effective management of the supply...

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Effective Management of the Supply Chain

How CIPS can support people and process development.

Phil Broughton Corporate Relationships – Energy and Oil & Gas sectors Tel: +44 (0)1780 761 475 Mob: +44 (0)7557 263 991 Email: [email protected]

Thursday 28th November 2013

Sajid Ghani Managing Director Analytics Tel: +44 (0)1245 468 868 Mob: +44 (0)7747 442 760 Email: [email protected]


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CIPS: Supporting SC Management in Aberdeen

CERTIFICATION STANDARD

Process - Compliance - Capability

Sustainable Procurement Review

• CIPS Sustainability Index

Oil & Gas Corporate Award programme Qualifications Membership / Branch events Master Awards

CERTIFICATION ADVANCED STANDARD

Strategic Alignment and Performance

Capability Gap

Analysis

Performance

Process People


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CIPS’ Oil & Gas Corporate Award programme

Success, success, success…

So far : over 35 companies ; over 90 individuals…

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Performance

CIPS Sustainability Index

Confidential – Not for re-distribution without permission of PRGX UK Ltd

Source: Report of the World Commission on Environment and Development: Our Common

Future/Brundtland Commission Report

• development that meets the needs of the present,

• without compromising the ability of future generations to meet their needs

Sustainable development is …

http://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=TF1fJd9XsK59gM&tbnid=MLCwlzY1W3bsZM:&ved=0CAUQjRw&url=http://www1.uwe.ac.uk/aboutus/departmentsandservices/professionalservices/marketingandcommunications/resources.aspx&ei=Q34JUZfhJo-o9gSv3oHwCw&bvm=bv.41642243,d.eWU&psig=AFQjCNGd0dDfkq8dyzgtOmoAD9tR09drjQ&ust=1359663040127810


… and usually very beneficial

• 2012 – Harvard Business School & LSE, over 18 years and 180 corporations:

– High performance in sustainability out-performs by 15-30% average both in financial and stock performance

• 2011 – PwC & INSEAD study

– Adverse impact of 12% share value per major shock. Adverse direct costs of 0.7%. Payback on investments = x 85


Confidential – Not for re-distribution without permission of PRGX UK Ltd 7

Procurement is uniquely positioned to influence sustainability

• Drive “triple bottom line”: – Save money – Reduce operating risk – Protect reputation

• Implementing relatively simple procurement strategies can drive positive behaviours within the supplier base

• Internal business leadership



Step 1: We researched the lay of the land (over 3 years)

Supported by the University of West England, we assessed 200+ papers & organisations. We found basic inefficiencies:

A diverse understanding of what is meant by sustainability

Suppliers spend considerable effort responding to the same questions from multiple buyers

Buyers struggle to evaluate responses and to obtain meaningful risk coverage



Step 2 - We took a collaborative approach

http://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=TF1fJd9XsK59gM&tbnid=MLCwlzY1W3bsZM:&ved=0CAUQjRw&url=http://www1.uwe.ac.uk/aboutus/departmentsandservices/professionalservices/marketingandcommunications/resources.aspx&ei=Q34JUZfhJo-o9gSv3oHwCw&bvm=bv.41642243,d.eWU&psig=AFQjCNGd0dDfkq8dyzgtOmoAD9tR09drjQ&ust=1359663040127810http://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=mX5di6M3Gwt9yM&tbnid=d0QPdrnj2TkZ6M:&ved=0CAUQjRw&url=http://www.seeklogo.com/heathrow-airport-logo-65946.html&ei=Sn0JUea5Go_-8ASb8IDoAg&bvm=bv.41642243,d.eWU&psig=AFQjCNHMQEeSi1sGTVd-tU7EhKzp3tEcjA&ust=1359662789810265http://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=x8lqa5vPcxREeM&tbnid=sIVbYuWgtpu53M:&ved=0CAUQjRw&url=http://www.postonline.co.uk/post/news/2235038/policyholders-overlook-legal-expenses-insurance&ei=in0JUfLFKYGE9QSd14DYAg&bvm=bv.41642243,d.eWU&psig=AFQjCNEbq5M2_WYHjAkMA7Qyf-RF7U07fw&ust=1359662855123086


Step 3: We defined scope to address key risks

Sustainable Procurement =

Better Supplier Risk Management

Economic Risk Are my suppliers financially viable and well governed?

Environmental Risk How responsible and efficient are my suppliers?

Social & Ethical

Risk Will my brand be harmed from my suppliers’ actions?

Proprietary information. No re-distribution without permission of PRGX UK Ltd.



= time and cost savings + true benchmark data

Step 4: We wanted to address market in-efficiencies, x-sector

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• Maintain Questionnaires • Effort to evaluate responses • Lack of expertise & time

•Multiple questionnaires •Variations on the same theme •Lack of consistency in scoring

Buyer CIPS

Single Point of Accreditation

+ Backed by Institutes

Buyer

Buyer

Supplier

Supplier

Supplier

Current

Envisaged



Outcomes


Confidential – Not for re-distribution without permission of PRGX UK Ltd 13

CIPS Sustainability Index Launched UK & Ireland, 2013



Designed to address common data gaps, x-sectors

Top

1-5%

Key 5-20% vendors

Next 20-40% of vendors

One-time &/or low value vendors Supplier profiling not important

Supplier profiling preferred at minimal cost

Buyers do simple checks of dubious value

Supplier profiling is increasingly vital

Buyers perform own checks, no standard approach

Supplier profiling critical

Buyers’ in-house team profile and validate suppliers

Specialist 3rd party support, but can be expensive



Commercial approach

• Low cost and tiered fee structure, established through on-line profiling

• SME proposition developed

• Renew every 6 or 12 months

• Fee provides: rating, accreditation, customised report, peer group benchmarks, document repository and community

Commercial proposition for Supplier

• Zero/minimal fee approach

• Additional service to assist supplier on-boarding

• Provides: supplier ratings, peer group benchmarks, supplier search, document repository and community

Commercial proposition for Buyers



Australasia launch

• CSI team visited Melbourne in October

• We are planning launch in summer, 2014

• Market indication is positive, with potential mentors already being planned

• Initial wave of interest from over 35 organisations



The future: more connectedness

• Manage risk, more efficiently

• Connect suppliers throughout the chain

• Provide global coverage

• North America launch Q2 2014

• More collaboration



CIPS – committed to the continued support of the Aberdeen Oil & Gas industry

Launch of the Oil & Gas Corporate Award programme in Norway

A fast-growing Oil & Gas

Corporate Award programme in Aberdeen

Corporate Certification - maximise the performance of the PSCM function

Senior level Master Classes – Complex Capital Projects / Risk and Resilience in the Supply Chain

Specialist Skills support new for 2014 - Legal / Fraud

Less complex and sustainable supply chains - CIPS Sustainability Index


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Thank you, and any questions ?

Effective Management of the Supply Chain

How CIPS can support people and process development.

Phil Broughton Corporate Relationships – Energy and Oil & Gas sectors Tel: +44 (0)1780 761 475 Mob: +44 (0)7557 263 991 Email: [email protected]

Sajid Ghani Managing Director Analytics Tel: +44 (0)1245 468 868 Mob: +44 (0)7747 442 760 Email: [email protected] Thursday 28th November 2013

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