Oil Update: Harder to Stay the Course

This is an excerpt of the original article. It was written for the January-February 2016 edition of Supply Chain Management Review. The full article is available to current subscribers.

January-February 2016

It’s a new year. Most of us will have new budgets to meet and new expectations for the performance of our supply chains. Many will look to best practices from industry leaders to improve our operations. But, are best practices really the “best” way to go? As you think about 2016, I hope you ask the question: What better practices can I adopt for my supply chain?

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I am an early “Baby Boomer” who grew up in the 1960s during the hippie generation. While I was never a hippie—I was too engineering-minded and practical—one thing that has stuck with me from that era is the idea of energy efficiency, especially oil-based energy.

Oil-based Experiences
This mind-set stemmed from the Arab Oil Embargo in the early 1970s. I was a graduate student during those years when gasoline was being rationed. I remember once when my Volkswagen Bug’s gas tank was almost empty and I was desperately looking forward to the day when I could get gas. I worried I’d get stuck on the road running on fumes.

Since then, I have remained conscience of fuel efficiency when buying cars and practice energy efficiency at home. And, I’ve always maintained an eye on oil prices as an interest. However, when I joined MIT to launch the Supply Chain 2020 Project, I was quick to surmise that oil prices were starting to rise steadily. Because of that, I knew that oil prices would be a major factor affecting supply chains in the future. For that reason, the project included research about the potential impacts of oil prices.

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