In this slideshare presentation we discuss Supplier Relationship & Performance Management (SRPM) and how you can link your HSEQ programme to this. SRPM is the proactive management of supplier relationships to secure strategic advantage and to add value to your organisation. Here’s what will be covered: - An introduction to SRPM - Why SRPM & who is involved - Objectives, process, roles & responsibilities of SRPM - The benefits of SRPM - How to link your HSEQ programme to your SRPM The recording to this webinar can be found here: http://www.mangolive.com/blog-mango/how-to-link-your-hseq-programme-to-your-supplier-relationship-and-performance-management-system

1. SUPPLIER RELATIONSHIP &
PERFORMANCE MANAGEMENT (SRPM)
Briefing document

2. Safety briefing
2
To be done by the regional champion

3. Agenda for today
3
Area Topic Time Presenter
General Objectives for today 10 mins
SRPM SRPM – introduction (SRPM within SC) 5 mins
SRPM - objectives, process, roles & responsibilities 30 mins
Case study (CONTRACTOR) 30 mins
Wrap-up & Questions 15 mins

4. Objectives for today
• Bring the relevant stakeholders involved in the
management of suppliers together to
• Provide the background to SRPM
• Share the current CLIENT experience and practice
• Share the CLIENT SRPM process and the roles &
responsibilities, stakeholders etc
• Show where the links between the SRPM and the HSEQ
process are
• Provide a forum for questions
• Use the session as an opportunity for a deep dive
into/reminder of the HSEQ management of contractors
process following the recent audit findings
4

5. SRPM
Objectives/process/RACI...
Case study
Wrap-up & Questions
HSEQ Mgt of Contractors Process

6. By the end of the SRPM module we would like to have
addressed the following questions ...
Questions How addressed ...
• Why SRPM? -> CLIENT’s 3rd party spend
• What is SRPM meant to do? -> Share the objectives of SRPM
• How does it work? -> Walk through the SRPM process
• Who is involved? -> Explain the key stakeholders
• Who is supposed to be doing what? -> Outline the roles & responsibilities
6
I
II
III
IV
V
A case study for CONTRACTOR will illustrate how the process is deployed at CLIENT

7. CLIENTs 3rd party spend and the ratio of contractor to staff
are high and posing specific challenges when managing
7
I
CLIENT and its contractors have to work as one team, sharing objectives and values
3rd party spend
• CLIENT’s 3rd party spend can be
characterised as follows
• ‘Addressable’ 3rd party spend
accounted for ~GBP 800M p.a. in
2012
• Total of 1,500+ suppliers
• Contracts with ~800 suppliers are in
place across Wells, Projects, M&L and
Assets
• Approximately 50 contracts (6%)
account for ~80% of the contracted
3rd party spend
Ratio of contractors to staff
• Compared to other industries the ratio
of contractors to staff in upstream oil
and gas is high
• For CLIENT, contractors account for:
• ~70% of overall working hours
• ~85% of on-site working hours
• This ratio combined with the high risk
aspect of the business the
management of our contractors/
suppliers is paramount

8. SRPM is the proactive management of supplier relationships
to secure strategic advantage and add value for CLIENT
• The expected benefits and objectives of SRPM are ...
• Proactive management of risk
• Fostering innovation
• Enabling operational excellence
• Developing mutual trust
• Securing access to scarce resources in a constrained market
• Enables the total value of the relationship with key suppliers, to
be measured, understood and reported
• The SRPM process provides a platform for exchange of
information across a number of topics and stakeholders
(operations, business, commercial, SC, HSEQ, ..., supplier)
in a well defined way
8
II

9. The SRPM process can be summarised in the following steps
9
III
Relationship Mgt
Supplier Tiering
Questions • How critical is the supplier
to the business and what’s
the required
management?
• Who has an interest /
stake in the relationship
with the supplier?
• Who are CLIENT’s
counterparts at the
supplier side?
• How do CLIENT and the supplier
communicate?
• What information should be monitored?
• Who should be involved and how?
• What is the
performance?
• What are areas to
improve (for CLIENT
and/or the supplier)?
Activities • Identify the key
stakeholders (contract
owner, tech sponsor,
HSEQ rep, ...)
• Tier supplier using the
segmentation matrix
• Identify the key
stakeholders in CLIENT and
on the supplier side
• Discuss and agree how to
interact throughout the
life of the contract
One off activities:
• Agree CMP
(contract mgt
plan), participants
& schedule
meetings
• Agree the agenda
for the
Performance
Reviews
• Agree the roles &
responsibilities
On-going activities:
• Collect information
for the CMP
• Prepare
performance
meetings
• Capture the outputs of
the performance
review meetings in a
standard format (PR
summary)
Tools/
Outputs
• Supplier Tier • Relationship Map / SRPM
Summary
• SRPM Plan • CMP
• Performance Review
document
• Performance Review
Summary (PR
summary)
Performance
ReviewPerformance Mgt
The RACI matrix outlines the detailed activities and responsibilities for each step

10. Supplier / Contractor Segmentation Matrix
Tier No 3 2 1 0
Supplier Relationship Tactical Approved Preferred Strategic
A) Spend (by contract p.a.)
Wells / Completions <£1m £1m - £5m £5m - £10m £10m +
Projects <£1m £1m - £5m £5m - £10m £10m +
M&L xm xm xm xm
Assets <£100k <£1m £1m - £10m £10m +
B) Business Criticality - market characteristics
`
CEU HSEQ contractor risk rating
The HSEQ score is taken from the HSEQ
management of contractor process
Low Medium High High
Product / Service Offering How customised are the goods and/or services?
off the shelf standard offer limited
customisation
bespoke products /
services
Products: Uptime / reliability
Services: Productive time
How critical is the uptime / productive time for the
performance of the operations (project, well,
asset)?
n/a Limited Some impact High impact Integral to
operations
performance
Products & Services: Leadtime
n/a Ex stock Routine
requirement
Important to first
production
Important to first
production
Product & Services : Impact on
reputation
How critical is the failure of the product/ service
to Centrica's reputation?
n/a No/Low criticality Limited criticality Critical Highly critical
Innovation
n/a None Market led Limited joint work Joint Innovation
Performance metrics
n/a Contract
deliverables (CD)
CD and/or KPIs CMP with KPIs CMP with KPIs
Number of available alternatives
n/a Lots of alternatives
(5+ alternative
suppliers)
Limited alternatives
(3-5 alternative
suppliers)
Sole / Single / Dual Sole source
Ease / risk / cost of change
n/a Limited risk of
change
Acceptable risk of
change
Manageable risk of
change
High risk of change
C) Business Criticality - supplier characteristics
Competency
How specialised is the knowhow required for the
product / service?
n/a Standard / basic
skills required
Experienced skills
required
Specialist skills
required
Subject Matter
Expertise required
Capability
How specialised is the equipment required for the
delivery of the service / manufacturing of the
product?
n/a Standard
equipment
Specialised
equipment
Highly supplier
specific equipment
Custom-made
equipment
Capacity Is there sufficient capacity available?
n/a Sufficient spare
capacity
Some spare capacity Limited spare
capacity
Limited spare
capacity
Spend to turnover ratio
What is Centrica's spend with the supplier as % of
supplier's turnover relevant to the contract?
n/a <1% <3% <5% >5%
Contract scope - geographic
asset specific
contract
regional contract national contract international
contract
Contract scope - content
single-service /
single-product
contract
single-service /
single-product
contract
multi-service /
multi-product
contract
multi-service /
multi-product
contract
Account management / customer tier
How important is Centrica for the supplier and
how is the supplier managing the account?
n/a Automated account Transaction account Key account Key account /
aligned business
model
Insert other factors as needed
… … … …
Insert other factors as needed
… … … …
8. Other supplier-specific factors
6. Supplier 3 C's
1. HSEQ risk of service
2. Product / Service Offering
3. Business criticality of product / service
5. Supplier dependence
4. Perceived value opportunity
7. Perceived importance as a customer
Segmentation Matrix Supplier/Contract Tiering
10
The segmentation framework is at the heart of the process
and the tier determines the level of management
required/recommended
Spend
Assessed
relative to the
type of goods/
services
procured, e.g.
low spend on
Wells may be
£1m, compared
to low spend
for Assets is
classified as
£100k
Business Criticality
– is derived from a
mix of criteria,
including :
•HSEQ risk,
•Market characteristics
‒ Degree of
customisation of
the
product/service
‒ Lead times
‒ Number of
alternative
providers, ...
•Supplier
characteristics
‒ Supplier’s
capabilities /
capacity /
competency
‒ Dependency
Tier 0 and selected Tier 1 suppliers are the target to establish and
develop the process with
III

11. The recommended frequencies and participants in the
performance reviews have also been tailored to supplier
tiers
Supplier
Tier
Characteristics Regular
SRPM
interaction
with supplier
required?
Suggested
frequency of
interaction
Participants
ContractSponsor
ContractOwner
SCContact
TechnicalSponsor
HSEQRep
Other(e.g.Finance)
Tier 0 Business critical sources of innovation and
performance and/or operational improvement,
HSEQ & Supply Chain critical.
Yes 3-6 months -
Performance Reviews
R R R R R O
Tier 1 Operational, HSEQ and Supply Chain criticality
high
Yes
(resources
permitting)
6-12 months –
Performance Reviews
O R R R R O
Tier 2 Medium spend and medium business criticality
-> objective is to achieve optimum quality
service and value with a number the resources
reflecting the business requirements
Optional 12 months / FPAL
Type 1 and 3 reports
n/a R R O O O
Tier 3 Relatively low to modest business criticality and
spend -> effort levels should be minimised
providing that the contract and relationship are
working effectively
Optional
n/a
11
III

12. Performance reviews are the platform to cover a range of
topics – from operational performance to strategic plans
• The topics covered in the regular review meetings are
• ‘Contract Management Plan’ containing
• HSEQ performance (standard + contract specific KPIs)
• Operational performance (standard + contract specific KPIs)
• Other contract specific KPIs (depending on type of commercial
agreement, e.g. incentivised remuneration, ...)
• KPIs covering People, Values, ...
• FPAL feedback (for countries where applicable)
• Relationship Matrix
• Business outlooks for CLIENT and the supplier
• Optional: Specific topic of interest agreed between CLIENT
and the supplier (e.g. innovations, new services, ....)
12
III
Topics recommended to cover by Tier of supplier are listed in the Appendix

13. Role Responsibilities
Contract
Sponsor • Builds/maintains relationship with the supplier counterpart to set expectations and communicate CLIENT’s strategy
• Conveys consistent corporate message about CLIENT’s vision, goals and corporate strategy
• Acts as ultimate arbiter (if required)
Contract
Owner
• Key CLIENT person throughout the lifetime of the contract
• Responsible for contract discipline (e.g. Wells, Projects, Assets, …)
• Responsible for execution and delivery of the contract (HSEQ, commercial, technical, ...)
• Responsible for agreeing and implementing the Contract Strategy and Plan (supported by SC and HSEQ)
• Has financial authority to approve Recommendation and Approval for Commitment (AFC)/Amend Contract (in majority
of cases)
• Needs to be informed about / monitor the supplier performance and agree scorecard scoring
Technical
Sponsor
• Provides technical and operational input for KPIs and the performance reviews
• Reviews/manages supplier level operational performance and provides expert analysis to support performance reviews
and contractual interventions by Contract Owner or Contract Engineer as a result of poor performance.
Supply Chain
Contact • Coordinates all supply chain support required by the technical/operational team
• Facilitates activities required for the performance management (such as CMP, FPAL’s etc)
HSEQ Rep
• Responsible for the day to day HSEQ activities associated with the work undertaken within the applicable contract
• Escalates supplier HSEQ issues to Contract Owner and SC Contact as required
• Reviews/manages supplier level HSEQ performance and provides input to performance reviews
• Manages and executes supplier audits
• Defines and implements the post award HSEQ management of contractor requirements
Key stakeholders and their roles have been captured
13
The RACI chart covers accountabilities and responsibilities in more detail
IV

14. Activities FREQUENCY
Contract
Sponsor
Contract
Owner
SC
contact
Technical
Sponsor
HSEQ
Rep
Supplier
Supplier Tiering Review and tier contract / supplier
(segmentation matrix)
Once C A R C R
General Inform the supplier about the SRPM process
and tasks
Once C A/R R C C R
Relationship
management
Identify relevant stakeholders for a contract in
both organisations (Centrica & Supplier)
Once C A/R R C C C
Develop relationship matrix Once I A R C C C/I
Agree executive sponsorship for Tier 0
suppliers
Once A R R C/I
Assign responsibilities to Centrica
stakeholders for engagement with supplier
counterparts
Once C/I A/R C/I C/I C/I C/I
Define interaction/s and engage with peers at
supplier organisation accordingly
annually C/I A/R R C/I C/I
Performance review
admin
Plan yearly Contract Mgt Plan activities
(performance reviews, FPAL, logistics of mtgs,
agenda, …)
annually I R A/R C/I C/I C/I
Set-up meetings in line with Tier requirements
(agenda, dates, …)
annually I R A/R I I C/I
Performance
management
Develop Contract Objectives annually A/R R R R C/I
Review standard KPIs and agree thresholds
for the respective contract
Once + annual
review
A/R R R R C/I
Draft contract specific KPIs and thresholds Once + annual
review
A/R R R R C/I
Review & sign-off objectives, KPI's and
thresholds and ensure they are in line with
corporate objectives
Once + regular
reviews
C A/R R R
Finalise CMP (objectives and performance
KPI’s including targets and scales)
Depending on tier A/R R I I
Capture and negotiate / agree required
adjustments to objectives, KPIs and thresholds
Ad hoc A/R R C C R
Complete and submit Contract Management
Plan (Scorecard and Operations Summary) to
Centrica
Depending on tier I R A/R
Validate CMP and operational summary data
prior to performance review meeting
Depending on tier A/R R C C C/I
Track supplier performance on-going A/R R
Attend Performance Review Meeting Depending on tier R A R R R A/R
Compile Performance Review Summary report
and circulate / log
Depending on tier I I A/R I I
Performance
Improvement Plan (if
required)
Identify areas of concern Ad hoc C A/R R C C I
Identify/agree measures how to improve Ad hoc C A/R R C C R
Agree how to measure progress (KPI’s,
frequency, …)
Ad hoc C A/R C C C R
Document in a Performance Improvement
Plan (PIP)
Ad hoc
Integrate into regular performance review Ad hoc I A/R R I I I
Activities in the process were captured and roles and
responsibilities between stakeholders assigned
• A RACI chart supports the
collaboration and cooperation
within a team
• It communicates in a clear and
transparent way what the tasks
are and who is responsible for
each
• The RACI lists
• tasks which need to be done
(Activities),
• roles involved and
• allocation of responsibilities
• In addition the frequency of the
activities can also be logged
• ...
V
RACI Chart
14
Activities –
what needs to
happen?
Roles – who is
involved?
Responsibilities –
what is the individuals
remit?
A ... Accountable
R ... Responsible
C ... Consulted
I ... Informed

15. SRPM
Objectives/process/RACI...
Case study
Wrap-up & Questions
HSEQ Mgt of Contractors Process

16. The SRPM process is successfully used with some of our key
contractors already
Summary of key facts about this supplier
• Supplier name: CONTRACTOR Corporation
• Headquarter: Switzerland
• Product/Service: 79 drilling units
(Drillships / Jack-ups / Semi-subs)
• Geographic scope: global footprint
• Operating Revenues 2012: 3.5bn USD
• Operating Income 2012: 0.5bn USD
• Spend category: Wells / Drilling Unit / Mobile Offshore Drilling Unit
• Supplier Tier: Tier 0
• CLIENT Spend p.a. : ~70 M GBP
• Type of Contract: 3 years + 2x1 year options
16
V

17. In the case study we will explain the key tools and steps of the
SRPM process
17
Supplier Segmentation Matrix
1
Relationship Mgt / SRPM
Summary
2
Key SRPM tools/components
Performance Review Plan
3
V
Supplier / Contractor Segmentation Matrix - Noble
Tier No 3 2 1 0
Supplier Relationship Tactical Approved Preferred Strategic
A) Spend (by contract p.a.)
Wells / Completions <£1m £1m - £5m £5m - £10m £10m +
Projects <£1m £1m - £5m £5m - £10m £10m +
M&L <£100k <£1m £1m - £5m £5m +
Assets <£100k <£1m £1m - £10m £10m +
B) HSEQ rating
`
CEU HSEQ contractor risk rating
The HSEQ score is taken from the HSEQ
management of contractor process
Low Medium High High
C) Business Criticality - market characteristics
Product / Service Offering How customised are the goods and/or services?
off the shelf standard offer limited
customisation
bespoke products /
services
Products: Uptime / reliability
Services: Productive time
How critical is the uptime / productive time for the
performance of the operations (project, well,
asset)?
n/a Limited Some impact High impact Integral to
operations
performance
Products & Services: Leadtime
n/a Ex stock Routine
requirement
Important to first
production
Important to first
production
Product & Services : Impact on
reputation
How critical is the failure of the product/ service
to Centrica's reputation?
n/a No/Low criticality Limited criticality Critical Highly critical
1. HSEQ risk of service
2. Product / Service Offering
3. Business criticality of product / service
SRPM SUMMARY
Contract Duration: 3 years + 2 x 1 year options
Tier 0 HSEQ Risk
Key Stakeholders:
(Attendance at SRPM Meetings)
Centrica Noble
Name Position Phone E-mail Name Position Phone E-mail
Executive
Jim Craig UK/NL
Operations
Director
+31(23)5569
254
Jim.craig@centrica.c
om
Eelke
Strikwerda
VP Division
Manager - Europe
+31(251)2
64520
estrikwerda@noblecorp.com
Marshall
Allerton
Projects &
Wells Director
+44(0)1224
415276
Marshall.allerton@ce
ntrica.com
Management
Ray
Morrison
Head of Wells +44(0)1224
415259
Ray.morrison@centri
ca.com
Lee
Reborse
Jonathan
Lilley
Wells
Operations
Manager –
UK/NL
+44(0)1224
415215
Jonathan.lilley@cent
rica.com
Steven
Petrie
Supply Chain
Manager -
Wells
+44(0)1224
415144
Steven.petrie@centri
ca.com
Peter De
Bruijne
Manager
Marketing &
Contracts
+31(251)2
64503
pdebruijne@noblecorp.com
Stuart
Mcilroy
HSE Manager -
Wells
+44(0)1224
415394
Stuart.mcilroy@centr
ica.com
Bram
Leerdam
Operations
Neil
Dewhirst
Drilling
Superintende
nt
+44(0)1224
415207
Neil.dewhirst@centri
ca.com
Sebastian
Van
Diemen
Drilling
Superintendant -
NJR
SvanDiemen@noblecorp.com
• Segmentation Matrix provides a set
of criteria to use for tiering suppliers
• Comment: the matrix is not a
mathematical tool but is meant to
provide a framework to evaluate
suppliers in a consistent way
• Relationship Management/ SRPM
Summary captures key stakeholders
in CLIENT and the supplier; logs their
position and contact details
• Logs the agreed performance
management tools and the type and
frequency of meetings
• Performance Review Plan - Logs the
schedule for key meetings
throughout the year
• Indicates the estimated timelines for
the preparations of these meetings

18. Number Date Action Action By Comments Status Date Closed
092 11/08/2011 Review requirements and actions required for third party personnel competency Noble
(Bram Leerdam
/ Peter De
Bruijne)
10/11/11 - Noble presented the process that had been developed.
Following a discussion on this subject it was agreed that a separate
'Contractor Competency Workshop' would be set up.
27/02/12 - 'Specialist Contractors Manual' under review and new process
will be piloted with Shell on the NHD. After the feedback from the pilot
findings will be shared with Centrica.
21/05/12 - Noble to update Centrica on Shell's trial in 2 months time.
08/08/12 - Update and feedback on pilot with the Hans Deul.
15/02/13 - Shell had session with thier contractors & Noble presented,
trial ongoing; meeting to be arranged to provide feedback.
23/04/13 - Pilot still ongoing on the Hans Deul, meeting will be arranged to
kick off requirements for roll out on NJR & NBW.
Open
097 07/10/2011 Combined offshore rig visit by senior management Centrica /
Noble
(Marshall
Alerton / Eelke
Strikwerda)
08/08/12 - Date to be agreed.
23/04/13 - Three dates in May proposed to Noble, will confirm which is
most suitable.
Open
116 15/02/2013 Noble drops presentation to be issued to Centrica Noble (Sam
Croft / Lee
Reborse)
23/04/13 - Lee advised that this would be issued. Open
119 23/04/2013 Personnel turnover target to be reviewed by Noble and proposal to be issued to
Centrica for review
Noble (Lee
Reborse)
Open
120 23/04/2013 Drilling schedule to be updated to make allowance for NJR shipyard work in
May 2013
Centrica
(Jonathan
Lilley)
Open
NOBLE / CENTRICA ACTION POINTS REGISTER FROM QPR MEETINGS
In the case study we will explain the steps and components of
the SRPM process (cont’d)
18
Performance Review DocumentContract Management Plan
54
Key SRPM tools/components
Performance Review
Summary & Action Plan
6 7
V
Key Performance Indicators (KPI's)Key Performance Indicators (KPI's) • Met target or better
• Slightly below target
• Below target
NOBLE Target Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Annual
YTD Comments
1. HSEQ
1.1 HEALTH & SAFETY
1.1.1 Participation at CEU HSEQ forum, if Applicable Subjective Assessment
1.1.2 Recordable Incidents (No), of Which 0/≥1
1.1.2.1 Lost Time Injuries (No) 0/≥1
1.1.3 High Potential Events (HIPO's) 0 3 8 0 0 0 0 3 1
Lump Hammer backloaded on Skip, York Platform ESD
Gas Leak aslo occurred during quarter
1.1.3.1 High Potential Incidents (HIPO's) - Risk Potential 1 - 4 0/≥2
1.1.3.2 High Potential Incidents (HIPO's) - Risk Potential 5 - 10 0/≥3
1.1.3.3 High Potential Incidents (HIPO's) - Risk Potential 11 - 25 0/≥4
1.1.4 Onshore/Offshore Site Audits/Visits 10
1.1.5 Record Working Manhours N/A 79,404 65,716 62,408 61,724 60,076 63,796 56,934 62,464 62,056
1.1.6 Issue Onshore/Offshore HSE Plan and Statistics 12
1.1.7 Emergency Exercises Subjective Assessment 0 0 0 1 0 0 0 1 0
Completed 3 offshore spill response exercises with
EPON1 submissions
1.1.8 Well Control Subjective Assessment 0 0 0 0 0 0 0 0 0
1.2 ENVIRONMENT
1.2.1 Environmental Incidents 0/1/≥2
1.3 QUALITY
1.3.1 NCR's Raised 0/≥1
1.3.2 NCR's Closed Out (Days Overdue) 0/≥1/≥30
1.3.3 Site Visits Carried out By HSEQ Reps/Senior Management (Per Annum) ≥2/1/0
1.3.4 Noble DACAR (Discrepancy And Corrective Action Report) ≥2/1/0 2
2. OPERATIONAL PERFORMANCE
2.1 NPT
2.1.1 NPT Time (%) <1% 4hrs BOP HPU, 7.75hrs Cat#5, 1hr DC Motor MP1
2.2 MAINTENANCE
2.2.1 Safety Critical Overdue tbc N/A 4 0 26 3 3 4 2 3
2.2.2 Operational Critical Overdue tbc N/A 3 2 3 0 0 2 2 2
2.2.3 Open Conditions of Class tbc 0 0 0 0 0 0 0 1 2
2.3 OPERATIONS
2.3.1 Rig annual objectives Subjective Assessment 1 1 1 1 1 1 1 2
3. PEOPLE
3.1 Personnel Competency, of Which >96% n/a
3.1.1 Personnel in Grace Period (% of Total Personnel) 14 14 46 22 35 n/a 11 17 28
3.2 Turnover of Personnel 0/≥1
4. VALUE
VALUE
4.1 Performance Review Per Qtr 1
4.2 New Technology or Industry Initiatives Subjective Assessment 1 1 2 1 1 0 0 0 0
4.3 Senior Management Relationship Meeting 1
4.4 Complete FPAL Feedback - Report 3 (Per Annum) 1
CENTRICA
1. GENERAL
5.1 Perform Pre Spud Well Briefings 100% N/A N/A N/A N/A SY1 Prespud in Q4 2012
5.2 Perform Safety Audits (Per Annum) tbc
5.3 Perform Management site visits (Per Annum) 4 1 3 1 0 4 2 0 1 3 ND+SB+CE/AR
5.4 Complete FPAL Feedback - Report 1 (Per Annum) 1
5.5 Invoices Paid < 30 days (%'age) 100%
PIONEERINGSPIRITHIGHPERFORMANCESAFETY
2011 2012 2013
• Performance Review document
contains information for the agreed
performance management measures
• Contract Management Plan is an
excel file containing:
‒ Agreed KPIs
‒ Dashboards
‒ Action Plans
• Performance Review Summary is
used for the notes of the
Performance Review
• The Action Log captures the meeting
notes, logs responsibilities and
agreed timelines
Performance Review Summary
Contractor: Noble
Contract: CEN0000544
Date: 23rd
April 2013 - Q1 2013
Location: Netherlands
Description: Provision of Mobile Offshore Drilling Unit Noble Julie
Robertson
Tier 0 HSEQ Risk High
Attendees:
Centrica Noble
Ray Morrison Jonathan Lilley Eelke Strikwerda Lee Reborse
Steven Petrie Mal Evans Peter De Bruijne Simon Johnston
Colin Esslemont Sebastian Van Diemen Sandy Fraser
Bruce Caldwell
Performance Summary:
Highlights
NBW:
- Overall a good campaign completed in the EIS;
- Good progress being made on yard work;
NJR:
- Successfully drilled deepest well in the rigs history
18,696’ (extended reach well TD’, elevated 350’ on legs
(6 feet to spare);
- Achieved 12 years LTI;
- Executed new 3 year firm contract (lifts morale
offshore);
- First gas & production on York platform
- Implementation of DROPS campaign
Lowlights
NBW:
- HiPO – Dropped clamp
- NCR – Side entry sub replaced but not drifted
NJR:
- HiPO – Back loading, lump hammer on cuttings skip
- Unidentified casing protector found on 2nd
PSV
- York platform gas release on export line ESV during
start-up

19. The first step is the tiering of the suppliers using the
segmentation matrix
19
Comments
1. Kick off meeting with key stakeholders – who should
attend?
2. Complete segmentation matrix (HSEQ contractor
risk matrix is used to determine the HSEQ risk)
3. Review and collectively agree on Tier of the supplier
Supplier Segmentation Matrix
Supplier / Contractor Segmentation Matrix - Noble
Tier No 3 2 1 0
Supplier Relationship Tactical Approved Preferred Strategic
A) Spend (by contract p.a.)
Wells / Completions <£1m £1m - £5m £5m - £10m £10m +
Projects <£1m £1m - £5m £5m - £10m £10m +
M&L <£100k <£1m £1m - £5m £5m +
Assets <£100k <£1m £1m - £10m £10m +
B) HSEQ rating
`
CEU HSEQ contractor risk rating
The HSEQ score is taken from the HSEQ
management of contractor process
Low Medium High High
C) Business Criticality - market characteristics
Product / Service Offering How customised are the goods and/or services?
off the shelf standard offer limited
customisation
bespoke products /
services
Products: Uptime / reliability
Services: Productive time
How critical is the uptime / productive time for the
performance of the operations (project, well,
asset)?
n/a Limited Some impact High impact Integral to
operations
performance
Products & Services: Leadtime
n/a Ex stock Routine
requirement
Important to first
production
Important to first
production
Product & Services : Impact on
reputation
How critical is the failure of the product/ service
to Centrica's reputation?
n/a No/Low criticality Limited criticality Critical Highly critical
Innovation
n/a None Market led Limited joint work Joint Innovation
Performance metrics
n/a Contract
deliverables (CD)
CD and/or KPIs CMP with KPIs CMP with KPIs
Number of available alternatives
n/a Lots of alternatives
(5+ alternative
suppliers)
Limited alternatives
(3-5 alternative
suppliers)
Sole / Single / Dual Sole source
Ease / risk / cost of change
n/a Limited risk of
change
Acceptable risk of
change
Manageable risk of
change
High risk of change
C) Business Criticality - supplier characteristics
Competency
How specialised is the knowhow required for the
product / service?
n/a Standard / basic
skills required
Experienced skills
required
Specialist skills
required
Subject Matter
Expertise required
Capability
How specialised is the equipment required for the
delivery of the service / manufacturing of the
product?
n/a Standard
equipment
Specialised
equipment
Highly supplier
specific equipment
Custom-made
equipment
Capacity Is there sufficient capacity available?
n/a Sufficient spare
capacity
Some spare capacity Limited spare
capacity
Limited spare
capacity
Spend to turnover ratio
What is Centrica's spend with the supplier as % of
supplier's turnover relevant to the contract?
n/a <1% <3% <5% >5%
Contract scope - geographic
asset specific
contract
regional contract national contract international
contract
Contract scope - content
single-service /
single-product
contract
single-service /
single-product
contract
multi-service /
multi-product
contract
multi-service /
multi-product
contract
Account management / customer tier
How important is Centrica for the supplier and
how is the supplier managing the account?
n/a Automated account Transaction account Key account Key account /
aligned business
model
Insert other factors as needed
… … … …
Insert other factors as needed
… … … …
8. Other supplier-specific factors
6. Supplier 3 C's
1. HSEQ risk of service
2. Product / Service Offering
3. Business criticality of product / service
5. Supplier dependence
4. Perceived value opportunity
7. Perceived importance as a customer
Responsibilities FREQUENCY
Contract
Sponsor
Contract
Owner
SCContact
Technical
Sponsor
HSEQRep
Supplier
Supplier
Tiering
Review and tier
contract / supplier
(segmentation
matrix)
Once C A R C R
1
The Tier determines the level of contractor
management that will be required
Segmentation Matrix

20. Identifying the key stakeholders is next and the information
is captured in the SRPM Summary form
20
Comments
• In addition to the core key stakeholders, consideration should be given to others who should be
included
• Engage with supplier to identify the respective key stakeholders
• Agree between both parties on the most appropriate and effective way of interacting
Responsibilities FREQUENCY
Contract
Sponsor
Contract
Owner
SCContact
Technical
Sponsor
HSEQRep
Supplier
General Inform the supplier about the SRPM
process and tasks
once C A/R R C C R
Relation-ship
mgt
Identify relevant stakeholders for the
contract in both organisations (CLIENT &
Supplier)
Once + regular
reviews
C A/R R C C C
Develop relationship matrix Once I A R C C C/I
Agree executive sponsorship for Tier 0
suppliers
Once A R R C/I
Assign responsibilities to CLIENT
stakeholders for engagement with supplier
counterparts
Once C/I A/R C/I C/I C/I C/I
Define interaction/s and engage with peers
at supplier organisation accordingly
annually C/I A/R R C/I C/I
SRPM Summary Form
2
The SRPM Summary form should be used to support the relationship and the performance
management aspects
SRPM Summary Form

21. The planned SRPM activities are captured and outlined in
an annual plan
21
Comments
•Agree activities and
attendees (performance
reviews, FPALs, HSEQ,
leadership meetings etc.) for
the contract / supplier
management and
relationship for the
performance year
•Agree dates for the
activities and arrange
venues etc
•All activities and key
engagements should be
agreed between both
parties
© Centrica plc, 2012
SRPM Process – Contractor- Drilling (Tier 0 supplier)
1
Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Develop/update stakeholder map
Management or Leadership Site Visits
Hold performance review
Relationship management
Define/agree interactions
Engage with suppliers Ongoing activity (formal and informal)
Supplier / CEU ‘wash up’ meetings At the end of a project or contract
HSEQ Meetings
Performance Year
Bi-weekly (incl. well service contractors
Other inputs and activities
Issue 5 working days before QPRIssue CMP data (scorecard) to attendants
Collate other CEU & supplier inputs/
presentations (strategy, plans, …)
Prepare/validate CMP
Collect input for CMP from
supplier and CEU
Allow 2 weeks for preparation
FPALs
Completed in Q1 for the year.Plan/schedule performance
reviews for the following year
Minimum of 1 FPAL
Executive annually, SMT bi-annually
Reviewed annually
Part of SRPM Summary
RemarksActivities
Prepare CMP for reviews
Responsibilities
FREQUENCY
Contract
Sponsor
Contract
Owner
SCContact
Technical
Sponsor
HSEQRep
Supplier
Performance
review admin
Plan yearly Contract Mgt Plan activities
(performance reviews, FPAL, logistics of
mtgs, agenda, …)
annually I R A/R C/I C/I C/I
Set-up meetings in line with Tier
requirements (agenda, dates, …)
annually I R A/R I I C/I
3
Performance Review Plan

22. The Contract Management Plan captures the KPIs and
thresholds and the inputs for the dashboard
22
4
1) Objectives and KPI's jointly agreed between COMPANYand CONTRACTOR
2) Objectives and KPI's shall be reviewed on an annual basis to ensure they are in line with corporate objectives
3)
4)
5) CONTRACTOR to provide short presentation at the performance meeting based on the following agenda;
- Operational Summary Overview
- Performance Overview (focus on trends or any major areas of concern)
- CONTRACTOR new or key initiatives and how they add value to CONTRACTOR and or COMPANYoperations
- COMPANYnew or key initiatives and future operations plan
- AOB
6) Updated Action Register will be issued within 5 working days of the performance review meeting by COMPANY
Contract Management Plan
Guidance Notes
CONTRACTOR to complete Contract Management Plan (Scorecard and Operations Summary) and submit to COMPANY
Drilling Superintendent who shall verify the data prior to performance review meeting.
Upon confirmation of agreement from COMPANYDrilling Superintendent the CONTRACTOR shall issue the CMP
package to COMPANYSupply Chain Representative at least five working days prior to the Performance Review meeting.
Comments
• The CMP holds the contract objectives and a suite of KPIs
• The CMP is developed between CLIENT and the contractor/
supplier
• There are two phases working with the CMP
Development of the CMP
‒ At the start of the contract CLIENT and the
contractor/supplier agree a set of KPIs and the respective
thresholds
• The KPIs are general and contract specific
• The thresholds will differ by the type of service or
product
‒ Input from CLIENT stakeholders (contract objectives and
KPIs) is required
‒ The KPIs and thresholds are mutually agreed
between CLIENT and the contractor
Regular updates of the CMP
‒ Prior to performance reviews (PR) issue the CMP to
contractor / supplier to complete
‒ Validate CMP data with CLIENT stakeholders and log or
address any queries before the PR
Contract Management Plan

23. Performance Review document capture key information for
the meetings
23
Performance Review
Q1 2013
Contractor
5
Comments
• The document supporting the Performance Review covers a
range of topics
‒ Summary of the dashboard from the ‘Contract Management
Plan’ containing
 HSEQ performance (standard + contract specific KPIs)
 Operational performance (standard + contract specific
KPIs)
 Other contract specific KPIs (depending on type of
commercial agreement, e.g. incentivised remuneration,
...)
 KPIs covering People, Values, ...
‒ FPAL feedback (for countries where applicable)
‒ Relationship Matrix
‒ Business outlooks for CLIENT and the supplier
‒ Optional: Specific topic of interest agreed between CLIENT
and the supplier (e.g. innovations, new services, ....)
• The performance review follows an agreed agenda
• The document to support the meetings is compiled by the
SC contact
• The SC contact issues the document to the attendees 5
days prior to the meeting
Performance Review

24. Action Plan
• File to log agreed actions, responsibilities and
timelines
• Allows to track status of actions
• A review of the action plan should form part of the
agenda of every performance meeting
Notes are captured in the Performance Review Summary &
actions logged in the Action Plan
Performance Review Summary
• Standardised format to capture notes and key
topics from the Performance Review
24
6
7
Performance Review Summary
Contractor: Noble
Contract: CEN0000544
Date: 23
rd
April 2013 - Q1 2013
Location: Netherlands
Description: Provision of Mobile Offshore Drilling Unit Noble Julie
Robertson
Tier 0 HSEQ Risk High
Attendees:
Centrica Noble
Ray Morrison Jonathan Lilley Eelke Strikwerda Lee Reborse
Steven Petrie Mal Evans Peter De Bruijne Simon Johnston
Colin Esslemont Sebastian Van Diemen Sandy Fraser
Bruce Caldwell
Performance Summary:
Highlights
NBW:
- Overall a good campaign completed in the EIS;
- Good progress being made on yard work;
NJR:
- Successfully drilled deepest well in the rigs history
18,696’ (extended reach well TD’, elevated 350’ on legs
(6 feet to spare);
- Achieved 12 years LTI;
- Executed new 3 year firm contract (lifts morale
offshore);
- First gas & production on York platform
- Implementation of DROPS campaign
Lowlights
NBW:
- HiPO – Dropped clamp
- NCR – Side entry sub replaced but not drifted
NJR:
- HiPO – Back loading, lump hammer on cuttings skip
- Unidentified casing protector found on 2
nd
PSV
- York platform gas release on export line ESV during
start-up
Other:
Personnel
- ARM (nights), 2 x roughnecks & roustabouts will go from NBW to the Regina Allen;
- NJR had 5 people who left in Q1, 2 were dismissed (no senior positions);
Operations
- The NBW is currently planned to leave the shipyard c.15
th
June 2013, unlikely this would come forward but could potentially be
delayed due to issues or weather;
- Stena Spey yard work is a risk to NBW as the rig cannot leave dry dock until the Stena Spey has completed its work;
- The importance of a comprehensive search for dropped objects prior to leaving the yard was emphasised by CEU;
- Shipyard visit planned for the NJR in 2014, earliest would be the first well completed after April. Work planned to take 6 weeks
in either a UK or NL shipyard (tbc), the work will include steel replacements, accommodation refurb and possible crane
reconfiguration and upgrades(tbc);
- Back loading tagging system to be piloted on NJR, discussions also in progress with Asco for out bound cargo;
- There has in Q1 been a high level of inspection undertaken by HSE on the NJR, as a result of jacking system on Regina Allen
failure, feedback has been both positive and beneficial;
- Regina Allen findings to be issued Q2 2013
Misc.
- Improvement on invoice payments with no major concerns (one overdue for NBW)
If it is evident that performance does not meet expectations a Performance
Improvement Plan needs to be developed (-> see next page)

25. A Performance Improvement Plan is developed if it is evident
that performance is not meeting expectations
Performance Improvement Plan (PIP)
• Actions defined in a PIP should be measurable, have clearly assigned responsibilities and timelines
• The PIP will be added to the agenda of the performance review meetings or covered in separate
meetings (depending on the frequency of planned interactions)
Activities to develop a PIP are covered in the RACI
25
Responsibilities FREQUENCY
Contract
Sponsor
Contract
Owner
SCContact
Technical
Sponsor
HSEQRep
Supplier
Performance
Improvement Plan (if
required)
Identify areas of concern Ad hoc C A/R R C C I
Identify/agree measures how to improve Ad hoc C A/R R C C R
Agree how to measure progress (KPI’s,
frequency, …)
Ad hoc C A/R C C C R
Draft Performance Improvement Plan (PIP) Ad hoc I A/R R C/I C/I R
Integrate into regular performance review Ad hoc I A/R R I I I

26. SRPM
Objectives/process/RACI...
Case study
Wrap-up & Questions
HSEQ Mgt of Contractors Process

27. Wrap-up & questions
27
Wrap-up
Let’s look back at the objectives we
had - did we achieve what we
aimed for?
Questions & feedback
• Any questions which have not
been addressed?
• We would like to get your
thoughts/feedback:
– What you felt went well?
– Did not go well?
– Unclear?
Topic Achieved? Comment
Outlined the objectives
of SRPM
... ...
Depicted the SRPM
process
... ...
Explained who they key
stakeholders are
... ...
Outlined the roles &
responsibilities
...
Shared how the process
is deployed
... ...