Case study: Reducing labor and capital costs

Eight years ago, the owners at a newly minted Oklahoma-based manufacturer set out to produce equipment for oil & gas clients and deliver reliable goods on a cost-efficient basis.

They planned to leverage their robust experience in the industry, but they couldn’t go at it alone — they needed a proven supplier just as committed to quality and efficiency.

The manufacturer selected American Piping Products as their supplier from the outset. They knew they’d have the greatest chance of success working with a partner that could push them to order smarter and operate more efficiently. Almost a decade later, they’ve been proven correct.

Led by a dedicated, communicative and problem-solving sales representative, we’ve been helping fuel their growth ever since. Here’s how our team streamlined their labor, inventory and capital costs and helped set them on the path to success in the oil & gas industry.

Taking a hard look at inventory

In the early days, the manufacturer purchased standard length pipe in bulk. Their team then cut it to the correct lengths before welding it into final products such as heater treaters, GPUs and sand separators.

This approach makes sense for many manufacturers: If you’re using a part over and over again in production, why not save money by ordering in bulk and prepping it yourself?

But in reality, it wasn’t as efficient. For one, cutting and beveling pipe required costly capital equipment and valuable labor time. Dedicated warehouse space needed to be set aside to store the inventory, too.

Finally, there was an inherent build-up of material waste. If it’s re-used, accurate inventory records must be kept to trace each piece back to its original mill manufacturer. If the scrap isn’t re-used, it must be disposed of (which, for material like steel piping, is easier said than done).

So when their American Piping Products sales rep paid a visit and saw a 6 feet by 12 feet pipe of drop links (aka scrap pipe) in their yard, he saw an opportunity.

The rep walked through their production facility, observed what they were doing and provided ideas on how to make their process more efficient and less costly.

Ready-for-production pipes and just-in-time delivery

For starters, their sales rep proposed having American Piping Products cut their pipe instead. By having an experienced supplier complete the prepping, cutting, beveling and final quality check, they have material ready to go straight into welding for each project with far less strain on their internal resources.

Additionally, we’ve grown to be an extension of our client’s material management program and switched to just-in-time delivery for their orders. This means they don’t need to dedicate excess storage space for pipe; instead, when it arrives, it’s ready to go straight into welding within the week.

Deliveries of this nature, in less capable and communicative hands, can lead to issues — especially in this dynamic, oil-filled environment. If a truck is supposed to arrive at 8:00 but doesn’t come until noon and eight employees are waiting around to unload it, that’s thousands of dollars wasted in a single morning.

All because of an uncommunicative supplier.

But with our forward-thinking service rep, full transparency is given to the owners. If an order is delayed for external reasons (truck delays, larger supply chain issues), the owner gets a call and knows well in advance that the delivery time has changed and the labor resources can be reallocated in advance. This ensures just-in-time deliveries help, not hinder, successful production.

All in all, these changes meant a streamlined operation that reduced material waste, minimized inventory risk and saved valuable internal labor hours for this equipment manufacturer.

Attention to detail

Our sales rep’s commitment to frequent updates doesn’t stop at shipping updates. Here are a few other examples of the care given to this long standing customer relationship — details that turn a vendor relationship into a trusted partnership:

24/7 on-call service reps. Responsiveness is make-or-break for a demanding operation seven days a week. When one of the owners puts in 12-hour days on a weekend, she doesn’t have to wonder if her piping supply questions will need to wait until Monday.

Straightforward documentation… Things like vague product descriptions or no visible purchasing order number make it difficult for purchasing agents or warehouse inventory workers to tell what’s actually coming in. Our paperwork (following documentation and QC standards set across American Piping Products) ensure documentation is clean and easy to follow.

…readily available for unpacking. Packing lists and MTRs are sent with the truck and also emailed in advance so their on-the-ground team has the information needed to unpack the truck.

Completed domestic requirements. This can seem simple enough, but following domestic product requirements for pipe that is both melted and manufactured stateside can slip through the cracks with other vendors. This isn’t the case with our sales rep, who understands the importance of this requirement from years of working together and ensures that box gets checked.

Piping solutions customized to your needs

Built over time, American Piping Products continues to find innovative ways to refine our distribution processes. Every customer has unique pain points requiring just as unique solutions.

Let’s dig in and find the answers together.

When buying from American Piping Products, not only do you receive the highest quality material at the best price, but you acquire industry-experienced problem solvers positioned to enhance your industry processes. Start a conversation with a rep today.