The PVF Industry: A Dynamic Career Path An Interview with Courtney Rau – Global Project Materials Management, Chevron Corporation

The PVF Industry: A Dynamic Career Path FEATURED STORY An Interview with Courtney Rau – Global Project Materials Management, Chevron Corporation

Between engaging Chevron Business Units and Major Projects on valve and pipe procurement and contracting strategies, Global Project Materials Manager Courtney Rau took the time to speak to Valve World Americas Journal about her work in the PVF industry. She discusses the ways that she brings subject matter experts SME’s, suppliers and business units (BU) together to strategically plan objectives for execution, and her thoughts on the future of the PVF industry.

By Sarah Bradley

Chevron Corporation is active in over 180 countries and engaged in every aspect of the oil and natural gas industries, including: hydrocarbon exploration and production; refining and transport; chemicals manufacturing; and power generation. The company’s earliest predecessor was founded in 1876 and is considered highly influential in establishing the oil industry in California. Branded as Chevron in 1911, the company has grown to become one of the largest companies in the world and the second largest oil company in the United States.

Courtney graduated from the University of Texas with a double major in French and Finance, while working with Chevron’s account as a recruiter for a staffing agency for light industrial businesses. Upon completion of her degree in 2006, she was offered a position and began her career with Chevron in Supply Chain Management.

“I was nervous because I was used to being in steel-toes — not high heels! I was approached by one of my customers that was looking for a document controller – he wanted me for the role, and not someone that I would have placed through the staffing agency. With permission from agency leadership, I got started,” said Courtney. “I knew nothing about document control, but learned quickly as a contractor, before Chevron hired me on full time, doing Accounts Receivable. I have been happy ever since!”

In her 18 years with the company, Courtney has held multiple positions from Project Document Control, Accounts Receivable, Procurement Management, Category Management, Business Management, and now a dual role as Global Project Materials Manager and IRIS (Investment Recovery & Inventory Solution) Discipline Lead.

“I provide support for the projects on material selection, location and storage of warehouse spaces, and project turnover of materials to base business. On the base business side as the IRIS lead, I work with all the business units to essentially help offload their surplus assets in a way that will give them the best return for the asset. When projects turn over surplus to the base business units, it creates excess inventory that may sometimes end up used, but most likely not. It is my job to support the decisions being made around intercompany transfer, sale, scrap, and refurbishment practices, to deliver the best financial value back to Chevron. It is a global role that I am very excited to be in; my favorite thing is supporting our business units and projects to make the best decisions for the company,” explained Courtney. “Being global means that I am lucky enough to see all of the struggles each group has, and offer support by sharing best practices. I work with each business unit to help create success stories at the enterprise level – it is crucial as a global company that we understand what each other are doing, and how we can collaboratively work together.“

Courtney Rau.

Why Asset Surplus is Detrimental

Surplus Assets are assets that are held by a business that are not core to its underlying operations and do not support the business in any way. Surplus Assets can be a result of: over-ordering of components such as the valves and piping needed for a project, ordering the wrong items, or discovering the product is no longer necessary. The cost of the products themselves, the loss of working cashflow, and ongoing holding costs cause surplus inventory to eat away at bottom-line profits. Obsolete assets may have been originally acquired for the business but have since been replaced or have become surplus to the operation of the business. The products may also cause issues by taking up not only financial, but physical space as well.

Another issue with surplus assets is inventory taxation. Inventory taxes fall under  property tax —the largest tax paid by businesses at the state and local levels. In addition to taxes on the value of buildings and land, machinery and equipment can be taxed as property, known as business tangible personal property (TPP) taxes. A number of states include inventory as part of their tangible personal property tax.

Of the states that include inventory as part of their TPP tax, nine states fully tax business inventory; Arkansas, Kentucky, Louisiana, Maryland, Mississippi, Oklahoma, Texas, Virginia, and West Virginia. Five additional states levy partial business inventory taxes; Alaska, Georgia, Massachusetts, Michigan, and Vermont. Inventory taxes are levied regardless of whether a business makes a profit, which adds an additional burden on company finances. Texas, where Courtney is based, fully taxes business inventory of both raw materials and finished goods. Since there is no state income tax, the business property tax in Texas is one of the highest in the nation. Imposing an inventory tax may put these states’ businesses at a competitive disadvantage while at the same time, local jurisdictions cannot easily afford to give up the revenue generated by inventory taxes.

“While state and local jurisdictions see inventory taxes to be a problem, the overriding difficulty with managing surplus assets are the customs duties and export compliance issues we face at the global level,” said Courtney. “For instance, our operations in Kazakhstan have very strict rules around selling assets to countries outside the region. This causes a massive amount of surplus that just can not be removed or sold, or disposed of because of the regulatory requirements surrounding the activity.”

Maintaining Manageable Material Levels

Knowing exactly how much to order requires a mix of predictive data analysis, business experience, and insight into the company’s business units, which Courtney has developed over the years in her various roles. Courtney strives to ensure that all of her projects and business units are getting the right material, are managing the transfer from project to Base Business, verifying that it is the right decisions to sell, scrap, refurbish, or hold.

“A typical day for me involves offering phone or email support when folks are looking for material, or looking to offload for the best return. I am asking BU’s and Projects to trust me when I say I am going to do everything they need to help them to maximize the return to their bottom line,” explained Courtney. “To me, the best thing is supporting folks that are in dire straits – they do not know what to do with their warehouses, do not know the best way to manage their equipment surplus, and I come in to save the day! It is very challenging because I must bring together all aspects of the business to gain the customers approval – that means working with individuals who love to keep their equipment, and do not want to let go of it. We, as a Supply Chain organization, have to convince our business partners that it is in their best interest to trust us to deliver. It is sales basically – and I love the excitement and the engagement I get from this. When a BU recognizes that we were able to provide the best solutions for their bottom line, it is so incredibly rewarding!”

Prior to her role in investment recovery and inventory solution, Courtney was considered the “Valve Girl” in the industry; she was working across the globe with all manufacturers to determine the best sizing, selection, manufacturer, etc. for their PVF needs. She performed audits, proper PVF selection on products, expediting, managed projects, and more. She explained that Chevron’s Approved Manufacturers Lists (AML) is a comprehensive list of manufacturers with the ability to provide varying degrees of products, from commodity to highly engineered. The company maintains datasheets that are standard to its specs globally. A selection of valves is therefore available to choose from based on the AML and on process conditions for the specific application.

“There is no such thing as a ‘vanilla’ product – most folks ask me, ‘how do I know I am paying the right price?” It is not easy to determine. Every valve is created differently – the application, the process, the media, etc. will all determine what valve we should choose and from which vendor,” Courtney revealed. “Do I need commodity, or do I want resiliency? Why do I want either one? I am involved on all projects, large and small. Our biggest challenges have been in extreme H2S environments with very huge temperature swings that can make PVF a challenge. Lead times are also onerous, and people do not understand that PVF is the organs, veins and arteries of any project – they are crucial to making things run, yet they tend to get minimal attention and can sometimes be considered throwaway items. PVF is extremely important and making sure people trust me and what I can provide as far as knowledge and support – that is paramount to my life.”

Lead times have been an issue in the PVF industry for many years and continue to be a problem faced by many operators when sourcing products. “I see a huge disconnect between what is quoted or presented as a standard lead time versus the reality. COVID-19 has posed many issues with supply chain shortages and the tariffs placed on imports to the U.S. have caused a massive block to getting PVF materials in a timely manner and sometimes receiving supplies at all. It is important that we understand that ‘long lead’ is the new standard – all things are ‘long lead’ now,” she said. It is also important to consider other possibilities in this realm – whether that be refurbishment, replacement in kind, or even additive manufacturing of certain parts.

Vetting Vendor Relationships

“The market is very volatile, and ever-changing. Manufacturers eat up other manufacturers, individuals buy and sell, and the best representatives move from company to company. Enhancements can cause issues to design, and it is so important to know the market, keep track of the constant changes and keeping your ear to the ground is crucial to making the right selections,” Courtney explained. “For instance, a manufacturer may be not approved on our AML because of one isolated issue years prior – due to management changes, acquisitions, etc., this manufacturer may be the best in industry now – but they are not approved because of something historical. It is important that we know those changes, keep up with them and know when to give companies another chance, or a new chance to prove themselves.”

Courtney stresses that the constant changes in the PVF industry can make it difficult to remain abreast of acquisitions and new developments, but that finding the best vendors to work with is key. Support, excellent customer service, dedication, willingness to work with her in a pinch, and pride in their product are the core qualities that she looks for in a supply partner. They must have a very strong quality program that is auditable and workable, be able to be flexible in certain situations, and have a very strong engineering team to make good decisions in a quick fashion.

Standardization is another topic that Courtney feels has a major impact and fosters divided opinions within the PVF industry. In relation to valves, the industry has been aiming to create more streamlined requirements that can be addressed across the market. This is being done in an effort to minimize confusion and ultimately develop standard products. The effort is made with the goal of bringing down costs and increasing availability of stock which will lower the impact on lead times. Courtney believes that standardization has many benefits, though she worries this may hamper the industry’s ability to develop new solutions, and also place a strain on budgets as necessary items become obsolete and require upgrade and replacement.

“The industry is trying to trend toward valve standardization; while I think this is a great effort, I do believe that it can stifle creativity in the industry. I think the long-term benefits will be positive, it will just take some time before we see the results from the effort; we may receive some negative impact in the interim. Currently, we have seen an increase times, size, and weight of the products because of this standardization effort. We are working through this with many of our other end user partners, so hopefully it will be successful and we can collaborate to realize change together,” she said. “Chevron is always trying to improve and innovate, so things that might start becoming obsolete in a facility are being worked today for the future of tomorrow. While standardization is key to decreasing prices and lead times, it is also important to set ourselves apart from our competition.”

Looking ahead, Courtney is optimistic about the future of the PVF industry and continues to be excited about the role she plays in the valve world.

“PVF is a very tight-knit community. The world is huge and very small at same time. Most engineers do not think that PVF is ‘sexy’, but you will find one of the most exciting careers of your life,” Courtney concluded. “It is dynamic, ever-changing, and we are lacking in people that know the right thing to do! Get into PVF and you will have a job forever!”

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Sara Mathov is a feature editor contributing to Valve World Americas, Stainless steel World Americas and other related print & online media.