Supply chain and collaboration crucial to weathering economy

If your company has closely examined supply costs in light of reduced revenues, you're not alone.

In a recent survey of Alberta energy insiders, more than 42% of respondents said they would look to new suppliers or ask existing suppliers to trim prices as a way to control costs in 2019.

This finding in the 2019 Energy Services and Supply Outlook Study comes as no surprise to Patrick Etokudo, General Manager of Supply Chain Management at Sherritt International. He asserts managing costs in the supply chain world is essential but needs to be done the right way.

"It is crucial to every supply chain manager to keep costs under control," says Etokudo. "Managing costs - for the right quality and right quantity of product or service — is critical for long term profitability."

The key, says Etokudo, is working with the supplier — not just holding a pencil sharpener over their heads and demanding cuts.

"Working with suppliers, who are the experts in what they do, and challenging them to reduce waste, improve productivity and innovate — those measures reduce total costs and are the right things to do," counsels Etokudo.

"Unilaterally and arbitrarily asking them to shave their margins to trim costs will look good in the immediate term, but could be disastrous in the long run."

And, he adds, "actively managing contract performance has to be a given."

"Transformational" learning

The Supply Chain Management (SCM) major is one of the newest majors in SAIT's Bachelor of Business Administration (BBA) degree in the School of Business and is already showing great promise as a meaningful contributor to Calgary's energy sector.

Etokudo is a strong advocate for what this degree offers companies who hire supply chain professionals. He's so committed, in fact, he joined the Program Advisory Committee (PAC) to lend his expertise to the Supply Chain Management faculty.

"I think SAIT's Supply Chain degree has an edge over most," says Etokudo.

"It combines real-life practical application with a sound theoretical foundation. Graduates arrive in the workplace shovel ready, having been exposed through various programs to industry practice. The ability of industry to inform curriculum through the PAC makes the graduates immense assets to employers."

Program graduate, Eric Ko, is now a category analyst for exploration, wells and construction at Husky Energy. He says his SAIT BBA degree set him up for success, calling the experience "transformational."

The degree provided Ko with skills he puts to use everyday communication, business acumen and advanced numeracy literacy, among others. He credits the program's course material for providing insight into "what's really going on out there."

Now that he's in the supply chain world, he echoes the survey findings when it comes to cost containment.

"Managing costs and optimizing the supply chain is critical in order to remain competitive and mitigate uncertainties," says Ko.

"In the current energy sector post-2014, companies are diligently managing their operational/capital expenditures to not only leverage their profits but enhance resiliency to the cyclical nature of the business."

Collaboration is vital

The Energy Services and Supply Outlook Study also revealed more than half of respondents felt internal collaboration was their best bet for weathering the economic downturn. In other words, relying on the existing strong talent within the company would yield the best opportunity for strengthening the business.

It is precisely this sort of faith in human capital SAIT points to during times of economic uncertainty, speaking as it does about the importance of a trained and innovative workforce.

How can SAIT and the oil patch work together to foster greater talent, and therefore more profitable collaboration?

"I could only argue for more exposure of students to the energy sector prior to their graduation," says Etokudo. "I believe the energy sector should offer more opportunities for them through co-op programs, internships, summer jobs, etc."

Looking to future possibilities, Etokudo has big ideas when it comes to SAIT and industry working together.

"I am hoping SAIT can provide consulting services to organizations, including training and project-type problem resolution in joint effort with employees," says Etokudo.

"This allows employees to learn from current theories and science, while bringing experience and skill to the table - to the benefit of the students and faculty. What a winning formula that could be."

Learn about SAIT's Bachelor of Business Administration Supply Chain major.