2. Procurement Strategy
• Vision: To create a Customer Focussed Enterprise to achieve increased procurement
effectiveness, efficiency and compliance resulting in significant financial benefit.
Gather Input
Develop
Strategy
Plan
Execute &
Manage
Plan
Do
Check
Act
3. Drivers for non compliance
• Lack of clarity
• Lack of management commitment
• Lack of SOP’s.
• The “Box Ticking” Approach
• Inability to have a system wide approach
6. Building Capabilities
Group Procurement Head
Procurement
Head FPSO
Procurement
Head Drilling
Procurement
Head
Shipping
Category
Manager
Strategic Sourcing
Manager
Functional
Specialist
Contracts
Expert
Category
Analyst
Buyer
Finance
Expert
7. Building Capabilities
Integrate Procurement Function with each Business Unit
Define timelines for procurement activities
Develop Standard Operating Procedures
Recruit Personnel
Provide Training on Procurement Platforms
Develop Management Trainee Program
Define responsibilities for each role expressly
9. Total Value of Ownership
1
• Price : Negotiate the price by developing Supplier capabilities,
Negotiate based on type of product
2
• Usage and Innovation: Manage demand effectively, Early Supplier
Involvement for Innovation
3
• Risk and Sustainability: Identify and Mitigate risks, Broaden usage
of standardized products, Creative re-cycling
4
• Process and Operational Efficiency: Ensure quality, monitor
progress and supplier efficiency.
10. Advantages of Centralised Procurement
Reduced Overheads
Better Spend Analysis – Cost Savings
Centralized Records of Procurement
Better Supplier Relations
Better Inventory Control
Use of E- Platforms – transparency, visibility, fairness
Volume Discounts over various product categories
11. Supplier Differentiation
Strategic
Heavy negotiation, Supplier Process Management, Analyse market and
competition
Leverage
Promote Competitive Bidding, Exploit Market Cycles, Use Industry
standards, Pro-active Sourcing
Bottleneck
Widen specifications, Develop new suppliers, Medium term contracts
Fig: Kraljic Matrix
