A Changed Industry - Supplier Snapshot

The Energy industry has changed, the low oil price has driven every company operating on a global basis to review their international costs and take a long hard look at how they deploy their staff and temporary workers around the world. For an industry that historically had over 32.000 expat assignees placed around the globe this has been a steep learning curve and for some, an opportunity to re-think how the business operates.

Supporting large scale oil and gas projects, operators or EPC companies has become more and more of a challenge for suppliers in this market.

Slowly but surely, there has been a steady focus from the suppliers to identify new markets, industries and opportunities in order to become less dependent on an industry that is slowing down and cutting costs.

Not for the faint hearted

Operating in the Oil and Gas industry is no longer attractive for new suppliers and it isn’t for the faint hearted. In order to survive and successfully win business it’s crucial that a supplier has strong experience, robust teams, tested systems and procedures and most of all, local knowledge. Nothing, absolutely nothing can replace the local knowledge a supplier has by being physically present on the ground around the world. 
Operating remotely to support clients is no longer a viable option. In order to execute the deadlines demanded by the clients it is crucial that a supplier has accurate local market knowledge, networks and set-ups in order to execute all requests successfully.

Risk

Clients have recognized this and although under pressure to save costs they will not take a risk by partnering with suppliers that do not have a track record in compliant delivery. A pattern is emerging that demonstrates that the suppliers that are being chosen to support such international assignments are the “hard-core, long-standing, knowledge experts” that know the industry inside out.
But being a long-standing knowledge expert still isn’t enough to guarantee a supplier success when bidding on work. Gone are the standard services and whether a client now requires an off-the-shelf solution or an innovative tailor-made solution, hidden costs and complicated rate build-up’s are no longer entertained. Open book planning and transparent prices are becoming the new trend.

Strategic planning

This isn’t just about survival and cutting costs, this is about strategic planning for the future. For the Oil and Gas industry as we know it but also for the emerging markets – green energy and renewable energy. 
So what has changed? How are Clients and Suppliers approaching the future? Here at Brunel we have analyzed this in depth by talking with all of our clients. It’s fair to say that across the board most clients have changed their entire approach to the deployment of internal assignees and the key to that change is forward planning and engaging partner suppliers who can think with the client, share best practices and offer flexible solutions.

Snapshot of industry changes and trends:

• Lower volume of international assignments. Much more responsibility given to key assignees.
• Smaller teams mobilized internationally.
• More local recruitment and talent mapping
• Tighter scheduling and planning - robust deadlines
• Simpler price structures
• Less luxury for international assignees 
• Single status, no more family assignments
• Less rotational assignments, more residential assignments
• Robust interview and selection processes – Talent building
• Fully mapped compliance and risk management plans and outsourcing
• Avoidance of non-safe areas or regions where corruption is a risk
• Outsourcing more mobility and deployment services to partners – cutting internal costs
• Selection of experienced partners with financial security and funding options
• Encouragement of block pricing and client loyalty volume discounts

J. Thomas  - Business Manager

 

Brunel

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