According to the latest procurement market intelligence report from Technavio,
the global
fuel oil utilities market is expected to grow at a CAGR
of approximately 3% over the next five years due to the growth of
transport infrastructure in developing economies.
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Technavio has published a new report on the global fuel oil utilities market from 2017-2021. (Graphic: Business Wire)
The research report titled ‘Global
Fuel Oil Utilities Market: Procurement Market Intelligence Report
2017-2021’ provides an in-depth analysis of category spend, best
procurement practices and cost saving opportunities, aimed at helping
organizations achieve superior business performance. The report also
provides insights on pricing, supplier positioning, and top companies,
enabling sourcing professionals to improve their competitive advantage
through procurement excellence.
“The growth is predominantly driven by increased demand for fuel oil
in ground transportation and aviation sectors. The demand for fuel oil
is high in developing countries of APAC such as China, India, Thailand,
and South Korea as these nations are investing heavily in transportation
and power generation infrastructure,” says lead Technavio
procurement specialist Angad Singh for category
spend intelligence. “Fuel oil suppliers have invested heavily
in advanced technologies such as automated drilling and 3D seismic
imaging techniques to reduce costs of production and subsequently
increase profit margins for refined fuel oil products,” added Angad.
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Cost saving opportunities in fuel oil utilities
The adoption of various cost optimization levers helps buyers of fuel
oil utilities realize cost savings and achieve category management and
value benefits (including the reduction in procurement complexities).
Technavio procurement experts have segmented the cost saving
opportunities in the fuel oil utilities market into the following
value-enhancement opportunities:
-
Adoption of technology
-
Supplier Competition
-
Adoption of negotiation strategies
-
Optimization of procurement practices
-
Bundling of services
Adoption of technology saving aspects
Oil explorers use seismic surveys to produce detailed images of the rock
types and their location beneath the surface of the earth. Explorers use
this information to determine the location and size of oil reservoirs.
3D seismic techniques help suppliers to locate reserves that were
previously missed by less sophisticated techniques. Also, this technique
gives scientists better information regarding the subsurface before
drilling.
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Optimization of procurement practices saving aspects
Buyers should list down the quantity, grade, and variety of fuel oils
that is needed from fuel oil suppliers. Buyers should assess the
economic and political conditions of the suppliers' location since it
may affect the production and supply of fuel oil.
Buyers must ensure that suppliers adhere to their committed delivery
time and that they implement measures that can minimize turn-around-time
for buyers' operation. Buyers should assess countries with low operating
costs (local commodity costs, labor charges) as an alternative sourcing
destination.
Bundling of services saving aspects
Buyers prefer to engage with fuel oil suppliers that can provide a
continuous supply of fuel oil through safe transport systems (tankers,
railroads, or pipelines) during the term agreed on in the SLA. Suppliers
should ensure that right quantity (bpd or tanks per day) of fuel oil is
delivered to buyers on a daily basis.
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About Technavio
Technavio
is a leading global technology research and advisory company. The
company develops over 2000 pieces of research every year, covering more
than 500 technologies across 80 countries. Technavio has about 300
analysts globally who specialize in customized consulting and business
research assignments across the latest leading edge technologies.
Technavio analysts employ primary as well as secondary research
techniques to ascertain the size and vendor landscape in a range of
markets. Analysts obtain information using a combination of bottom-up
and top-down approaches, besides using in-house market modeling tools
and proprietary databases. They corroborate this data with the data
obtained from various market participants and stakeholders across the
value chain, including vendors, service providers, distributors,
re-sellers, and end-users.
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