This is suggested in a new rapport from Menon Economics based on a survey among Norwegian oil companies and suppliers. The rapport shows that Norwegian oil companies pay 20 to 30 percent more for products than other companies, mainly due to costs related to documentation and specifications.
“This is an unnecessary cost, which should and could be eliminated. Our survey shows that suppliers, based on their accounting, don’t make an extra profit from Norwegian oil companies, even if these companies pay more for products”, says Sveinung Fjose, CEO at Menon Economics.
“The extra cost is heavily related to paper work, due to specifications that are either to complex, irrelevant or, in some cases, contradictory”, says Fjose and gives an example of a product that – according to the specifications – should be both 16 and 18 centimeters long.
Fjose says the overly detailed specifications hinder innovation.
“Oil companies should tell suppliers what the product is supposed to do, not how it should look. Leave it to the suppliers to find the best solution”, says Fjose.