Industry News

The benefits of a supplier relationship in pipeline construction

Businesses now have more choice when it comes to suppliers and can shop around for the cheapest prices. However, one of the most important considerations for companies to get the most out of its transactions is actually building long-term relationships with suppliers.

Companies in pipeline construction, whether it’s water, sewer or oil and gas pipelines, are always looking for new ways to reduce production costs and make projects more efficient. The way to do this is now moving away from simply buying the cheapest equipment, and towards supplier-partner relationships.

A 2013 study by PwC, Supplier risk management: time to take control, found that supply chain management is essential to reduce costs, increase efficiency and support a business through changing market conditions.  The study found that most business supply chains consist of complex networks, making it more important for companies to take control of supply arrangements and ensure they are getting the most benefit from suppliers.

Working with a partner in pipeline construction, rather than just a vendor, is one method that provides many benefits, one of which is the reduction of costs. Vermeer National Construction Equipment Sales Manager, Jeff Lawson, said the top four benefits of creating a supplier-relationship include increased efficiency, strong after-sale support, reduced costs, and future innovation opportunities.

Increasing project efficiency

While businesses buy equipment that allows them to get a job done as quickly as possible, Mr Lawson said, in addition to equipment, the suppliers themselves can also streamline operations and make projects more productive.

“Having a supplier as a partner means it’s beneficial for both parties for a job to go well, so you can rely on them to deliver on time and find ways to make operations run more smoothly.

“If you have that relationship and something gets damaged or you need a spare part in a short time-frame, you can be confident that they will not only deliver, but that the parts will be available.

“It’s all about reducing the risks of supply chain disruption,” Mr Lawson said.

 The impact of ongoing support

 One of the major differences between buying pipeline construction equipment when your supplier is a partner, not just a one-off vendor, is that there is a much stronger support base after the initial sale.

Mr Lawson said because Vermeer understands the pipeline industry and the needs of their customers, they can provide extensive product knowledge and training.

“This is the main reason businesses should invest in strategic partnerships, because if you find the right supplier, they can show you how to get the most out of your equipment, troubleshoot any problems, and are available for after-sale support.

“We’re seeing a lot of trenchless and HDD projects benefitting from that support, as well as  using our Australia-wide servicing. It gives businesses an edge because they have that extra knowledge,” Mr Lawson said.

Click here to continue to read the full article in the February 2017 edition of The Australian Pipeliner magazine.