When it comes to procurement, LyondellBasell Manager of North America Field Procurement and Plant Capital Alexander Konovalov believes that, historically, services are more difficult to source than products — especially when there’s turnaround activity on-site.
“Now, with new tariffs and rules, we have to restructure our supply team on the fly,” Konovalov said. “Whatever the plan was before, now we have to think about changing it a little bit, and this is challenging.”
“Sticking to the schedule” can be problematic as well, Konovalov said, speaking on a panel at the Economic Alliance Houston Port Region and BIC Alliance’s Annual Industrial Procurement Forum held recently in Pasadena, Texas.
“But,” he added, “we do it well.”
Amy Bullock, purchasing manager at Covestro, said she agrees with Konovalov.
Replacing skilled craftsmen as they leave the workforce is another sourcing challenge, Bullock said, especially “during turnaround time, when we all decide to go into a turnaround.”
“Skilled craftsmen are highly needed,” Bullock said, lauding the efforts of the Construction and Maintenance Education Foundation (CMEF) and similar organizations that inform students there are “other options out there” that don’t require a four-year degree.
Responding to panel moderator and BIC Alliance Vice President Jeremy Osterberger’s question about how contractors can best qualify to meet companies’ procurement needs, BASF Corp. Vice President of Indirect Procurement for North America Denise Joost said BASF tends to use “our tried-and-true standard contractors that we use on a regular basis.”
“Most of our technical services obviously have to be pre-qualified by our engineering maintenance organization,” Joost continued. “They have to go through the hurdles there before we’ll even start the process for a contract negotiation.”
Safety is the company’s No. 1 priority, Joost emphasized.
“[The contractor’s] safety record has to speak for itself before they can even get a foot in the door at BASF,” she said.
Meeting needs, persistence
Identifying a need is the first step in the prequalification process, said Broc Dyson, Gulf Coast procurement associate for ExxonMobil .
“Once there’s a need, it’s communicated to our group or through the contracts administration group, and we evaluate that need depending on if it’s very specialized or whatever that need is,” Dyson said. “Then you can go through the prequalification process. Having the business understand that [potential contractors] can satisfy that need, I think, is key.”
Dave Bidinger, project procurement advisor at ExxonMobil, said a good strategy for contractors seeking procurement opportunities is to clearly express value proposition.
“What is it that you might do that would differentiate you from your competitors?” he offered. “Persistence is important. We’re not always easy to get into, but feel free to reach out to me and share your ideas. We try to seek the win-win solutions and look for continuous improvement.”
Jay Nesbitt, global procurement manager at Chevron Philips Chemical, noted the procurement opportunity “shortlist” is similar among many major firms.
“We often have the same types of qualifications, but we sometimes use different tools,” he said.
Chevron uses a vetting process to determine qualified service sources.
“We use that to look at the red flags for safety and other issues that can come up,” he said.
Nesbitt encouraged hopeful contractors to “be out there, be perseverant, be present, have good references from the other players in the market, and keep your information in front of the right people.”
It’s not easy to get on companies’ AVLs (approved vendors lists), Nesbitt concluded, “but it’s very easy to get off, based on performance.”
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