Leading global excellence in procurement and supply Corp.docx

Leading global excellence in procurement and supply
Corporate Award Submission and Assessment Feedback
Candidate Membership Number: 005560614
Programme: SABIC C6 P Integrative
Event ID: 106704820
Assessment Opportunity: 4 Integrative Assignment
This Assessment Distinction Merit Pass Fail N/A
• Creation of a logical flow of content
• Incorporation of numbered contents page, executive summary,
sections that cover conclusions and recommendations when
relevant, references and bibliography
• Ease of understanding the content included
• Layout of text, inclusion of graphics, tables, data, references,
headings, numbered paragraphs
• Use of appropriate appendices
• Composition of answers in keeping with any desired word
count,
timescales or other limitation
• Collation of primary and/or secondary research

• Use made of quantitative and/or qualitative data
• Analysis of the research conducted
• Reasoned critique of research provided
• Acknowledged information sources
• Demonstration of acquired understanding of theory, models,
techniques, processes, outcomes or other aspects of the syllabus
• Appropriate selection of content to formulate answers
• Methodology pursued to develop answers
• Application of theory, models, techniques, processes,
outcomes
or other aspects of the syllabus
• Creation of proposals for change that can achieve business
improvement
• Recognition of boundaries that can affect proposals made
• Production of a business case or implementation plan when
relevant

1
Strengths and weaknesses of the assessment:
Thank you for your assignment.
This task requires you to develop a document that creates a
sourcing plan for future requirements. Better
marks would therefore have been awarded if you had linked
your summary promoting your main findings
and recommendations in relation to the tasks which were for
you to explain:
1. The roles of procurement and supply in managing this area of
expenditure underlining the inputs
that may be made by its stakeholders
2. Techniques that can be applied to the area of expenditure to
improve added value
3. Inclusions that should be made in contracts formed in the
future
4. Measures that can be taken to select effective suppliers
5. Any aspects of the purchase/supply that may require
negotiation
Your executive summary served more as an introduction than
underlining your main findings and
recommendations in relation to the selected category of tubular
goods. These could therefore have focused
more directly on the roles of the procurement/ supply chain
function in managing the tubular goods

category underlining the inputs that may be made by its
stakeholders, the application of any techniques to
add value as well as the improvements that could be made to the
contracts or to improve performance etc.
Your introduction then included discussion on procurement and
the need for alignment of corporate
strategy and whilst these were true you could also have applied
these more to SABIC as the section tended
to adopt a very general essay on these aspects rather than
providing organisation specific details.
You did cover points 1-5 as mentioned above but did so in a
very general way which did not directly relate
to your organisation instead mentioning various geographic
locations but not specific suppliers or relating
any of this discussion directly to SABIC.
Whilst you did provide an impressive bibliography and referred
to a range of references within the main
body the assignment itself did not answer the task asked. Also
there was little or no mention of any of the
tools and models taught on the programme. It is worth noting
that a key element of the assignment process
is to enable you to demonstrate how the tools and techniques
taught on the programme can be applied to
your organisation. For example, Mendelow, SWOT, PESTLE, 5
Forces, Kraljic and SPM could all be used in
this assignment as well as negotiation theory including BATNA.
So it would have been better to have introduced the area of
expenditure that was used to base your analysis
and then to have outlined your answers to these five tasks. The
lack of a specific discussion of suppliers or in
-depth analysis of a supply market throughout your report led to
the report being very descriptive and not

very analytical and not applied directly to SABIC.
Your conclusions section was also very brief and could have
been expanded upon and you could have
included recommendations section as well.
2
Areas for improvement:
The key to gaining better marks is to structure your answer
around a product or service category as asked
for in the question. This then allows you to provide a sourcing
plan specific to that category and your
organisation rather than provide a very generic discussion
which does not address the question asked. You
are advised to undertake primary research into your suppliers,
the contracts that are in place, the
performance of these suppliers, your stakeholders etc. to more
directly answer the assignment tasks. You
can then cover the stage-by-stage process following the
procurement cycle from need identification through
to contract award. You must identify the various models that
can be used to assist you at each stage and
specifically apply them to your chosen category. This will help
you address the question that you were asked
You can then proceed through each of the stages of a
specifically designed sourcing plan. A major
consideration is the requirement for pre-qualification appraisal
and this should therefore be a key area

within this report. To improve this report you need to start by
outlining the product or service then the
complexities of the market, how value will be added to your
organisation by providing these services, your
methods of market research, your recommendations for the best
type of specification and contractual
terms (i.e. recommending key clauses), methodologies of pre-
qualification appraisal and the bidding
process.
You should then proceed to design the award criteria, discuss
how this will be evaluated, the use of
negotiation to add value and finally, reference to contract
management. It is important to underline that
this is a practical application rather than an academic review of
the procurement processes. As mentioned,
it is important that you select and use a broad range of models
and tools but ensure you do not simply
present generic versions.
You should also provide an executive summary which provides
a full summary of your whole report as well
as a conclusions and recommendations section at the end.
Corporate Award Submission and Assessment
FeedbackStrengths and weaknesses of the assessment:Areas for
improvement:
Classification: Internal Use
CORPORATE AWARD PROGRAMME

ASSIGNMENT FRONT SHEET
STUDENT MEMBERSHIP NUMBER
COHORT NAME and NUMBER
Cohort 6
ASSESSMENT Code / Number
AS4
MODULE TITLE
Integrative Assessment 4
SUBMISSION DEADLINE DATE
WORD COUNT
3292
Please do not change or remove the wording in this front sheet
as this is required for all submissions under the Corporate
Award Programme. Any submissions received without the
correct front sheet will be returned to the candidate for
amendment and re-submission and may delay marking.
1. Please ensure that you complete and attach this form to the
front of your submission. It will not be accepted if it as sent as
a separate file to the submission itself.
2. Before submission, please ensure that your name does not
appear anywhere on your work.
3. By submitting your work, you are confirming that your work
is your own and that you have read and understand CIPS rules
regarding plagiarism and the consequences that will arise
should you submit plagiarized work.

Table of Contents
Contents
Executive Summary 3
Introduction 5
1) The roles of procurement and supply in managing this area of
expenditure underlining the inputs that may be made by its
stakeholders 5
2) Techniques that can be applied to the area of expenditure to
improve added value 7
Market Knowledge 7
Comprehensive Analysis 8
Strategic Sourcing 9
(3) Inclusions that should be made in contracts formed in the
future 9
Incentives and Pricing Model 9
Data Security 10
Service Level Agreements 10
(4) Measures that can be taken to select effective suppliers 11
Calling upon suppliers in early product development process 11
Establish priority for long term relationships with the suppliers
12
5) Any aspects of the purchase/supply that may require
negotiation 12
Conclusion 13
Recommendations 14
References 15
Executive Summary
TheSaudi Arabian Basic Industries Corporation (SABIC) trades
petro-chemicals. It is a multinational company in the chemicals

industry which has aligned its procurement and supply
management strategy with its overall organization strategy. The
company has aligned its procurement and supply management
strategy with its overall organization strategy. Its’ roles involve
market analysis where procurement and supply departments
obtain prior information and therefore weigh the options this
department has and of course settles for the less costly while
still adhering to overall quality. Through the procurement
governance role, regulations are set before and thus manage the
expenditure related to legal claims.
With an aim to improve added value, the SABIC employs
certain techniques relating to the expenditure in stationery and
office supplies. . The company adopts a comprehensive analysis
whereby both the supplier and the buyer’s interests are
considered therefore improving the added value. The company
boosts its market knowledge by employing both the SWOT and
the PESTEL analysis. For future contracts between the SABIC
and other companies, there needs to be additional inclusions.
These include : incentives and pricing models for suppliers and
the buyers, data security provisions, service level agreements
and alternative dispute resolution mechanisms. This will
improve the relationships between the company and its
stakeholders and consequently the company’s performance.
Additionally, selection of effective suppliers will involve
measures such as calling upon suppliers in the early
development process and seeking to establish long-term
relationships with the suppliers. Aspects of the purchase or
supply that may require negotiation include the length of the
contractual relationship and the terms and conditions involved.
The recommendations to the stakeholders of the SABIC are
embracing clarity and diversification in the choice of suppliers.
Introduction
They want sourcing plan, provide sourcing plan for this product
by answering the 5 questions , it’s too general , it needs to more
specific for SABIC and analytical and practical not academic.
Many procurements units achieve poor performance because of

failing to recognize their functional ability or the impact of
procurement aggregates which play a huge role in the increasing
the value of an enterprise. The impact of effective purchasing
doubles the role played by financial benefits, which can only be
delivered after spending well on the management. This implies
that the suppliers recruited to procure services for the
organizations greatly determine the extension and growth of the
purchasing power of an organization. If suppliers brought to the
table are sub-standard, the organization will have a minimal
extension, on the contrary, and when stellar performers are
employed they will deliver stellar benefits which will promote
the success of an organization.
The SABIC Company is still not at this level of achievement. It
is with reference to the SABIC Company that this paper
addresses a sourcing plan to be used for future requirements.
The discussion will cover the roles of procurement and supply
in managing expenditure in stationery and techniques that can
be improved to this expenditure so as to improve added value.
In addition to this, inclusions that should be made in contracts
formed in the future, measures that can be taken to select
effective suppliers and a discussion of any aspects of the
purchase or supply that may require negotiation will be made.1)
The roles of procurement and supply in managing this area of
expenditure underlining the inputs that may be made by its
stakeholders Comment by Qahtani-Al, Khuloud Mohammed.:
Comment by Qahtani-Al, Khuloud Mohammed.:
Comment by Qahtani-Al, Khuloud Mohammed.:
The Saudi Basic Industrial Corporation deals with
petrochemicals and one of the areas of this expenditure is
stationery and office supplies. The reason of my choice for this
area of expenditure is that it might look easy but it not and
every company in the market from insignificant companies to
very large company such as SABIC purchase these materials.
Office supplies might be classified as unurgent requirements.
However, often ordered in huge amounts and has a lot of
number of End Users and stakeholders because these items

ordered from all SABIC entities and departments comparing to a
specific material ordered by certain affiliate such as gas mixture
or methanol!. Office supplies could be differentiated as stocked
and non-stocked which is ordered as requested and as per End
User specific requirements (spot purchase), where stock items
are usually under pre agreed contracts with big five suppliers in
SABIC to accommodate the huge order. Long term agreements
are created for office supplies in which a release order is
created any time during the life of this agreement, one of the
key products in SABIC which is under those agreements are
office supplies. Long term contracts has thousands of materials
with fixed prices and agreed delivery time and terms and
conditions.
Another tool, SABIC recently has established a catalog for End
user for office supplies from different contractors which enable
the End User to make the purchase by himself choosing the
preferred contractor. One of the difficulties for SABIC End
Users, SABIC has large number of affiliates which are different
legal entity with unique standard and way of doing the business.
However, as procurement in SABIC with unified standard,
regulations and policies. As A buyer in SABIC you will face a
lot of number of stakeholders for office supplies with different
requirements. In my opinion, for these items the spot purchase
might be more applicable.
Procurement and supply activities have in the course of their
operations managed stationery’ expenditure. The management of
expenditure related to stationery has not been a sole effort of
procurement and supply but also for other stakeholders in this
company. Through procurement governance, SABIC has set the
rules and guidelines along which procurement of stationery and
other products will be done. SABIC Global Procurement Service
has detailed and thorough policies and procedures. Setting of
these policies is done by the legal department of this company.
The main job of this department is to create these policies and
to communicate with all stakeholders such as buyers.
Collaboration between the procurement and the legal

departments in setting and implementing corporate governance
policies help to keep the expenditure at bay. The suppliers of
stationery are normally made aware of these policies beforehand
and this helps them to stick to the policies when supplying their
products. Legal claims that may arise in cases of breach are
therefore for the supplier and not the SABIC.
Procurement and supply in SABIC manages the expenditure in
stationery through incorporating the ideas of various
stakeholders in this company relating to this expenditure. For
instance, a cost might be a priority for a stakeholder and
another might have a different priority depending on
circumstances like urgency and key materials. SABIC
Procurement through their global procurement system, work
hand in hand to hand with the business to support so as to
achieve their vision and consequently managing the related
expenditure. Suppliers for stationaries to SABIC have discounts
and product warranties. An example of this supplier is the
Jubail Stationery. Utilizing discounts that come with bulk
buying helps in the managing the expenditure related to office
supplies.
With an aim of managing expenditure related to stationaries and
other office supplies, the procurement and supply unit of SABIC
usually analyzes the market trends before inviting suppliers for
tenders. With this information, suppliers who bid for these
tenders are evaluated basing on the set criteria. This saves the
company’s resources and ultimately manages the related
expenditure. Together with stakeholders from other department
for instance accounts, procurement and supply units usually
budgets and further monitor their spending through this tool.
SABIC has a dynamic Supplier Relationship Management unit,
and their job is to qualify suppliers in term of their products and
services, the quality, the size of their business and their ability
to comprehend the requests from SABIC with its standards and
polices before registering them as SABIC vendor with a unique
SABIC vendor code.2) Techniques that can be applied to the
area of expenditure to improve added value

With an aim of improving added value , stakeholders in the
SABIC can embrace a number of techniques. For this
discussion, expenditure related to stationery and office supplies
will be considered.
It is worth noting that a key element of the assignment process
is to enable you to demonstrate how the tools and techniques
taught on the programme can be applied to your organisation.
For example, Mendelow, SWOT, PESTLE, 5 Forces, Kraljic and
SPM could all be used in this assignment as well as negotiation
theory including BATNA.
The lack of a specific discussion of suppliers or in -depth
analysis of a supply market throughout your report led to the
report being very descriptive and not very analytical and not
applied directly to SABIC.
Market Knowledge
This refers to understanding what are you buying in term of
cost, material description and what is the use of the material.
Proper analysis of the stationery and office supplies market by
SABIC is crucial in ensuring proper quality products are bought
for the company. This is also key in comparing prices and
consequently settling for the most affordable alternative given
the suppliers in the market. According to the Porter’s five
forces model, better analysis and further communication of the
needs of the company will facilitate the choice of the supplier.
Once chosen, the stationery and office supplier in this instance
will know what to deliver to this company. In a nutshell having
an understanding of the market by both the supplier and the
company helps in addressing the specific niche and thus adding
value.

Threat of new Entry
Supplier Power
Buyer Power
Competitive Rivalry
Threat of substitution
Figure 1 Porter's Five Forces
Market analysis enables procurement to understand how
the supply market works, the direction in which the market is
going, the competitiveness and the key suppliers within the
market. The results of this analysis can help the buyer to
improve and shape the strategy and tendering process and align
their behavior in order achieve better value for money, reduced
prices or an improved service.
Comprehensive Analysis
Comprehensive analysis of the supplier’s strengths ,weaknesses,
opportunities and threats is really crucial in improving the
added value to the stationery and office supplies related
expenditure. Through proper identification of the suppliers’
strengths and weaknesses, the procurement team may match
with their considerations and make a decision. The company’s

external environment and how it is susceptible to risks is also
key in decision making with an aim of adding value. If for
instance SABIC realizes that Jubail is facing environmental
challenges in its main processing plant and therefore may not be
able to deliver the supplies, SABIC may seek alternatives
momentarily as this is sought. Through this business continuity
is ensured and improved value comes forth as a consequence.
The PESTEL analysis can be used for this.
Strategic Sourcing
To improve added value with reference to expenditure on
stationery and office supplies in the SABIC, strategic sourcing
can be implemented. In the early years of the operation of this
company, buyers used their experience to seek suppliers.
However, in the recent past, a new tool has been implemented in
SABIC’s procurement where buyers have visibility to suppliers
performance. Buyers can view the supplier performance in term
of delivery time and quality of products and history of delivery
rejection, shortage or overage. This saves the time and cost
involved in seeking quality suppliers and ultimately improves
the business value.(3) Inclusions that should be made in
contracts formed in the future
SABIC is improving daily in its procurement processes and
contracts. The company has however not achieved its desired
heights in this practice. With an aim of bettering its
performance in sourcing plans, there needs to be certain
inclusions.
Incentives and Pricing Model
A good procurement contract involves negotiation and
consideration of terms from both parties. The most important
thing apart from the direct cost is that the organization and the
supplier are incentivized properly to ensure that the relationship
works out. This calls for coming up with a compensation regime
which will ensure that the supplier has incentives to meet the
objectives of the agreement as well as sufficient penalties in the

event that well-defined metrics are not reached at. The current
SABIC’s contract with Jubail does not involve this provision. It
will be quite a good thing to have it in the contracts formed in
future. This will help the company in having an edge in the
‘battle of forms’ should it happen.
Data Security
Security inclusions are very important in any sourcing
contract. Compliance with the best practices in the industry
such as the ISO 27002 and ISO 27001, and PCI Data Security as
well as the information control objectives, auditing and
penetration testing, breach reporting, and cyber security
provisions insurance are all critical in the case of any breach
(Blanchard, 2010). This saves the company’s reputation and
value in these instances. It is imperative for SABIC’s contract
with Jubail in future to have this.
Service Level Agreements
The organization should spend time on the contract front so as
to make sure that Service Level Agreements are defined
productively and will significantly benefit the relationship with
the suppliers that is founded on mutual benefit and trust. These
will for example ensure timely delivery and thus a gain for both
the company and the supplier. The service level agreements in
the contract between SABIC and Jubail does not involve service
level agreements. In future, including this will make the
contract better.
Alternative Dispute Resolution Mechanisms
The manner in which disputes are contractually resolved can
have a great impact on the complexity as well as the costs
related to addressing issues that are likely to arise. For example,
they can be forum and venue restrictions that limit disputes to
certain types of courts or states, or they may require informal
dispute resolution or binding arbitration. Planning for issues
that are inevitable at the front can assist in ensuring that in the
event problems come up, the organization and the supplier can

address the issue constructively without the issue getting out of
control. The organization should take into consideration dispute
resolutions options now that this can be more accessible to the
organization owners and encourage a more efficient and faster
resolution of issues before they escalate (Barsky, 2001).The
contract for stationery and office supplies in SABIC has the
court as the only alternative in case of a breach. Future
contracts should expand this to involve alternative dispute
resolution mechanisms so as to better the contract.(4) Measures
that can be taken to select effective suppliers
Selection of effective suppliers marks a successful step in
sourcing for a plan in procurement. For the SABIC, the
following measures can be taken in order to select effective
suppliers:
Calling upon suppliers in early product development process
In the past, a typical product processing would go through a
number of activities that mainly include; it may start to be
processed by marketing function, then conceptual design,
engineering design, and analysis, followed by testing then
finally it goes through detailed design, manufacturing
engineering, process planning, tooling, production planning,
purchasing, machining, assembly, testing, packaging,
installation, and marketing for it to be certified as a final
product (Anderson and Dekker, 2009).This cycle worked for
many companies including the SABIC.For this suppliers would
be called in the delivery phase and this placed them at a
disadvantage as they could not exactly know what to deliver. As
a result, many procurement contracts failed due to non-
performance and caused the companies great losses. The
alternative to this would be that SABIC chooses the suppliers
earlier in the product development cycle so as to give them the
chance to assess the business model and know what to deliver.
With this, Jubail for instance will meet the stationery and office
supplies needs for this company effectively and thus improve
performance.

Establish priority for long term relationships with the suppliers
In several occasions, the suppliers in the SABIC were only
brought on board to compete with the pricing of the end
product. This would lead to an increase in the number of
suppliers in the company even if different suppliers were
deployed to supply different products With this came difficulty
in the establishing efficient long-term quality relationships that
could suit the satisfaction of the client and crumbled the
procurement contracts. If the SABIC establishes priority for a
long term relationship with its suppliers for example those for
stationery and office supplies, the procurement contracts can be
sustained over a long period thus making business effective and
more productive.5) Any aspects of the purchase/supply that may
require negotiation
According to the negotiation theory, it is the buyer’s
responsibility to maintain high quality while still negotiating
for better terms and conditions of the contract. With reference
to the stationery and office supplies contract in the
SABIC,negotiation between the SABIC who in this case is the
buyer and Jubail, the seller should be on the length of the
relationship. The short-term benefits are not the most important
thing in any contract but a relationship that will last for long
even after the sourcing process has been completed. Through
negotiation, the organization comes up with alliance parties
networks, which are very important. In hard economic times for
instance, Jubail can still supply stationery to Jubail if they
would have financial difficulties. This will ensure business
continuity which is a great advantage.
Negotiation in the SABIC can also be on the terms and
conditions of the contract that the company has with the
suppliers. The parties involved in the contract need to discuss
every aspect of their contract carefully and ensure that the
objectives of both sides are well as acknowledged and met. In
any negotiation process, the organization should always settle
for a win-win solution that will benefit both parties. The

procurement/supply process should also involve negotiating on
the objectives of the organization met. Negotiation on the
general terms of the contract should also be done. This should
involve the services and goods being supplied, the amount of
goods that will be supplied and standards of the supplied goods
and services.Conclusion
In conclusion, procurement and supply play an important
role in managing stationery and office supplies expenditure in
the SABIC Company. This however involves the input of other
stakeholders in some instances. These roles involve market
analysis where procurement and supply departments obtain prior
information and therefore weigh the options this department has
and of course settles for the less costly while still adhering to
overall quality. Through the procurement governance role,
regulations are set before and thus manage the expenditure
related to legal claims. With an aim to improve added value, the
SABIC employs certain techniques relating to the expenditure in
stationery and office supplies. The company boosts its market
knowledge by employing the strengths,weaknesses,opportunities
and threats(SWOT) analysis and the PESTEL analysis. The
company also adopts a comprehensive analysis whereby both
the supplier and the buyer’s interests are considered therefore
improving the general approach.
For future contracts between the SABIC and other
companies, there needs to be additional inclusions. These are
the incentives and pricing models for suppliers and the buyers,
data security provisions, service level agreements and
alternative dispute resolution mechanisms. This will improve
the relationships between the company and its stakeholders and
consequently the company’s performance. Selection of effective
suppliers will involve measures such as calling upon suppliers
in the early development process and seeking to establish long-
term relationships with the suppliers. Aspects of the purchase or
supply that may require negotiation include the length of the
contractual relationship and the terms and conditions
involved.Recommendations

The SABIC Company should embrace clarity in the provisions
made in its contracts so that both parties are made aware of
their expectations before-hand. This will help in managing the
expenditure in contracts and further add value to the company.
The SABIC should also diversify its choice of suppliers so as to
minimize the risks involved in depending on one supplier. This
will eventually better its negotiation.
Write more in recommendation , solutions , I suggest to
incorporate the idea of digitalization in procurement as it’s a
new project in SABIC procurement and what should they do for
this product.
Another point is agility .
Another area SABIC is focued on the people development , I
want you to link it to this product and recommendation.
References
Barsky, N. P. (2001). Unleashing the value in the supply
chain. Strategic Finance : 32-37.
Blanchard, D. (2010). Supply Chain Management Best
Practices, 2nd edition. New York: Wiley
Handfield, R.B., and D.R. Krause. (1999). Think globally,
source locally. Supply Chain Management Review. 35(1): 36–46
Huang, H., X. Shen and H. Xu., (2016). Procurement contracts
in the presence of endogenous disruption risk. Decision
Sciences 47(3): 437-472
Institute of Management Accountants. (1999). Tools and
Techniques for Implementing Integrated Supply Chain
Management. Institute of Management Accountants.
Kopczak, L. R. and M. E. Johnson. (2003). The supply-chain
management effect. MIT Sloan Management Review: 27-34

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