilities as a supplier. Those are our key messages I want to be sure you come out with,” she concluded.