The traditional method of establishing relationships between customers and suppliers in the drilling business is very inefficient and wastes money through consuming resources without adding value. Some new processes have been introduced but low bid is still often the primary determinate of success. These will be reviewed, the issues still to be addressed identified and solutions discussed. Two avenues of improvement will be described: 1) suppliers evaluating their opportunity and declining where appropriate; 2) customers removing cumbersome systems from the past and using new, more intelligent and efficient methods for selecting suppliers.

When saying "no" is the right answer.

Pursuing unsuccessful bids is both a waste of direct effort and a dilution of resources, which could be properly assigned to developing potentially successful opportunities. The current personnel constraints on the drilling business make this intolerable for companies who wish to differentiate themselves. These companies will adopt logical processes to select the bid opportunities they will pursue. These processes will include strategy development with a clear understanding of target markets, business plans which specify prioritization through cost / benefit ratios and decisions trees which consistently lead contractors / suppliers to the highest potential opportunities. Suppliers will ultimately say "no" to the customer when clearly indicated through their decision processes, in a manner that enhances the relationship.

Creating value adding supplier selection processes.

Customers in other industries have gained significant productivity improvements through early selection and alignment of suppliers. Methods exist to quickly assess the real value that can be delivered and to make early selections. Price of the contract can be balanced with the value delivered by the supplier to achieve a true evaluation. Suppliers are integrated into the planning process for maximum benefit and parallel engineering dramatically cuts cycle time and development costs. A far more effective supplier selection method than the current practice will be described which will reduce the expected rise in "no bids".

Improvements in the bidding process will lead to improvement in achieving well objectives through faster cycle times, increased value and more consistent achievement of objectives. A necessary requirement in the current low oil price environment.

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