Keep going...

Keep going…

With West Texas Intermediate (WTI) oil on the precipice of breaking below $40 per barrel, there is a lot of talk about just how low the oil price can go. Coupled with that, the mining industries are also facing up to some of the huge challenges that the current Chinese economic slowdown and resulting surplus of raw materials will present. As a result two of the “heavy engineering” heavy-weights, so resilient during the last recession (and so reliant on technical design and consultancy), are looking at some tough times ahead.

With West Texas Intermediate (WTI) oil on the precipice of breaking below $40 per barrel, there is a lot of talk about just how low the oil price can go. Coupled with that, the mining industries are also facing up to some of the huge challenges that the current Chinese economic slowdown and resulting surplus of raw materials will present. As a result two of the “heavy engineering” heavy-weights, so resilient during the last recession (and so reliant on technical design and consultancy), are looking at some tough times ahead.

As an interested industry observer, I have been speaking to a number of engineering contacts involved in the sectors, from all sorts of disciplines (structural, mechanical, fire, chemical to name a few). Despite the differences in their specialties they all expressed the same concern about what this current market dip would mean for the industries going forward…but more importantly for their companies and livelihoods. Some were a little shocked with my response – “It means there is a great opportunity for your business”

“In the midst of chaos, there is also opportunity”

Sun-Tzu

Is this an opportunity I see before me? - Shakespeare(ish)

Is this an opportunity I see before me? – Shakespeare(ish)

It might be a little bit of an odd perspective, but perhaps we shouldn’t always view recession (or challenging market conditions) as a bad thing. From the perspective of an engineering business for example, it means your competitors will be struggling or reducing in number, allowing prices and fees to stabilise. Tough conditions also mean fewer potential competitors will consider entering the oil, gas and mining sectors. Sectors which have perhaps traditionally been (wrongly) viewed as a cash cow.  As someone passionate about quality engineering, what does get my goat, is ‘middling to down-right bad’ engineers being highly rewarded for poor service. But periods of recession and market dips offers us the opportunity to flush out the weak and provides opportunity for the strong. It lets you find and exploit that niche or grow your market share.

If you’re a great engineering company, here’s your chance. If you have got a great product that does the same job cheaper, or if you offer a better design/service more cost effectively, your clients are more likely to be willing to listen. Tough times in the market also gives you the chance to recruit the staff and specialists you have been desperately chasing during the bumper years….it’s more likely they are available, and it’s more likely they are available at a price you can afford.

You might though take the other option. Take the skills, the experiences and resources you have gained during your time in the oil, gas and mining sectors and apply any efficiencies, IP, expertise or other ways of doing things to sectors where business is booming. Exploit the opportunity by engineering a different route to success (pun intended).

We certainly take this perspective at EngLancer. Tough conditions mean that businesses are less likely to be vilified for out sourcing….I even heard one client of ours refer to it as “cloud commuting” the other day. As cheesy as it sounds I like the perspective that the term “cloud commuting” provokes. That is, finding the best specialists in the world, not just the best of a local talent pool – accessing these specialist without the obvious business risks associated with committing to a full time head-count. Forward thinking businesses view the outsourcing process as an opportunity to gain an advantage over their competitors when jobs and projects are getting harder and tougher to come by. Essentially, they are trying to provide quality design for a cost-effective prices…..it just makes sense doesn’t it? Be lean, be responsive to what your customer needs….essentially be smarter.

Images provided under a creative commons licence by DVIDSHUB and Bob Massa

 

 

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