ADNOC Cohort 15 Practitioner Driving value through Procurement and Supply CIPS PDV

1.0 Introduction. 4

1.1 Background of the ADNOC Refining. 4

1.2 Procurement Division in ADNOC Background. 4

1.3 Scope of Assessment 5

2.0 ADNOC Stakeholders Analysis 5

3.1 Relevance of Stakeholders in the Identified Area of Spend. 7

3.2 Stakeholders Impact on Procurement from ADNOC Context 8

4.0 Research and Market Analysis 9

4.1 Procurement of Nanotechnology fitted Pipes Analysis 9

5.0 Market Analysis 10

5.1 Market Overview. 10

5.2 Market Positioning. 11

5.2 Applicable Variables in Nanotechnology Fitted Pipes Procurement 11

5.3  Marketing Mix 11

5.4 Industrial Competitiveness 12

6.0 Current Strategies and Approaches 13

7.0 Best Approaches. 14

8.0 Nanotechnology fitted Pipes Market Analysis Techniques 15

8.1  PESTLE Analysis. 15

8.2 Kraljic Analysis 16

8.3 SWOT Analysis 17

8.4 Porter’s 5 Forces Analysis 18

9.0 Conclusion and Recommendations 19

9.1 Conclusions 19

9.2 Recommendations 19

Appendices 23

Appendix 1: Workflow of procurement in the ADNOC. 23

Appendix 2: Supplier group registration form.. 24

Appendix 3: ADNOC Organisational Structure. 26

Appendix 4: Organisation Structure in ADNOC. 27

Executive Summary

In this first assessment, it analyses and evaluates the Abu Dhabi Company (ADNOC) procurement strategies to gain value for money and quality. To achieve this, the selected area of spend is modern pipes with nanotechnology as an added advantage. As a senior procurement specialist in ADNOC Gas processing, the author is interested in overseeing the procurement of this area of spend. Also, by being involved in the departments of contracting, purchase, commercial directory, strategic sourcing, and the operations of the entire procurement department, the relevant information is obtained. Through engagement on different stakeholders, they have been identified to play a critical role in ensuring an improved procurement process.

In the analysis, this report has followed a detailed analysis of data in the category of spend, marketing analysis, and market positioning. Different tools have been applied in this analysis, which includes the PESTEL, Kraljic, SWOT, Porters 5 forces, and Ansoff Matrix analysis. Based on the obtained findings of this study, it is evident that the ADNOC refining company sourcing of the nanotechnology pipes, it is yet to gain a lot of popularity in terms of a limited number of suppliers interested.

From the report findings, several recommendations are suggested which are the desire for improvement of the value addition by improving their positioning. Also, they must strengthen their relationship with the existing stakeholders. Also, they must integrate into their policies the need for active resource management since the pipes fitted with nanotechnology require value for money as opposed to the standard pipes.  This has been identified in this report as the need to integrate an appropriate procurement planning.

1.0 Introduction

1.1 Background of the ADNOC Gas Processing

ADNOC gas processing has existed for more than 46 years, where it is actively involved in Abu Dhabi’s development economically as a leading oil producer locally and globally (ADNOC, 2020). ADNOC leverages modern innovativeness to maximise the value of their resources. Through this and ensuring they receive the value for money in their engagement with different stakeholders, they ensure they are appropriately positioned in their market. This is meeting the consistent changing demands of their energy market, which positively impacts their economy and future operations.

1.2 Procurement Division in ADNOC Background

ADNOC Gas processing organisation operates an independent procurement division tasked with the function to harness competitiveness and sustainability of their supply chain by engaging different stakeholders. As a strategy of embracing technology and to have a value for their money, ADNOC operates a technology-based registration system that is prompt (see appendix 2). It is a requirement for all organisation suppliers to  fill unrepeated login to the ADNOC commercial recording where they qualify to do business in all sectors of gas processing (see appendix 1). Through this, the organisation has managed to put in place procurement strategies collaboratively among all the departments since they present their procurement needs independently for successful tending and bidding strategies. Further, procurement division operations and supply division are implemented strictly through adhering to terms, conditions and legislations. These include pricing, risk management, and strict adherence to the organisation supply timelines.

There are different characteristics of the ADNOC gas processing procurement department that makes it to be unique (see summary in figure 1).

Figure 1: Features of the ADNOC procurement Division activities

1.3 Scope of Assessment

Since ADNOC has a broad range of procurement and supply in its onshore and offshore operations, this report is narrowed to focus on pipes fitted with nanotechnology as the category of spend. Through the use of the pipes as a spend area, this report analyse and evaluates the scope in which the ADNOC stakeholders implement sustainable procurement practices. This is by assessing how their operations lead to cost-saving and value addition in their operations. Additionally, the availability of the suppliers, the need for the embrace of technology in the procurement process, services provision to their customers, and the best approaches in gaining value for invested resources with an evaluation provided.

2.0 ADNOC Gas Processing Stakeholders Analysis

In CIPS, the stakeholders are identified as a group of individuals, eliciting a direct influence on the strategies, goals, and organisation policies (CIPS, 2017). In a general context, stakeholders can include creditors, directors, employees, governments, stakeholders, and customers. Stakeholders are nevertheless varying from one organisation to the other and significantly influenced by their operations in their market. They are nonetheless categorised to;

  • Internal
  • Connected
  • External stakeholders (CIPS, 2010)

Taking into account of ADNOC Gas Processing company, their internal stakeholders can be grouped into partners, staff and the administration which include the PS&M department, contracting, sourcing and even the IT tasked with commercial directory. The internal stakeholders also include their different subsidiaries (ADCO, ADMA-OPCO, ZADOC, Al Yasat, Al Dhafra, and NDC).

 The external stakeholders are the communities, legislation institutions, NGOs (such as environmental groups) and organisations they are competing. The competitors include Shell, Total, BP, JODCO, and Exxon-Mobil.

 For the connected stakeholders, on the other hand, involve the government institutions owing to the 80% of UAE government ownership of ADNOC, customers, and supplies.

Figure 2: Categories of ADNOC Stakeholders

Further, by using a stakeholder’s management matrix CIPD (2019), it is possible to analyse the positioning of the identified stakeholders (see figure 3);

Text Box: Low Interest
Text Box: Low Influence
Text Box: High Interest
Text Box: High Influence

Figure 3: ADNOC Gas processing stakeholders analysis matrix

Keep Satisfied:

This group that need to be satisfied include the suppliers, the regulators and government. They have a major influence on the organisation value for money and quality received from the procurement process.

Key Players:

Partners and staff are supposed to be aware of any potential change process, being updated with any form of medication demanded and awareness of their relevance.

Keep informed:

This group include the management, different directs and society who play a critical role in the procurement plan status, any issues or challenges, and further requirements, occurring of unplanned activities as well as any risks, might be in place.  

Minimal Efforts:

Shareholders and competitors are supposed to operate through an active monitoring in regard to the available plans. Through the plans monitoring process, any likely risk is mitigated.

3.1 Relevance of Stakeholders in the Identified Area of Spend

In the ADNOC procurement division, there are always contracts……….

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