Presentation Materials for Prize winning Paper

1. Driving BUSINESS VALUE on the Technology Frontier
e-Procurement through Supply Chain Integration
Reaching out to the SMB’s
Dr. Graham R Smith
SAP Supply Chain Superintendent
Sohar Aluminium, Sultanate of Oman
September 17-20, 2006 ● The Fairmont Dallas ● Dallas, Texas ● simposium.simnet.org

2. Introduction to the team
Dr Graham R Smith Mr. Erkan Gulec
SAP Supply Chain Superintendent, Dr Maha Shakir
Pre Sales Director
Sohar Aluminium LLC, Assistant Professor,
SAP Arabia, UAE
Sultanate of Oman College of Information Technology,
BSc Industrial Engineering
BSc, MSc, PhD Computer Science Zayed University, UAE
MBA Supply Chain Management
MBA, MBCS, FIAP, MCIPs BSc Eng, MEMgt, DipInfSc
SAP Certified Consultant
PhD Information Systems
PO Box 111, PC 118 Al Harthy Complex, PO Box 53188, Dubai, UAE
Oman PO Box 4783 Abu Dhabi, UAE
Phone: +971-4-3301777
Phone: +968-24660578 Phone: +971-2-4079693
GSM: +971-50-4517941
GSM: +968-92815137 GSM: +971-50-3272748
E-mail: Graham.Smith@sohar- E-mail: Maha.Shakir@zu.ac.ae E-mail: Erkan.Gulec@saparabia.com
aluminium.com
September 17-20, 2006 ● The Fairmont Dallas ● Dallas, Texas ● simposium.simnet.org

3. Introducing Petroleum Development Oman
Responsible for
Oil People
Gas
Community
September 17-20, 2006 ● The Fairmont Dallas ● Dallas, Texas ● simposium.simnet.org

4. Introducing Petroleum Development Oman
The Infrastructure
2,500 wells
100 fields
7 airstrips
2700 kms of pipelines
527 kms of hard-topped roads
6013 kms of graded road
The oil industry alone accounts for 40% of Oman’s
Gross Domestic Product - GDP
September 17-20, 2006 ● The Fairmont Dallas ● Dallas, Texas ● simposium.simnet.org

5. “To Support The Strategic Direction of Exploration & Production we need to Strengthen
and Enhance the Companies Core Management Information.”
PDO Systems MAP
showing EMA Interfaces APP
DIMS
EPDORIS EPROMS CESPAR
Project
Access
Hisprod
Builder
Data
Permit
To Work
Bases
BCAR SABRI
RegeoNT TiQas
FTR
PS6/7 SPIR HOUSING
Flowlines
EZ Budget
Well EWMS
Dollar
Sketch
Scheduled
Require'ts Estate
Services
Purchase SAction ChargeOut
Enquiry List
IAP PAN
Account OPFS
Recon
PACER EPCRIS
EPMARS (GL:M) EPCON
Corrosion EMA
Transport
Tel
Charges
Billing
Trust2
DODGE
(Land)
Project (EPCOMS)
Extracts
CABCARS CRAMS &
Drill
Down
AP:M Trust1
Duplicates (Air)
CERES
Low
Stock
LNG Warning Fixed
Cash
Assets
Call
AP:M
Duty
Eng. Tag Drawback
Cash
Number Supplier Payroll
Forecast
System Master
EMS Data
Payments
Timesheet Charges
SaPhire EPFAU Recording
System
Data
Warehouse
Engineer WEB
Estimation
System
To Achieve Measurable Quality and Efficiency Gains we will have to rethink our Business
Processes, Organizational Design, Jobs & Roles, Corporate Policies and Culture.
September 17-20, 2006 ● The Fairmont Dallas ● Dallas, Texas ● simposium.simnet.org

6. Process Automation is linked to the six main key drivers of
business process improvement within PDO
Financial Process Visibility
Transparency (end to end)
Automation Process
CMFI
(Time Liberation) Simplification
Competent
Workforce Standardisation
Six Main Elements of CMFI identified as Key Drivers
September 17-20, 2006 ● The Fairmont Dallas ● Dallas, Texas ● simposium.simnet.org

7. End to End Process in PDO
Integrated Supply Chain Management
Work Purch.
MRP RFQ PO Receipt Issue Invoice Pay
Order Req
Single Integrated end to end process for goods and services
SAP R/3 for Transactional
Processing.
SAP Business Warehouse
as reporting Toolkit
IX2 Digital Processing of
all Documents throughout
the Supply Chain
September 17-20, 2006 ● The Fairmont Dallas ● Dallas, Texas ● simposium.simnet.org

8. September 17-20, 2006 ● The Fairmont Dallas ● Dallas, Texas ● simposium.simnet.org

9. September 17-20, 2006 ● The Fairmont Dallas ● Dallas, Texas ● simposium.simnet.org

10. September 17-20, 2006 ● The Fairmont Dallas ● Dallas, Texas ● simposium.simnet.org

11. Two Extremes !
PDO Systems MAP
showing EMA Interfaces APP
DIMS
EPDORIS EPROMS CESPAR
Project
Access
Hisprod
Builder
Data
Permit
To Work
Bases
BCAR SABRI
RegeoNT TiQas
FTR
PS6/7 SPIR HOUSING
Flowlines
EZ Budget
Well EWMS
Dollar
Sketch
Scheduled
Estate
+
Require'ts
Services
Purchase SAction ChargeOut
Enquiry List
IAP PAN
Account OPFS
Recon
PACER EPCRIS
EPMARS (GL:M) EPCON
Corrosion EMA
Transport
Tel
Charges
Billing
Trust2
DODGE
(Land)
Project (EPCOMS)
Extracts
CABCARS CRAMS &
Drill
Down
AP:M Trust1
Duplicates (Air)
CERES
Low
Stock
LNG Warning Fixed
Cash
Assets
Call
AP:M
Duty
Eng. Tag Drawback
Cash
Number Supplier Payroll
Forecast
System Master
EMS Data
Payments
Timesheet Charges
SaPhire EPFAU Recording
System
Data
Warehouse
Engineer WEB
Estimation
System
• Traditional
Purchase Order • PurchaseOrder (Goods or
(Goods only) US$ 103 Services) Cost Reduced to
US$ 18
• Traditional Request for
Quotation US$ 103 x 3 vendors • Request for Quotation Cost
= US$309 Reduced to US$ 18 x 3
vendors = US$54
September 17-20, 2006 ● The Fairmont Dallas ● Dallas, Texas ● simposium.simnet.org

12. Two Extremes !
PDO Systems MAP
showing EMA Interfaces APP
DIMS
EPDORIS EPROMS CESPAR
Project
Access
Hisprod
Builder
Data
Permit
To Work
Bases
BCAR SABRI
RegeoNT TiQas
FTR
PS6/7 SPIR HOUSING
Flowlines
+
EZ Budget
Well EWMS
Dollar
Sketch
Scheduled
Require'ts Estate
Services
Purchase SAction ChargeOut
Enquiry List
IAP PAN
Account OPFS
Recon
PACER EPCRIS
EPMARS (GL:M) EPCON
Corrosion EMA
Transport
Tel
Charges
Billing
Trust2
DODGE
(Land)
Project (EPCOMS)
Extracts
CABCARS CRAMS &
Drill
Down
AP:M Trust1
Duplicates (Air)
CERES
Low
Stock
LNG Warning Fixed
Cash
Assets
Call
AP:M
Duty
Eng. Tag Drawback
Cash
Number Supplier Payroll
Forecast
System Master
EMS Data
Payments
Timesheet Charges
SaPhire EPFAU Recording
System
Data
Warehouse
Engineer WEB
Estimation
System
• InvoicesProcessing done • EIPP implemented via IX2
Manually 6000 x 12 x US$34* = Reducing cost of Invoice
US$ 2,448,000.00 Processing to US$12.50 per
invoice (6000 x 12 x US$
12.50* = US$ 900,000.00)
* Aberdeen Group, Invoice Reconciliation & Payment
Benchmark Report, June 2004
September 17-20, 2006 ● The Fairmont Dallas ● Dallas, Texas ● simposium.simnet.org

13. Two Extremes !
PDO Systems MAP
showing EMA Interfaces APP
DIMS
EPDORIS EPROMS CESPAR
Project
Access
Hisprod
Builder
Data
Permit
To Work
Bases
BCAR SABRI
RegeoNT TiQas
FTR
PS6/7 SPIR HOUSING
Flowlines
EZ Budget
Well EWMS
Dollar
Sketch
Scheduled
Require'ts Estate
Services
Purchase SAction ChargeOut
Enquiry List
IAP
+
PAN
Account OPFS
Recon
PACER EPCRIS
EPMARS (GL:M) EPCON
Corrosion EMA
Transport
Tel
Charges
Billing
Trust2
DODGE
(Land)
Project (EPCOMS)
Extracts
CABCARS CRAMS &
Drill
Down
AP:M Trust1
Duplicates (Air)
CERES
Low
Stock
LNG Warning Fixed
Cash
Assets
Call
AP:M
Duty
Eng. Tag Drawback
Cash
Number Supplier Payroll
Forecast
System Master
EMS Data
Payments
Timesheet Charges
SaPhire EPFAU Recording
System
Data
Warehouse
Engineer WEB
Estimation
System
• Output by Printed Medium • Output by Printed Medium
US$3 per Document Removed Completely
• Output by Fax per Document • Output by Fax Removed
Omani Riyals 1.025 (US$ 2.67) Completely
• Output by Email per Document • Output by Email Removed
Omani Riyals 0.625 Baisa (US$ Completely
1.63)
• Output of all Documents
to one or many Vendors
Electronically (large or
** Includes Outsourced Vendor Management small) via IX2 @ 0.550
Baisa** (US$ 1.43)
September 17-20, 2006 ● The Fairmont Dallas ● Dallas, Texas ● simposium.simnet.org

14. Achieved Business Benefits from Process Automation !
• Paying for the right things, at the right cost, to the right people in the
right time.
• Level and fair playing field for all to do business
• Information available to make informed planning decisions
• Removal of Manual expediting effort from buyers desktop
• 50% – 60% Reduction in Invoice Processing Cost via EIPP
• Improved discounts for early payments
• Spend Visibility
• Empowerment of other processes
• Vendor Performance Data
• Complete removal of maverick procurement
• Controls enabled to reduce procurement fraud
• Full end to end transparency
September 17-20, 2006 ● The Fairmont Dallas ● Dallas, Texas ● simposium.simnet.org

15. September 17-20, 2006 ● The Fairmont Dallas ● Dallas, Texas ● simposium.simnet.org

16. September 17-20, 2006 ● The Fairmont Dallas ● Dallas, Texas ● simposium.simnet.org

17. September 17-20, 2006 ● The Fairmont Dallas ● Dallas, Texas ● simposium.simnet.org

18. The most “E” enabled company with the Shell Highly Automated Requisition 2 Pay
Group: Process:
• All SCM documents output • Request For Quotation,
Digitally Purchase Order and
• Reverse Auctions via Freemarkets Service Entry processed
Ariba via Digital Exchange (IX2)
• Tenders via POT • All Quotations Via Digital
• EIPP (Electronic Invoice Exchange
Presentation & Process)
• 2500 Vendors Connect to
• Cost of Processing reducing
IX2
• Payment Performance 98% ontime
• Invoices Processed from
• Integrated Logistics Process (I2)
SE and GR Data Via IX2
• High E H & S impact (less vendors
on roads delivering sealed Bids) • 500 Contracts and 169
• e-Centre key to Vendor Price agreements
Enablement Automated
• Low Cost entry into the e- • Payment Advise
Commerce world for trading Automated
community (sustainable • Expediting Automated
development project for Oman)
• Messaging Model “Only Sender
Pays”, No Bid No Pay
• No impact on Back office
environment (SAP)
September 17-20, 2006 ● The Fairmont Dallas ● Dallas, Texas ● simposium.simnet.org

19. Key Learnings
• Challenge common assumptions about the competitive bidding model.
• Share the benefits, particularly with vendors.
• Customization may be an option, especially when requirements are not demanding.
• When public infrastructure is not effective, focus on service and substitute one
technology with another.
• The Identification of the critical feature that makes or breaks the system is key to
success.
• The collaboration between the big buyer and the independent e-procurement
solution provider is important for the long term sustainability of the e-procurement
exchange.
September 17-20, 2006 ● The Fairmont Dallas ● Dallas, Texas ● simposium.simnet.org

20. Introducing Sohar Aluminium a new Business Development in Oman
Sohar Aluminium Company is undertaking a
landmark US$2.4 billion Greenfield Aluminium
Smelter project in the Sultanate of Oman. This
project, which will contribute significantly to the
GDP of Oman, will be developed in Sohar.
The company, as a first phase development, will
build a single AP35 potline, together with
associated carbon and casting facilities and an
1000 MW gas fired power station.
SAP ERP 2004 is being implemented within the
Company and will be utilizing e-procurement
enabling technologies to reduce it’s overall
operating costs within the Supply Chain.
For more information go to www.sohar-
aluminium.com
September 17-20, 2006 ● The Fairmont Dallas ● Dallas, Texas ● simposium.simnet.org

21. Thank you for your attention
Just time for any questions
and answers
September 17-20, 2006 ● The Fairmont Dallas ● Dallas, Texas ● simposium.simnet.org