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Optimizing Gas Supply Chain: The Power of Supply Chain Digitization

Date: Jul 25, 2023

Ⅰ. Introduction

With the continuous development of the global economy and the acceleration of industrialization, gases have become an essential industrial raw material and energy source, making the effective management of their supply chain crucial. The optimization of the gas supply chain aims to ensure supply stability while achieving efficient resource utilization and cost minimization. Supply chain informatization, as a critical technological approach, offers innovative solutions for optimizing the gas supply chain.

Ⅱ. Challenges in the Gas Supply Chain

The gas supply chain encompasses various stages, including procurement, production, storage, transportation, and sales. Due to the diversity and complexity of gas demand, it poses significant challenges to the entire supply chain. These challenges primarily revolve around three aspects: supply stability, operational costs, and transparency.

1. Supply Stability

Supply stability is a crucial foundation for the development of various industries, but the gas supply chain is often vulnerable to fluctuations due to factors such as supply and demand dynamics, weather conditions, and policy changes. Any disruptions in gas supply, whether it's shortages or excess supply, can have severe impacts on both upstream and downstream industries. To mitigate the risk of sudden interruptions in the gas supply chain, gas consumers typically maintain relationships with multiple gas suppliers to minimize the risk of supply chain disruptions. This diversification of suppliers helps ensure a steady and reliable supply of gases even in uncertain circumstances.

2. Operational Costs

The diverse nature of gas demands results in different transportation and storage methods, which, in turn, increases operational costs. Reducing operational costs becomes a crucial challenge for supply chain managers. High operational costs in the gas supply chain primarily arise from logistics and transportation expenses, as well as the use of high-pressure storage containers.

During transportation, gases require specialized equipment and containers to ensure safety and stability. The purchase, maintenance, and transportation of such equipment and containers contribute to the overall supply chain costs. Additionally, many gases need to be stored and transported under high pressure, necessitating storage and transportation facilities capable of handling high-pressure requirements, which are typically expensive to establish and maintain.

Furthermore, resource wastage, safety and environmental compliance requirements, and long-distance transportation demands can directly or indirectly increase the overall costs of gas supply chain operations. Implementing efficient supply chain practices, optimizing transportation routes, and employing advanced technology for storage and handling can help reduce operational costs and improve the overall efficiency of the gas supply chain.

3. Supply Chain Transparency

In traditional supply chains, information flow is often slow and requires multiple stages of transmission and processing, leading to information lag. This lack of real-time information makes it challenging for supply chain managers to have timely insights into the current state of the supply chain and take appropriate actions. This issue is particularly pronounced in multinational supply chains involving multiple countries and regions. When problems arise, it becomes difficult to address them promptly, and the lack of transparent traceability hinders quick identification of the root causes or quality issues.

III. Supply Chain Informatization

Gas supply chain informatization refers to the process of applying modern information technology to the management of gas supply chains. Its objective is to achieve data sharing, real-time monitoring, and accurate prediction at various stages of the supply chain through digitization and intelligence. This optimization of the supply chain operations enhances efficiency and reliability. Gas supply chain informatization comprises four main aspects: real-time monitoring and tracking, intelligent prediction and planning, transportation optimization, and user feedback and improvement.

1. Real-Time Monitoring and Tracking

Gas supply chain informatization establishes a supply chain management platform to enhance efficient and accurate data sharing and connectivity between upstream and downstream enterprises. Utilizing Internet of Things (IoT) technology, sensors, and other devices, it enables real-time monitoring and tracking of gas production, transportation, and storage processes. This allows companies to promptly identify issues, take swift corrective actions, strengthen collaboration among enterprises, and improve the overall coordination efficiency of the supply chain.

2. Intelligent Prediction and Planning

Leveraging big data analysis and artificial intelligence algorithms, certain supply chain enterprises can perform intelligent forecasting of gas demand and market trends. This provides businesses with more accurate production and sales plans, thereby reducing inventory risks and resource wastage. For gas-demanding customers, it allows for a more precise understanding of gas suppliers' availability, mitigating the risk of production stoppages caused by gas shortages.

3. Transportation Optimization

Transportation optimization in the gas supply chain involves a series of strategies and measures aimed at reducing operating costs, enhancing transportation efficiency, and minimizing resource wastage and environmental impact. Whether it's route planning, vehicle selection, scheduling, or distribution, utilizing supply chain informatization technology and Geographic Information Systems (GIS) allows for a more intuitive display of the transportation process, facilitating gas suppliers in saving transportation costs.

Moreover, real-time monitoring during transportation enables the timely identification and resolution of potential issues. Additionally, risk assessment and management for possible transportation-related risks and safety concerns can be conducted, ensuring the safety and reliability of the transportation process.

4. User Feedback and Enhancement

Traditional gas supply chains face challenges in collecting user feedback. However, with gas supply chain informatization, two-way communication channels are established between enterprises or organizations and their customers to obtain feedback, opinions, suggestions, and evaluations regarding products and services. This significantly reduces the cost of gathering customer feedback and provides valuable insights for continuously optimizing and improving supply chain management.

After implementing improvement measures, companies need to continuously monitor and evaluate the effectiveness of these changes. This can be achieved through methods such as customer satisfaction surveys and monitoring of performance indicators. By monitoring and evaluating, companies can understand the impact of improvement measures and make timely adjustments and optimizations to enhancement plans. The process of improvement and enhancement is continuous. Companies need to listen to customer feedback and suggestions continuously, continuously optimizing supply chain management to adapt to changes in the market and customer demands.

IV. Outlook

Gas supply chain informatization involves applying modern technologies to gas supply chain management, enabling data sharing, real-time monitoring, and intelligent decision-making. As technology continues to advance, the comprehensive digitization, application of blockchain technology, Internet of Things (IoT), and intelligent logistics will bring about more efficient operations, more accurate predictions, and optimized distribution strategies in the gas supply chain. This will enhance customer satisfaction and promote sustainable development, propelling the gas industry towards a future that is intelligent and environmentally friendly.

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