originally published by spendedge: Why Valves Used In Oil and Gas Industry needs procurement research support?
The Critical Role of Procurement Research for Valves in the Oil and Gas Industry
The oil and gas sector often faces significant challenges, including ensuring timely material supply, managing fluctuating demand, dealing with labor dynamics, coping with volatile commodity prices, and mitigating high operational costs. To enhance productivity and reduce expenses, companies need timely insights into key suppliers, price trends, trade barriers, and supply-demand dynamics.
Key Materials in Oil and Gas Procurement
Valves
Valves are vital in controlling the flow of fluids and gases in oil and gas operations. Procuring high-quality valves from reliable suppliers is crucial. These valves must withstand corrosive and erosive environments, function efficiently under high pressure, and ensure proper seals to prevent hazardous blowouts.
Turbines
Turbines are essential for generating power in oil and gas facilities. Securing turbines that meet operational requirements is critical for maintaining efficiency and reliability.
Compressors
Compressors are used to increase the pressure of gases in oil and gas processes. Ensuring a steady supply of compressors is vital for continuous operations.
Other Key Materials
Besides valves, turbines, and compressors, other essential materials include:
- Pipes, fittings, and flanges for transporting oil and gas
- Pumps for moving fluids through the system
- Instrumentation and control equipment for monitoring and regulating operations
- Specialty chemicals used in extraction, processing, and refining
Challenges in Procurement
Market Volatility
Fluctuating market conditions and commodity prices can complicate procurement strategies. Companies need access to real-time, credible insights to navigate these changes effectively.
Global Supply Chains
Managing complex global supply chains involves ensuring quality and regulatory compliance. Tracking the supply chain and maintaining adherence to regulations is crucial in the highly regulated oil and gas industry.
Supply Chain Visibility
Supply chains in the oil and gas sector can be opaque, making it challenging to trace the origin of materials and ensure regulatory compliance. Implementing supply chain visibility tools provides real-time insights, enabling better decision-making and compliance monitoring.
Corrosion and Erosion
Valves in the oil and gas industry must resist corrosion and erosion to maintain reliability. Companies should choose manufacturers that develop advanced materials and designs capable of withstanding harsh conditions and high pressures.
Safety Concerns
Safety is paramount in the oil and gas industry. Malfunctions in components like valves and pumps can lead to gas leaks, fires, explosions, and environmental disasters. Identifying manufacturers who incorporate safety features such as smart valve technology, remote monitoring, and predictive maintenance is crucial for ensuring reliable and fail-safe operations.
How SpendEdge Can Help
Identifying Potential Disruptions
SpendEdge supports clients in the oil and gas industry by identifying potential disruptions and vulnerabilities in the supply network before they impact production and delivery. Our supply chain tracking services provide detailed visibility, helping clients control costs and mitigate risks.
Ensuring Procurement Risks Are Managed
Our procurement analysis helps client teams develop backup plans to shield their sourcing organizations from various business risks. By evaluating risks at a per-supplier level, we enable clients to take timely action to address vulnerabilities and ensure a smooth flow of goods and services.
Uncovering Cost-Saving Opportunities
Our cost analysis framework helps clients discover new cost-saving opportunities they might have overlooked. For instance, businesses have optimized their spending on drilling and refinery equipment by better understanding supplier pricing and vendor engagement models.
Case Study: Assisting an Oil and Gas Company with Valve Procurement
The Challenge
Our client, an oil and gas company in the Middle East, needed support with the valves market. They faced challenges with price escalations and lacked visibility into cost drivers for critical components. Additionally, they sought more innovative vendors.
Our Approach
SpendEdge conducted a detailed market analysis to assess the supply market for valves. We evaluated the operational and functional capabilities of top valve suppliers, mapping the types of valves they could deliver and their experience in the oil and gas industry. Our experts also developed a cost model to understand supplier spending on raw materials, logistics, labor, and overheads.
Outcomes
Based on our analysis, the client developed a better pricing strategy and identified more innovative vendors. They significantly revamped their category strategy, achieving improved pricing and supplier engagement. Our insights and recommendations enabled them to make evidence-based decisions, enhancing their procurement effectiveness.
Conclusion
Effective procurement research is crucial for navigating the complexities of the oil and gas industry. By understanding diverse pricing models and employing strategic negotiation tactics, companies can align their procurement strategies with their operational needs, ensuring cost-effective and reliable supply chains.
