Supply Chain Management

Supply Chain Management

Introduction

Supply chain can be interrelated to a value chain. It is an entire process that provides value to the raw materials in producing the finished goods or service. In an operations management perspective, the role of a business organization is to transform raw materials into finished goods. (Engardio, Kripalani 2003)The finished goods must have more value in order to gain profit. A supply chain is thus considered as a web of interrelated processes, departments and processes to be able to transform raw materials into finished goods and deliver these to customers (Russell 2000). It involves all of the functions, activities and facilities that are included in producing a product from the supplier, brokerage, handling in of stocks to the warehouse, storage, delivery of the stocks, after sales management and inventory stock level monitoring. Because supply chain involves almost all functional unit of the business, its design must be lean and must be part of its strategy. One of the most known and important goal of supply chain management include on-time delivery of goods, healthy inventory levels and zero inventory management.To successfully expand local content, Nigeria has to have an understanding of the needs of the petroleum sector and an objective baseline assessment of its own domestic capacity, both human and industrial/enterprise capability. At the time oil was discovered in the North Sea, the U.K. was a leading industrial country with a well educated and technically trained workforce. The economy was well supplied with manufacturing, shipbuilding, and engineering firms. (Green 2001)

Discussion

Local content means value addition activities taking place in Nigeria. In this sense, a 'Nigerian' company is any company with ownership and/or infrastructure in Nigeria that allows it to conduct manufacturing and service production in the country. Local value addition will then be directly linked to the magnitude of manufacturing and service production that is taking place in Nigeria. Thus, two interrelated processes are required, that both will contribute to local capacity expansion. One is to stimulate the development of indigenous companies; the other is to encourage foreign investments and participation. These two processes are key to how local content is increased by the collective and collaborative efforts of both the oil and gas companies and the government. It takes both to build industrial capacity that will increase local content in a viable and sustaining manner. As the world's fourth largest oil exporter, Nigeria's proven oil reserves range from 25 to 35.2 billion barrels, with current production at close to 2.3 million barrels per day. (Russell 2000)In this paper we have highlighted the UK and Nigeria supply chain performance and obstacles in the gas and oil, and automotive industry.

Extent Of Subject Area And Scope

Yet, after decades of significant petroleum development, Nigeria still relies on international oil companies and foreign contractors for 95 percent of this activity.

Nigeria's main obstacles to development of local content are its thin industrial base, the lack of adequate power, water and other infrastructure to support an expanded manufacturing base, ...