Success in The New Normal Will Depend on Trust

The last two years have arguably been the most challenging ever faced by the oil and gas industry. The financial constraints that started with the downturn in the middle of this decade have been exacerbated by the impact of the pandemic globally.

While latest signs suggest the industry may be recovering as economies start to pick up globally, capital expenditure (CAPEX) and operational expenditure (OPEX) are likely to remain tight, especially when it comes to contract awards in the oil and gas supply chain.

Lockdowns and furloughs around the world led to project postponements in 2020. This year, as the project pipeline starts to move again, they have impacted manufacturing and freight delivery times, creating further delays in some cases.

Manufacturers and suppliers face a challenge when it comes to material supply. In today’s ‘new normal’ of ultra-competitive markets, where overheads have been reduced to the minimum, everyone wants to reduce inventory costs.

Low or no stock in the warehouse, or a reduced supply of an infrequently used grade can mean customers may have to accept an extended lead time when their order is placed. This can result in project pushbacks: a significant challenge for the growing number of projects with a very short delivery time.

Having control line service centers in key locations such as Brazil, the U.S. (Houston) and Malaysia has helped Sandvik fulfill project orders by allowing available stock to be utilized for the different sites. Not having to wait for the production of new materials in Latin America, for example, has been critical to securing some projects.

However, for the supply chain in general, balancing supply with anticipated demand can be difficult. So, how can its impact be minimized?

Forging Trust with the Customer

Trust is a big word, but with dedication, commitment, and the right suite of products it can be achieved to the benefit of both you and your customer.

Being close to customers has always been important – but never more so than now. Building up a strong relationship can take patience, but the rewards will always outweigh the time you’ve invested.

Pre COVID, most meetings would be carried out face to face. The pandemic has changed that, so it’s important to understand which communication method your customers prefer in the ‘new normal’.

Know who makes the decision

Understand who influences the purchasing decision and build contacts with them. Finding the right people in an organization can lead to valuable information on work scopes, schedules, material requirements, and warnings of upcoming requests for quotations (RFQs).

This information can give you an important knowledge advantage in the market. It can also help to ensure you have the appropriate material in stock to support your customer when the time is right to place the order.

Transparency and honesty

You won’t earn your customer’s trust if you’re not prepared to be honest with them. Open dialogue is important.

Sometimes, for example, a customer may request a steel grade that isn’t immediately available because of long lead times or transportation restrictions caused by the pandemic.

However, if you can recommend a suitable alternative that will meet their delivery schedule - such as a material with a slightly different wall thickness or a different material grade – backed with the relevant technical information, they may be comfortable enough to go with your suggestion if they trust your judgment.

At Sandvik Materials Technology, we’ve been providing trusted solutions to the oil and gas industry for more than 50 years. So, whether you’re designing next-generation umbilicals, OCTG, risers, control lines, chemical injection tubing, or more, let’s talk possibilities.

Find out more here.

Matt Castillo.jpg

Name: Matthew Castillo
Title: Business Development Manager – Latin America
Business Unit: Energy
Location: USA