“Your legacy depends on your margins.”
Rani Puranik, the co-owner and global chief financial officer for Houston-based Worldwide Oilfield Machine, provided an inspired keynote speech for Day 5 of FreightWaves’ Global Supply Chain Week. The Day 5 focus was energy, chemicals and mining.
The overall focus was on margins; after all, it was her dad who once told her, “It’s all about the margins, Rani. It’s all about the margins.” And as Puranik herself noted about the interconnected web of supply and demand, “The winner is the one with the margins.”
While margins generally reflect profit, Puranik also defines margins as tolerances. “The higher the margins, the higher your ability to store resources for growth, or in tough times act like a shock absorber,” she said.
To gain those winning margins in the supply chain, Puranik identified five “C’s of influence.”
“What does the consumer want that I can supply and generate demand from my supplier to ensure I get a healthy margin to grow and protect me against changes?” she asked.
“Innovation to lower cost was everyone’s focus,” Puranik recalled about 2015. “From exploration to conversion, production to transportation, the magnifying glass was on every single penny. … Survival depends on cost.”
“Since the impact of energy, production and use became more visible and vocal across the daily lives of all populations,” she said, “not only cost mattered but cultural sophistication also mattered — culture, be it in environment regulations, humanitarian safety or diversity inclusion.”
“During COVID, countries that were behind had to shift gears to the digital word, where remote tracking and touchless connectivity became available to all,” she said. “What would’ve taken another five to 10 years happened in a few months.”
“I say this boldly but we need to take more ownership,” Puranik said. “Simply outsourcing services, renting and paying for a short-term fix will not establish long-term resiliency. What if we took more ownership in the quality and performance of suppliers? What if we invest in making our suppliers more robust and as flexible to adapt as we are? Can we partner with other participants in the global supply chain to innovate more efficient solutions in products and services?”
Puranik certainly has made the five C’s work for Worldwide Oilfield Machine, an oil and gas equipment manufacturing firm. The company has more than 3,000 employees spread out in 11 global locations and generates more than $350 million in annual revenues.
She obviously learned well from her father.
RECAPS OF KEYNOTE SPEAKERS DURING GLOBAL SUPPLY CHAIN WEEK