Dennis discusses documentation

Josh Averitt Welcome to Coming Down the Pipe, ARS Global's monthly podcast about pipeline assets, investments, pipeline construction and the market in general. ARS Global is the midstream partner for streamlined sourcing solutions. I'm Josh Averitt and today we have Dennis Hernandez Dennis Hernandez, the national sales director. Josh Averitt Dennis, why don't you give us a little bit of insight as to what you do as a national sales director at ARS. Dennis Hernandez I try to sell as much pipe valves and fittings as possible, and I'm really a resource to the sales team when it comes to developing strategies and tactics and matching our needs to the needs of our midstream operators, rather to get them what they need and to make sure that it's technically compliant at a good market price and that it gets to where it needs to be when it's supposed to be there. Josh Averitt Great. Well, you mentioned you mentioned some keywords that we're really going to hone in on today, technically compliant. One of the aspects of that that we're going to talk about is going to be maintaining traceability and accurate documentation. So why don't you give us a little bit of a 100,000-foot view of how we, I guess, make sure that our clients are getting the correct documents that they require on items that they've purchased from us? Dennis Hernandez Yes. So, the documentation is basically the permission slip to sell an asset. Without it, it's not worth anything to anybody. The end users, one of their primary concerns is that not only does the equipment meet the application requirement, but also does the documentation reflect the integrity of the equipment, Is it verifiable and can we prove that it is what it's supposed to be? So we do a number of things to make sure that that happens. When we source material, we ensure that it does come with the proper documentation that requires reviewing the documentation, the information on the documentation, and the tagging on the assets of serial numbers need to match product descriptions need to match measurements, and dimensions need to match. And then what we do is we take that document, put it in the spot into our online inventory management system, and there it stays forever and ever. When I quote something or when Ryan or Wendy quotes something, we always send a picture of the asset with the material test reports and any other documentation that may be attached to that asset so that it's reviewed upfront by the people who are going to buy it. There is no guesswork involved. What we're quoting is what we own. This doesn't come to us and then it goes off to a manufacturer somewhere. And then we get the test reports when it's made and hopefully, it's right. Absolutely not. It's all reviewed and verifiable upfront by the prospective purchaser. And there it goes. When we're issued a purchase contract for the asset, we again provide updated test reports for any modifications, any hydro tests in any other type of testing that may have been done on that asset from our OEM partner. And that's just an update. It goes into our team's file along with photographs. We have an added layer of review as a part of our sales fulfillment process, which is having an OMC inspector come in. And before we ship the valve to the client, an OMC inspector will go to Cameron or whoever is doing the work at the shop and do a final review just to make sure that everything's in order of the documentation of the physical assets, dimensions, trading, whatever else may be applicable to that order before we send it off. Josh Averitt Right. And after it's sent off, how do you maintain or retain documentation? Is that something that ARS retains for a series of time after the purchase so that there's a little bit of peace of mind for our clients to say, hey, if, you know, if we move our field office, we've seen it time and time again? A small mom-and-pop midstream or older midstream company gets acquired and swallowed up by a bigger company and they move field offices and all of a sudden that construction manager, operations manager or plant manager is no longer there and they have a failure. Or maybe it's just a maintenance shutdown or what have you. Well, those job books have disappeared. Is that something that our clients can rely on ARS for? And if so, how do we retain those retain those documents? Dennis Hernandez We retain them forever. They're electronically stored. They are secured. And, you know, we've been around for, I guess, about seven years from the very first assets that we acquired seven years ago of those assets, some of those assets that we have. And so, we still have all of that documentation. Further, there are assets that we own that are for sale that were manufactured in 2013. We have all the documentation for those assets. I think we have a set of valves that used to belong to one of the largest midstream companies in North America. And those assets, a few of those assets were manufactured and came off of a canceled project back in 2008. And we still have all the documentation that traceability for those as well. So, there is no expiration date, there is no deadline for documentation archiving. It should be it should be available for as long as that system is in line. We have received phone calls from companies that may have had a glitch in the system or there was a personnel issue in the field and there were some MTRs that were misplaced or lost. Or maybe they were just kind of thinking, you know what, I'll just call Dennis and maybe he's got them at his fingertips. Now, we don't spend half a day going through all these books from the project. And we've got 5 minutes. And I can find them on my phone off of the file for that sales order and just send them a link and they can access our teams' folder and download them or I can send them from our OneDrive files. So, it's, it's, it's nothing that we have specifically said implicitly or explicitly said or communicated that as of, as of this date, we're going to get rid of these. But no, there's no there's no expiration or retention of records because this is a serious business. We're moving we're moving hydrocarbons. We're providing the materials to move them. So as far as we're concerned, they're going to be with us forever. Josh Averitt Sure. Well, you know, that obviously gives the customer peace of mind, especially when you talk about some of the dates of manufacture that you mentioned earlier, I think it was 2013, 2008. Can you take that even a step further past the documentation and traceability? Because that's like you said, the permission slip. If that doesn't happen in the first stage, and it gets done anyway. But how do we how do we give our clients and what services do we provide to provide peace of mind to say, hey, this, this valve is unused? It might be seven years old or maybe nine years old, but what are some other additional steps that we take above and beyond the documentation and traceability to give our customer peace of mind that, yes, it's an older valve, but it's still a great valve and it still will perform to API 60 or whatever the standard that's required is. Give us an idea of how we ensure that you're buying essentially a factory new valve, although it's it might be an older dated manufacturer. Dennis Hernandez So one of the key points here is, is when you buy from us, you're buying from a company that has sourced directly from an end user or a major pipe valve and fitting distributor. There's only one purchase order attached to the sale of that product. We oftentimes verify in writing that the asset was never used when the asset is sent back to the OEM for recertification inspection and testing and re-warranty, they are certifying that that valve is in fact a new unused surplus valve. Josh Averitt And during that during that testing, it maintains its API monogram, correct? Dennis Hernandez Absolutely. So, the API. No, it's not. There is some ambiguity around the term remanufactured or rebuilt. Those terms specifically point to used pieces of equipment. Nothing we sell to an end user has been used. Therefore, it is not reimagined or rebuilt. There are cases where we will, as a precautionary measure, replace soft goods because of the age of the valve just to maintain the performance integrity, quality factor or safety factor. We'll go ahead and go through that process even if it means contracting or margin a little bit. It's already at the OEM. Why not go that extra step? Well, a lot of distributors have old valves in inventory that they haven't sold in a long time. And when one of our products was purchased from them, how does somebody prove that they're getting what they think they're getting from us? They're getting what they think they're getting and they're getting a little bit more as well. Josh Averitt Sure. Well, yeah. Thank you for that. And I guess one last thing that I wanted to hit on. When you talk about our electronic inventory system, how do we attach the correct documentation to the correct valve? And how are we ensuring that, yes, we have the physical documentation, yes, we have the physical valve, but how are we cross-checking to make sure that it's electronically stored accurately and retained accurately? Dennis Hernandez I think what you're pointing to is the matching process and there are three pieces of information that we can verify on every valve that we sell. Not only does it have a valve tag on it with the serial number, but there's also a laser-etched serial number on the body of the valve. Plus, we have the MTR with the serial number on that piece of paper on that document. So, there's a three-way check. We look at the MTR document. We look at the tag and then we look at the laser etching. That's how we know that that MTR belongs to that valve as a part of meeting or complying with the API specification. Every valve that we test needs to be uncoated. So, before we, let's say we purchased a group of valves that had FD coating on them. We would strip the coating off, blast off the coating, send it to the OEM and they would, they would test the valve to be compliant with the API 60. Sometimes you can't see the laser etching under the FDA coding. Once you strip it, then you can verify that as well. The inspector, when they go to do the inspection before it's released for shipment, they will also do a verification. So, we're peeling back layers of the onion when the end user receives that valve, it went through their material manager process. When we purchased that valve and went through our verification and material manager process, when we quoted that valve, we verified that the MTR serial number matched the valve. Correction the valve tag before we quoted it. So, then there's that layer. Before we ship the valve, I request an RMA from the OEM. Again, we do another verification when it arrives at the OEM. The OEM says, well, this should be serial number ABC one, two, three. They do that verification. When I look at the final test report, I do a verification again and the OEM correction or OMC third-party inspector also does a verification. So, this is like peeling back layers of an onion. There's always a set of eyes doing a redundant review of this to be sure that that valve is the valve that we think it is. Yeah. When that valve is shipped to the end user, it goes through their material management and verification process as well. Josh Averitt So, by the time it hits the right of way or facility, there should be zero doubt out in anyone's mind. What I'm hearing is a three-way match at ARS, plus a couple of other layers when we go to catalog it in our electronic inventory system, plus some verifications at the OEM, plus some verifications by a third-party inspector. At that point, it gets to the end user, which has their own inspection process and material receipt process as well. So, by the time it goes for installation, based on what we've talked about today, we have a fully documented, fully traceable valve that's been verified by multiple parties multiple times, and then even above and beyond after installation. Our customers have peace of mind that those records that we talked about earlier are maintained virtually through the life of the asset as it's in service. Dennis Hernandez That's correct. The right component, the right verifications, the right cost, right time. Josh Averitt Great. Well, Dennis, thanks for joining us today. We'll see you next month on our next episode of Coming Down the Pipe. Make sure to subscribe and you can keep listening in every month on every major platform that you get your podcasts on. Thanks for joining us.