COMMUNICATION breakdown is commonplace. However, better communication is something the oil&gas supply chain is working hard to achieve.
However, some suppliers remain to be convinced about the reality of collaborative working and the win-win scenario that can result, and will argue that the old-fashioned buyer-versus-supplier approach still prevails. That said, we are miles away from the kind of adversarial supplier-buyer relationship that exists in the grocery trade, where The Telegraph recently reported that “It’s the summons that Tesco suppliers fear; an invitation to Discounter House”.
This now infamous building next to Tesco’s corporate HQ has seen hundreds of suppliers being ushered into makeshift cubicles for price negotiation, not with their usual friendly Tesco buyer but with a specialist negotiator – which makes it easier for the buyer to “rough you up”, as one supplier put it.
Tesco isn’t the only one that behaves this way and journalist/author Joanna Blytheman has written extensively about the topic, notably her book, Shopped.
Fortunately, the oil&gas supply chain prefers to do things differently. Supported by a code of practice that is endorsed by FPAL, the Government, Oil & Gas UK and most major purchasers, the industry has developed forums such as FPAL Performance Feedback and the Share Fair, where suppliers and buyers can have honest and open dialogue aimed at mutual improvement of behaviours. This approach may pay dividends as tough times loom into view.
While some supermarkets seem not to worry if they drive suppliers out of business, purchasers in our industry are anxious to support a healthy supply chain.
Indeed, a recent meeting of supply-chain chiefs in Aberdeen spent time discussing how to help their suppliers through the credit crisis.
They concluded that suppliers should be encouraged to discuss any cash-flow problems with purchasers at an early stage and that purchasers should do all that they can to assist, perhaps by bringing milestone payments forward.
FPAL aims to help every buyer find the perfect supplier and is proud to be an integral part of this collaborative approach to supply-chain management.
For further information, visit www.fpal.com