Oil Well Services | Suppliers | Pricing Trends , Best Practices

Strategic Sourcing Guide to Oil Well Services Procurement

Overview

Business practices within Oil Well Services market are heavily influenced by changing trends across the category as well as within the broader Operation of Mining Facilities market. Suppliers are shedding the category expert tag and moving up the value chain to offer an integrated approach to their services. With this new approach, suppliers can offer a wide portfolio of services and position themselves for large contracts that go beyond just Oil Well Services.

Buyers of Oil Well Services are insisting on hard evidence to support cost reduction. Suppliers are responding with elaborate matrix of KPIs that provide managers actionable data on supplier performance and cost savings achieved.

As market presence of companies become global, there is a growing preference towards service providers who can provide services seamlessly across the globe and have excellent understanding of local regulations and culture.

As a result, category managers need to closely monitor the Oil Well Services procurement trends and identify changes required in their procurement environment for the category.

Oil Well Services Procurement Best Practices

Sometimes, procurement functions are unable to timely alter their practices while responding to market conditions. Industry experts acknowledge that periodically reviewing procurement best practices and adopting learnings from across procurement categories can help procurement teams respond to market needs in a more agile way. This report combines our experience of other categories with Oil Well Services procurement insights and hand picks best practices that can work for category managers delving in this market.

For example, Buyers should set a baseline against which the performance of suppliers can be benchmarked along with setting measurable/quantifiable KPIs. Defined KPIs provides suppliers with clarity on the scope. Besides setting standards for operations, pricing, and performance, KPIs must provide tangible goals in terms of the quality of solutions.

Investing in benchmarking studies that help category managers enhance their knowledge on pricing or billing rates of suppliers allows them to not only save costs, but also negotiate better with suppliers. For example, while negotiating for bundled services, they can save significantly on a single service by cross-verifying rates quoted by suppliers against industry benchmarks.

Buyers must ensure the participation and collaboration of all related cross-functional teams (procurement, electrical, engineering, and housekeeping) in category management and planning activities. This is crucial, as these teams will be the primary end-users of the services offered by suppliers, and this step will ensure consistency in services.

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Risks in Oil Well Services procurement

Oil Well Services procurement managers also need to proactively identify and mitigate potential risks that can arise in the supply chain or contracts for Oil Well Services procurement. Some examples include:

Rising cost of labor, irregular evaluation of asset condition, and improper maintenance of the assets at the facilities increases cost of facilities management. Also, poor planning of maintenance and contingency budgeting results in an increase in the budget to the category managers
Irregular inspections of facilities and installations can lead to the failure of electrical and maintenance-related equipment. This leads to downtime and interrupts the day-to-day operations of the buyers, thereby resulting in huge losses
Procurement without consulting the actual users of Oil Well Services may result in a mismatch in expectations of the buyer's internal stakeholders versus the actual contract executed

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Who should read this report

The report is intended to serve as a one-stop reference guide for Oil Well Services procurement strategy and offers a perfect blend of category basics with deep-dive category data and insights. Therefore, it is ideal for category beginners looking for “Oil Well Services: Procurement Report 101” as well as for category experts actively tracking the global Oil Well Services procurement market.

You may have just initiated your research to design a winning Oil Well Services procurement strategy, or you may be a category expert looking for strategic insights and updated data.Either ways, the report has your requirements covered.

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Key questions on Oil Well Services procurement answered by this report

Procurement decisions can prove to be costly in the absence of careful deliberation and evaluation of every available option. In fact, more than 90% of the decision makers we work with acknowledge that timely availability of up-to-date category intelligence can help them make better purchasing decisions. More than 80% of them believe that in-house category intelligence needs to be updated periodically to achieve full benefits. If you have read so far, we are quite sure you agree!!

The Oil Well Services procurement report helps take more informed decisions by placing all the critical information and advice at the fingertips of a decision maker. It also specifically answers some of the key questions that we have been routinely asked during our industry outreach initiatives:

What is the spend potential in the Oil Well Services market?
What is the correct price to pay for Oil Well Services? What are the key trends and factors that influence current and future pricing?
Which selection criteria are the most important for Oil Well Services Suppliers Market?
Who are the top Oil Well Services suppliers? What are their cost structures?
Which negotiation levers can reduce Oil Well Services procurement cost ?
What are supplier margins in Oil Well Services market?
What are the best practices for Oil Well Services procurement and what are the potential risks?

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Oil Well Services Category Insights: What is inside

The Oil Well Services market report offers a complete picture of the supply market and analyzes the category from the perspective of both buyers and suppliers. Analysis of the category trends, procurement best practices, negotiation levers and overall category management strategy advisory are interspersed with in-depth data and commentary on spend outlook, pricing ecosystem and supplier landscape drilled down to a region-level coverage.

Data

A key highlight of this report is the in-depth outlook created on Oil Well Services procurement spend and pricing trends. The report further delves deep into the aspects of cost structure, total cost of ownership and supplier margins for Oil Well Services. A dedicated section to supplier profiles and evaluation helps decision makers cast a wider procurement net and identify gaps in existing relationships.

Insights

Along with specific category and supplier intelligence, the publication also includes curated insights on Oil Well Services market trends, price influencers and inherent risks. These insights help the decision makers prepare for market shaping trends in advance and create alternative strategies for changes in the market conditions.

Advisory

Additionally, the report also advises on the best practices and strategies to manage the Oil Well Services category efficiently. Negotiation levers and opportunities are explained in detail along with quantification of their potential. Benchmark KPIs for supplier and buyer performance management are also aggregated to better organize the category objectives. Other themes of advisory include ideal procurement organization structure, enablers to achieve KPIs or category objectives and ideal SLAs to have with suppliers.

Category Ecosystem

Buyer and supplier ecosystem
Competitiveness index
Buyer and supplier power
Threat of new entrants and substitutes

Global and Regional Sourcing Insights

Category spend
Spend growth
Dynamics
Opportunities

Pricing and Cost Analysis

Pricing outlook and data
Drivers of pricing
Cost structure and inputs cost
Total cost of ownership
Pricing models and margins

Cost Saving Opportunities & Negotiation Strategies

Buyer and supplier side levers
Quantified cost saving opportunities
Negotiation strategies and quantified outcome

Procurement Best Practices, Strategy and Enablers

Procurement excellence
Sustainability and innovation
KPIs and category enablers
Risk management and outsourcing

Vendor Analysis

RFx essentials and selection criteria
SLAs
Supplier evaluation metrics
Detailed supplier profiles

Our research is complex, but our reports are easy to digest. Quantitative analysis and exhaustive commentary is placed in an easy to read format that gives you an in-depth knowledge on the category without spending hours to figure out “what does it mean for my company?”

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Category Research Framework

SpendEdge presents a detailed picture of Oil Well Services procurement solutions by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key category influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.