2. About Me
Currently Director of Supply Chain at Geokinetics
Lean Six Sigma Black Belt
6 Years US Army
16 Years in Supply Chain & IT Supply Chain (all functions)
Affiliated with APICS, ISM, SC Council, Next Level Purchasing
OIL&GASSupplyChainManagementForum2014
UPSTREAM/DRILLNG SC SC SERVICES SC REFINING
SC OTHER
3. Geokinetics is one of the largest independent,
international land and shallow water geophysical
service companies offering a broad range of
specialized geophysical solutions to the petroleum
and mining industries, worldwide.
www.Geokinetics.com
4. Why Transform?
How many of your companies have a unified Supply Chain Vision and Strategy
Mission
- Tied to the overall organization’s vision and strategy
- Integral part of decision making
- Planning and Forecasting is common practice
“…studies shows companies that report supply chain glitches experience a 20%
loss in shareholder value. Thus, we have the explosion of SCM software products
proliferating the marketplace and an increasing emphasis on collaboration among
chain partners.”
In response to the dramatic changes in the business landscape over the past few
years, many companies are launching business transformation programs to drive
sweeping changes in their supply chain processes.
- CTPAT Logistics
- Exportation/Importation Regulations
- Broader Logistics
- Supplier Base has grown
IntegrationGlobalPressuresFinancial
OIL&GASSupplyChainManagementForum2014
5. OIL&GASSupplyChainManagementForum2014
Executive
Commitment
Strategy Emplaced
Articulation for change and
Setting Targets
Structured Change Management
Maintaining Energy: Momentum and
Permeation
“70 percent of all transformation initiatives (programs) fail. Therefore, the effort to
improve supply chain results has been short lived, incomplete, or partially
succeeded.”
Doomed For Failure?
6. Considerations: P.A.C.E* Framework
Pressures: External and internal forces that impact an organization’s market
position, competitiveness, or business operations.
Actions: The strategic approaches that an organization takes in response to
industry pressures.
Capabilities: The business competencies (or organization, process, etc…) required
to execute corporate strategy.
Enablers: The key technology solutions required to support the organization’s
business practices.
*Aberdeen Group
OIL&GASSupplyChainManagementForum2014
Prior to Transformation Ask the What, How, Who, etc.
7. Maturity Class Framework
Where does your company fall?
What defines Best in Class?
Why are they achieving success?
What technologies and services enable them to succeed
OIL&GASSupplyChainManagementForum2014
*Aberdeen Group
“Knowing others is wisdom, knowing
yourself is enlightenment.”
Lao-Tzu
8. Know Your Financials
Revenue to EBITDA Ratio
Cost of Supply Chain
NPV, IRR, Inflation, Tax Rates, Discount Rates
9. EBITDA is essentially net income with interest, taxes, depreciation, and amortization
added back
Show A Compelling Story
2013 0.010 0.050 0.100
Revenue 500,000,000$
OPEX 400,000,000$ 4,000,000$ 20,000,000$ 40,000,000$
EBITDA 100,000,000$ 104,000,000$ 120,000,000$ 140,000,000$
Gain % 4% 17% 29%
2013 0.010 0.050 0.100
CAT I 500,000,000$ 5,000,000$ 25,000,000$ 50,000,000$
EBITDA 100,000,000$ 105,000,000$ 125,000,000$ 150,000,000$
Gain % 5% 20% 33%
“Sourcing Strategies can benefit up to 10% to 20% Cost Savings” (Accenture 2012)
10. Know your Business Model
Business Size – Alignment with Suppliers
Decentralized or Centralized or Hybrid
Company Objectives and Strategy
12. Performance Attribute Description
Reliability Addresses the ability to perform tasks as expected. Reliability focuses on the
predictability of the outcome of a process. Typical metrics for the reliability attribute
include: On-time, Right quantity, Right quality. The SCOR KPI (level 1 metric) is Perfect
Order Fulfillment. Reliability is a customer-focused attribute.
Responsiveness The Responsiveness attribute describes the speed at which tasks are performed.
Examples include cycle-time metrics. The SCOR KPI is Order Fulfillment Cycle Time.
Responsiveness is a customer-focused attribute.
Agility Describes the ability to respond to external influences and the ability to change.
External influences include: Non-forecasted increases or decreases in demand;
suppliers or partners going out of business; natural disasters; acts of (cyber) terrorism;
availability of financial tools (the economy); or labor issues. The SCOR KPIs include
Flexibility and Adaptability. Agility is a customer-focused attribute.
Costs The ability to respond to external influences and the ability to change. External
influences include: Non-forecasted increases or decreases in demand; suppliers or
partners going out of business; natural disasters; acts of (cyber) terrorism; availability
of financial tools (the economy); or labor issues. The SCOR KPIs include Flexibility and
Adaptability. Agility is a customer-focused attribute.
Assets The Asset Management Efficiency (“Assets”) attribute describes the ability to
efficiently utilize assets. Asset management strategies in a supply chain include
inventory reduction and in-sourcing vs. outsourcing. Metrics include: inventory days of
supply and capacity utilization. The SCOR KPIs include: Cash-to-Cash Cycle Time and
Return on Fixed Assets. Asset Management Efficiency is an internally-focused
attribute.
What Is Important To Your Company
OIL&GASSupplyChainManagementForum2014
13. OIL&GASSupplyChainManagementForum2014
SCOR Expanded
QAD: http://www.qad.com/erp/menuitem.59f182664053393643b543b58790307a?vgnextoid=21a3a014ba28a210VgnVCM100000530a03a7RCRD
Design Design Control Design Discrete Design Process
Design
Configuration Design Project
Plan Plan Demand Plan Multi Site Plan Process Plan Discrete
Source Source Direct Source VMI Source Returns Source Contract
Make Make Discrete Make Lean Make Repetitive
Make
Remanufacturing Make Process
Engage Engage Direct Engge Medical
Engage
Configured Engage Retail
Deliver
Deliver Direct
Ship
Deliver Direct
Stores Delivery Deliver Discrete Deliver VMI
Deliver
Configured Deliver Retail Deliver Returns
Service
Service
Installation Service Field
Service
Customer
Service
Finance Finance Analyze Finance Budget Finance Collect
Finance
Accounting
Enable
Enable
Lot/Serial
Traceability
Enable
Transportation
Enable
Warehoueing
Enable
Consignment Enable Pricing Enable Schedule
14. Know Your ERP and Analytics
Know the Requisition to Pay Process within your
ERP
Compare to actual business process
Are metrics correct (Example: Open PO)
Utilize Functionality – how much customization do
you have
15. OIL&GASSupplyChainManagementForum2014
* Graziadio Business Review: http://gbr.pepperdine.edu/tag/supply-chain-management/
Demand
Forecast
Perfect Order
SCM Cost
Inventory
DPO DSO
Supplier Quality
Purchasing
Costs
Cost Detail
Utilization
Order Cycle
Time
How accurate are you to forecast
First Pass Yield %
SC Operational Costs
Velocity & Speed of Delivery
Quality of Services & Materials – Vendor Management
Resource Optimization
Costs of PO, Buyers, Time
Category Management
Right Inventory, Right Amount, Right Time,
Right Place
Know What is Important to you
19. Key Change Management Attributes
VISION SKILLS INCENTIVES RESOURCES ACTION
PLAN
CHANGE
SKILLS INCENTIVES RESOURCES ACTION
PLAN
VISION INCENTIVES RESOURCES ACTION
PLAN
VISION SKILLS RESOURCES ACTION
PLAN
VISION SKILLS INCENTIVES ACTION
PLAN
VISION SKILLS INCENTIVES RESOURCES
CONFUSION
ANXIETY
DELAYS
FRUSTRATION
FALSE or NO
STARTS
20. People
Competencies
Roles & Responsibilities
Employee Objectives & SMART Goals – Start thinking of where you want to be
Career – Ascension Planning
Training & Knowledge Sharing
Assessments & Improvements
Execution-oriented competency model to fill SEATs
SKILL = Technical skills that are specific to performing the process element, converting inputs to
outputs. These are the specific responsibilities that HR will look for in successful candidates.
Example: 3-Way Receiving Match
EXPERIENCE = Demonstration of performing tasks related to technical skills. These are experiences
that might coincide with information on a person’s resume to describe activities they performed
relative to the technical skill. Example: ERP systems
APTITUDE = Personal characteristics of a person that are associated with an aptitude for performing
the required technical skills. These are more generic and abstract, but define what characteristics
HR would look for in a successful candidate. Example: Analytical, Detail Oriented
TRAINING = Classes, programs, Certifications or other education that aid an individual in performing
a technical skill. Examples: ERP Certification, SCOR Professional, APICS CPIM
OIL&GASSupplyChainManagementForum2014
21. Process, Procedures, Policies
Standardize Processes
Global Procedures – Visible, Accessible, and Trainable
Policies Supporting Business Goals
Controls and Metrics
Center Led Locally Executed, Completely Centralized, Decentralized?
Develop a Professional Supply Chain
Formalize Process Maps
Integrated with the Business: Shared Services, Business Development, Accounting,
Operations
OIL&GASSupplyChainManagementForum2014
Tools
Number of Systems and Tools
ERP Process – Core Processes in SC
Excel Sheets
Integrations
