The demand for oil field equipment is expected to be driven by the rising refining activities and oil extraction coupled with its growing demand across the globe and increasing regional consumption. Additionally, the ongoing effort to discover new oil fields across various untapped regions is promoting the use of different oil field equipment across the globe.
However, according to SpendEdge’s strategic sourcing experts, it has been noted that oil field services in various countries are provided on a contract basis, often with fixed-price contracts. Moreover, unexpected hikes in equipment or material prices, unforeseen logistical or technical challenges, can result in cost overruns for oil field equipment companies. As a result of such challenges, many oil field equipment companies have started adopting for strategic sourcing studies to identify the best cost sourcing locations.
Moreover, the strategic sourcing solutions offered by SpendEdge, help oil field equipment companies devise sourcing best practices.
The Procurement Pain Point and Insights Offered
A leading oil field equipment company wanted to identify the low-cost countries (LCC) and best-cost countries (BCC) locations for its sourcing activities. Additionally, the client also wanted to assess the sourcing suitability across the LCC and BCC locations. They also wanted to gain insights into the cost drivers and risk elements across the supply chain. Furthermore, the client wanted to gain a deeper understanding about their peer company benchmarking by conducting a local supplier base analysis.
To cater to the business requirements of the client, the strategic sourcing experts at SpendEdge carried out a comprehensive research methodology, which included primary and secondary research coupled with qualitative and quantitative data collection methodologies.
During the course of this strategic sourcing engagement, the oil field equipment client was given insights about the LCC and BCC locations to carry out their sourcing activities. Additionally, the client was able to assess the suitability of the LCC and BCC locations and gain insights on the cost drivers and risk elements. Furthermore, the client was able to gain a deeper understanding about peer company benchmarking through SpendEdge’s local supplier base analysis.
Key questions answered in this strategic sourcing engagement include
The strategic sourcing engagement helped the oil field equipment client identify the best cost sourcing locations. Additionally, the client was able to create and implement processes and tools to identify and leverage opportunities for superior sourcing across the supply chain.