Valves trend: End user procurement challenges in 2018

Recently, there has been a fluctuation in the price of crude oil and Kp-Lok shows this has an effect on the valve trend. This is a welcomed development because it will result to a new development in the market. The control of the supply of crude which was introduced recently has stabilized the price and this helps to prevent the fluctuation in the sector. Those that are optimistic predict the price will be up to 70 US$ and for some time now, the traditional end user Demand and Supply Analysis for valves has been adjusted so as to show the changes in the economic climate.

With the reduction in the maintenance budget, extended shut down intervals the turnover of valves is reducing with much more demand. There is maintenance of top end valve activity and this shows a credible activity level. The end user do not rush when it comes to investing in innovations unless it is crystal clear that it is proven value with high quick return on the investment.

We now observe that the new products usually basethe return obtained on the investment which are made and not unrealistic assumptions. This is very obvious to the end users and in some cases, the technology which has been in used for a long time were claimed to be new. There is a presentation with an innovation which took about 3 years to develop and a live loading gland picking.

The return on investment is outstanding! The determination of the end user demand had been very difficult. I have slaved because there has been a challenge with the gathering of reliable valve usage data. The information might be in the system but the challenge which affects the gathering is priority and time.

Valve demand profiling

Whenever the suppliers are given contracts, it is crucial to deliver the data about the valve usage appropriately. You can get the demand which can be obtained from a single or several operational plants;project for new builds, continental, regional; global; exploration; different business streams, refining, petrochemical, power etc. when the end user are able to combine and deliver them skillfully, he better the result which will be obtained in the process.

In most cases, there are resistances which come from end user organization, difficulties, internal conflict also arise when MRO is combined with other business streams and projects. Nowadays, some of these challenges are being removed so as to tackle the difficult times.

Once the end users have the ability to develop a Total Life Cycle cost which applies from projects via to maintenance, there would be a proven success. You likewise need to have an irreversible mandate from the end user Executive Management so as to have compliance on the projects, procurement and Technical Management that also report to higher management. From the experience obtained, it was shown that the Procurement Management is neither empowered for technical endorsement or procurement on projects.

In some cases, you will hear supplier saying that they have an agreement with a particular company but the end user need to ensure a reliable demand profile is developed and also ensure it is delivered to the supplier whenever the project is going on. If such strategy is global, then there is need to have a significant preparation across the discipline where you need endorsement. You likewise need to note that big players in the industry are few and this increase competitive choice.