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Collaborative mechanism of project profit allotment in petroleum engineering service chain with customized integration

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  • Ding, Huiping
  • Chen, Xiangbo
  • Lin, Kuanhai
  • Wei, Yunbing

Abstract

The framework of implementing oilfield project is viewed as an engineering service chain consisting of serial different links supplied by multiple service providers in their specialized technical fields. It is the challenge for an oilfield project proprietor to ensure the consistency of accountability for quality performance of engineering services and acceptance of time limit for the project. This paper, from the view of general contractor as a group company, focuses on the tradeoff analysis of two different business strategies that are independent integration strategy and customized integration strategy, in which the factors affecting their comparative advantages are studied. The mechanism of how to distribute project profits between members of the engineering service chain is investigated. Our findings show that the optimal solution presents win-win profit distribution through the negotiation of outsourcing prices between the general contractor and multiple service providers (subcontractors) under coopetition strategy which characterizes the development trend of petroleum industry.

Suggested Citation

  • Ding, Huiping & Chen, Xiangbo & Lin, Kuanhai & Wei, Yunbing, 2019. "Collaborative mechanism of project profit allotment in petroleum engineering service chain with customized integration," International Journal of Production Economics, Elsevier, vol. 214(C), pages 163-174.
    • Handle: RePEc:eee:proeco:v:214:y:2019:i:c:p:163-174
    DOI: 10.1016/j.ijpe.2019.04.002
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    References listed on IDEAS

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    2. Bernhardt, Dan & Liu, Qihong & Serfes, Konstantinos, 2007. "Product customization," European Economic Review, Elsevier, vol. 51(6), pages 1396-1422, August.
    3. Ngniatedema, Thomas & Shanker, Murali & Hu, Michael Y. & Guiffrida, Alfred L. & Eddy Patuwo, B., 2015. "Late customization strategy with service levels requirements," International Journal of Production Economics, Elsevier, vol. 166(C), pages 72-84.
    4. Da Silveira, Giovani & Borenstein, Denis & Fogliatto, Flavio S., 2001. "Mass customization: Literature review and research directions," International Journal of Production Economics, Elsevier, vol. 72(1), pages 1-13, June.
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    Cited by:

    1. Meena, Abhilasha & Dhir, Sanjay & Sushil, Sushil, 2024. "Coopetition, strategy, and business performance in the era of digital transformation using a multi-method approach: Some research implications for strategy and operations management," International Journal of Production Economics, Elsevier, vol. 270(C).
    2. Peng Xing & Xiangru Zhao & Mingxing Wang, 2022. "The Optimal Combination between Recycling Channel and Logistics Service Outsourcing in a Closed-Loop Supply Chain Considering Consumers’ Environmental Awareness," Sustainability, MDPI, vol. 14(24), pages 1-25, December.
    3. Mohammed Alkahtani, 2022. "Mathematical Modelling of Inventory and Process Outsourcing for Optimization of Supply Chain Management," Mathematics, MDPI, vol. 10(7), pages 1-27, April.
    4. Lou, Yaqi & Feng, Lipan & He, Shuguang & He, Zhen & Zhao, Xiukun, 2020. "Logistics service outsourcing choices in a retailer-led supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 141(C).

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