The energy sector is under intense scrutiny. With wholesale energy prices rocketing and pressure to move away from fossil fuels to a more sustainable, green energy. The impact of the recent Russia-Ukraine war and the COVID-19 pandemic was largely out of the industry’s control. However, the need for resilience in global supply chains has hit organisations more than ever.
Poll results
In our most recent LinkedIn poll, we asked our social media followers what they thought the biggest supply chain issue was in the energy industry in 2022.
Energy industry supply chain issues: what we found
Unpredictability
Of those that responded, 33% cited unpredictability as the joint biggest issue in the energy industry supply chain in 2022.
Most organisations are keen to build as much resilience as possible into their supply chains to help with the pressure of fluctuations. However, the rate of change driving the energy transition is difficult to keep up with. With increasing costs, the importance of oil and gas is unknown. With climate change activism, enhanced news coverage and government intervention, it’s unknown what is next for the energy issue and also how it impacts the supply chain.
Government energy regulations
The second joint highest response with also 33% is government energy regulations.
As a result of increasing public expectations and interest in the environment, there is a heightened demand for environmental regulations within the energy industry, pushed forward by the government. While the Covid pandemic and record breaking heat in the summer of 2022 heightened public awareness, organisations will need to brace themselves for upcoming regulations. There will therefore be a need to implement these within time scales set out externally, at unknown cost.
Changes in energy production
22% of respondents highlighted changes in energy production as their biggest energy industry supply chain challenge of 2022.
Energy transition is the sector’s global shift from fossil-based systems of energy production and consumption to renewable energy sources, like wind and solar. As the world begins to set deadlines to the carbon zero initiative, organisations therefore need to follow closely behind as the changes to energy production happen.
Other
Finally, 11% highlighted ‘other’ as what they thought the biggest supply chain challenge facing the energy industry in 2022 would be.
This could be global supply chain visibility. Without centralised visibility and management, blind spots become unpredictable and projects become subject to disparate processes across multiple vendors. This puts heightened strain, both for cost and time on organisations operating in this industry.
One thing’s for sure within the next year: budgets will become tighter. From polysilicon used in solar panels, to aluminium, and freight charges. These are all adding pressure to profitability for organisations. Unexpected costs when projects don’t go to plan, such as parts arriving late, can also erase profit margins.
Learn more about how B2BE can support the Energy Supply Chain.
More information
B2BE’s experience in the supply chain sector allows our customers to build, expand and adapt successfully, enabling greater effectiveness. To engage with B2BE and offer feedback on what matters most to you and your business, make sure to follow us on LinkedIn and across social media. You can also vote in our latest LinkedIn poll. If you’d like to discuss your supply chain strategy, get in touch with us.