Pipes, Flanges & Fittings Market Procurement Intelligence Report

The market for Engineering Components and its sub-segments such as Pipes, Flanges & Fittings are at an interesting intersection. Technology is improving productivity and creating fresh demand. Convergence of data science, automation tools, 3D printing, robotics, AI and big data has opened up multiple possibilities to better serve customers at a lower operational cost.

Regulatory guidance on data protection and increasing concern over cybersecurity have increased the costs for suppliers as they incur additional spend on compliance and security. These additional costs have a potential to drive marginal increase in prices across the key geographies.

Suppliers are continuously taking efforts to improve efficiencies and productivity and deploying processes and technologies. Some of these investments are likely to increase their costs in the shorter term, but learnings from other sectors keep the suppliers optimistic about a lean cost structure in the longer run.

Trends like these and many others discussed in this report are necessitating a relook at the way Pipes, Flanges & Fittings is procured and the procurement cost saving opportunities that exist.

It has become imperative for category managers to remain as agile as possible in terms of their procurement practices. However, it is not always easy to quickly spot and implement alternative practices in a category like Pipes, Flanges & Fittings. To help quick decision making, this report advises on several procurement best practices that have worked well for category managers.

For example, Buyers should engage with suppliers that have adopted a global delivery model as it reduces buyers' risk. In this model, any disaster/emergency at any operating facility of supplier will result in the work being transferred to a different facility, thereby ensuring continuity of the project and reduced risk for buyers. This model also provides buyers access to skilled labor from across the globe, thereby improving the quality of engineering products provided by the supplier.

Buyers should engage with suppliers that repurchase used products at fair market value. This assists buyers to dispose of used products in a convenient manner. Also, during such repurchases, suppliers provide credits to buyers for future purchases. This reduces overall procurement costs for buyers.

Buyers must have a clear understanding of the subcontracting policies, if any, of Pipes, Flanges & Fittings suppliers. Factors such as cost incurred, service quality, adherence to timelines, and regulatory compliance of subcontractors employed by suppliers should be carefully assessed prior to engagement.

Pipes, Flanges & Fittings procurement managers also need to proactively identify and mitigate potential risks that can arise in the supply chain or contracts for Pipes, Flanges & Fittings procurement. Some examples include: