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What’s a business to do when its supply chain becomes unreliable?
Colin Maskey, President & General Manager of Compass Bending, a pipe bending service based in Calgary, says, “We started thinking about this possibility years ago. That’s why we focused on building inventory.”
Inventory: The Historical Advantage
In Alberta’s energy sector, radical supply and demand swings are a fact of life. Remember those bumper stickers that went around twenty years ago? They said “Please God, please give me another oil boom. I promise not to piss it all away this time.”
Only the careful planners survive.
“We’ve always had demand spikes in winter,” he explains. “And after a lot of analysis, we discovered that 80 – 85% of our oil and gas clients ask for the same pipe bends. That helped us know what to stock. I guess that’s how we learned to operate in tight supply situations.”
But What About When Nothing’s Coming Down the Pipe?
Going back to 2015, when prices dropped to decade-lows, projects all over the energy industry were being cancelled. “While some customers will shop on price alone, we were able to accommodate those needing a quick turnaround. Stocking pipe saves days or weeks on pipe bends.”
Then when the pandemic hit in 2020, “All hell broke loose,” he explains. “Demand went to zero, and we had to make big cutbacks. But the world did not end. We’re back and we’re still standing.”
Today: Russia-Ukraine War Pummels Supplies
Perhaps the industry would expect relief by now. But unfortunately, the energy crisis brought on by the Russia-Ukraine war has risen energy costs yet again, forcing closures of metal manufacturing mills in Europe including steel, aluminum and other metals used to make pipe.
While at least the rising price of oil is keeping the industry somewhat active, Maskey says, supplies continue to tighten. “Normally with prices like these, we’d be going gangbusters, especially if we could replace inventory faster. But even with supply chain problems, we can still turn things around quicker than if we had no inventory at all.”
Despite supply issues, Compass Bending continues to stock pipe bends in standard radii (3D, 5D, 10D, 15D, 20D), in all common sizes.
While being the fastest link in a very slow supply chain isn’t easy, Maskey approaches the future with tenacity.
“We’ve survived before and we’ll do it again,” says Maskey. “We just have to spin this inventory into the gold it is!”
Compass Bending President and General Manager Colin Maskey was in conversation with Jacqueline Drew of Tenato Strategy Inc
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