IO Material Services
What is the goal of IO Material Services?
We founded IO Material Services in 2017 in response to the growing demand from oil & gas and industrial companies to achieve a greater than 50% reduction in their supply chain cost structures. IOMS delivers supply chain solutions that specifically target conditions where negative cost performance is prevalent due to cost and quality of market choices, local infrastructure availability, and complexity of the operating environment (geopolitical, local community requirements, local content, etc.)
Our goal is to drive the adoption of logistics innovation common in the FMCG industry into the oil and gas sector and other heavy goods industries such as renewable energy and mining. We have the capabilities and expertise to provide the efficient benefits of innovation and technology enjoyed by brands such as Amazon into the oil and gas industry. We provide last-mile fulfilment services to the oil and gas assembly line.
What was the impact of the pandemic on your industry?
The initial impact was a slowdown in all activities. In Nigeria, our main operation market, there was an ongoing crisis in the oil and gas industry due to falling oil prices and regulatory issues around the Petroleum Industry Bill. The pandemic worsened global oil prices and the ongoing crisis and was devastating for our startup.
Conversely, indirectly, Covid-19 was instrumental in pushing automation and technology adoption in the oil and gas logistics sub-sector which had previously depended on a manual, paper-based approach. In a lot of ways, oil and gas logistics are disorganised. As a none core area of the oil and gas sector that is yet managed in-house by the majority of oil and gas firms, the subsector is prone to significant wastages and inefficiencies. During the lockdown, oil and gas firms and regulators become more interested in the change process required to automate logistics in the oil and gas industry and close procurement deals virtually. Since the pandemic, we have witnessed the growth of a virtual supply.
The modality of logistics in the oil and gas industry has evolved in the past few years. The warehousing model which was based on one-location assembly and warehousing has become a lot more flexible. One-stop massive assembly points are giving way to dynamic sourcing, local sourcing and just in time sourcing pathways. As a result, local firms are becoming more involved in the supply of inputs in the oil and gas sector, which is good for the industry. Not all the materials come from overseas anymore, thus the classic assembly point model has become a lot more diversified
What are the Oil and Gas Industry Priorities after Covid-19?
Optimisation has become a front-burner issue in the industry for years and even more so since the pandemic. NAPIMS started the Nigeria Upstream Optimisation Process ‘NUCOP’ as a means of driving integration and optimization across the industry. The union of oil-producing companies in Nigeria also has an initiative with the purpose of creating savings together.
Cost reduction has always been a topical concern in the oil and gas industry and this concern became even more urgent due to the pandemic which led to a free fall in oil and gas prices. Covid-19 gave the last push, the industry is no longer just looking at cost reduction as an option it has become an important priority. From both a regulatory and private sector perspective, there is a commitment to sustaining a $20 per barrel industry and that affirms a place for a logistics services provider like IO materials to create a lot of value through technology and process improvement in the logistics supply chain.
How has this affected your organisation?
We believe we are at the right place and time for the shift in the oil and gas industry. We are partnering with the oil and gas sector not only to provide consulting services but to also operationalise innovative supply chain processes to drive efficiency gains on behalf of the industry players. Logistics is really problem-solving, and that is our area of expertise.
We believe the oil and gas industry is a critical sector that will remain relevant for years to come. The meaningful impact will come from automating the oil and gas logistics sub-sector, combined with environmentally friendly processes.