Increased demand for supportive suppliers in difficult economic climate

Paul Boughton
A new survey by H S Pipequipment Ltd (HSP), the supplier of world-class valves to the oil, gas, and petrochemical industries, has revealed that, in addition to cost and quality, the oil and gas industry has become reliant on a high level of support from its equipment suppliers to help it face heightened economic and complex procurement pressures.
 
Among the many sought-after qualities, responsiveness (71 per cent), product availability (66 per cent), commitment to keeping promises (63 per cent) and providing the proper documentation (71 per cent) were identified as being of most value to industry workers.
 
As many as 74 per cent of those surveyed, which included engineers, supply chain managers and procurement specialists, reported that, during shutdowns, the most common problem experienced at oil and gas assets was the unexpected need for essential components.
 
According to 49 per cent of respondents, valves caused more difficulties than any other equipment group combined, including pumps, compressors and other rotating machinery at oil and gas assets. During the procurement process, identifying the correct product/specifications (23 per cent) and the engineering review of quotations (37 per cent) were highlighted as the most time-consuming activities.
 
53 per cent said that little or no replacement inventory was kept on site, due to a lack of storage space (50 per cent) and in order to keep costs down (67 per cent). Most of those surveyed were also either unable to estimate the hourly cost of downtime at onshore and offshore oil and gas assets or put the figure in excess of £150,000.
 
“The specification of valves is extremely complex, which inevitably slows the procurement process and takes up valuable time,” says HSP managing director Peter Everett. “With each hour of downtime having a significant economic impact, it’s even more crucial that suppliers have an extensive inventory and access to fast track manufacturing in order to respond to equipment needs quickly.”
 
Other significant findings of the survey included the reported effects of the economic downturn.  34 per cent of those surveyed said that planned shutdowns have been postponed and 25% reported movement away from purchasing new equipment. The difficult financial climate has seen an increase in staff cuts, according to 25 per cent of respondents. Overall, 53 per cent of those surveyed said that they believe there is now a greater need to do more with less resources.
 
For more information, visit, www.hsp.co.uk/your copy and notify the sender.

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