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BFF - Not!

By Art van Bodegraven | 05/17/2010 | 8:32 AM

The tragic and catastrophic Gulf oil spill has, regrettably, some vital lessons for the world of business relationships in supply chain management.  At the risk of trespassing on Chuck Taylor's turf, let me 'splain.

BP Plc, the well's majority owner, gets most of the ink.  They're on the hook for the entire cost of clean-up, plus $75 million in other damages.  Seems a paltry sum to compensate for the destruction of entire industries, ecosystems, and people's lives and livelihoods.  Under pressure, pun intended, BP has quickly pointed the fickle finger of blame at Transocean Ltd, the well's driller and operator, blaming "their systems, their people."

Transocean - no fools, they - quickly downloaded responsibility to its subcontractors, specifically naming Halliburton (the #2 oilfield services company) and its cement casing work.  They claimed that they had made no errors,  but the issue might be moot because BP had indemnified Transocean in their contract.  Halliburton counter-punched with an unequivocal statement that the cement work had been completed on time and had been tested, showing that the work had been "properly" done.

Meanwhile, the well's blowout preventer, which did not cause the spill, but failed to prevent the lethal blast, was found to be leaky and less-than-100% reliable.  It's manufacturer, Cameron International Corporation has seen a 25% drop in its stock value.  But, according to some, Transocean was responsible for the BOP's maintenance.

In a public move worthy of Pontius Pilate, Anadarko Petroleum, the well's 25% owner claims to have had nuthin' to do with nuthin' in that they merely approved a budget amount, relatively late in the process.  Btw, the Federal government's Minerals Management Services seems to have at least a finger in this dog's breakfast, as well.

Are these the kinds of moves made by genuine partners in open, collaborative supply chains, integrated and synchronized to work together in delivering product, quality, and value to ultimate customers?  Or, are these the behaviors of companies that don't know how to create and maintain sustainable business relationships for the greater good of both themselves and their customers?  No matter that the supply chains involved are focused on infrastructure build and maintenance, and not on the delivery of consumer goods.

I'm betting that what we are witnessing, in the midst of a disaster, is a chilling illustration of short-term, "git 'er done" transactional relationships that take the money now, and the devil take the hindmost.  I'm also betting that the sinister dance will become more complex, with more intensity, and with more entities involved as more commas work their way into the total price tag.

What do you think?

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About Art van Bodegraven

Art van Bodegraven

Art van Bodegraven (1939 - 2017) was Managing Principal of the van Bodegraven Associates consultancy and Founding Principal of Discovery Executive Services, which develops and delivers supply chain educational programs. He was formerly Chair of the Supply Chain Group AG, Partner at The Progress Group LLC, Development Executive at CSCMP, Practice Leader with S4 Consulting, and a Managing Director in Coopers & Lybrand's consulting practice. Concentrating in supply chain management and logistics for over 20 years in his 50+ year business career, he has led ground-breaking strategic, operational, and educational projects for leading US and global clients. Art was principal co-author of DC Velocity's Basic Training monthly column for a decade, and was the principal co-author, with Ken Ackerman, of Fundamentals of Supply Chain Management, the definitive primer in the field. His popular blog, The Art of Art, has been a staple of DC Velocity's web site since its inception.



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