Question
Practitioner Corporate Award Assessment Code: PDV
Question: This assessment tests the learning outcomes and module content of:
Module: Driving Value through Procurement and Supply
Module: Managing Expenditures with Suppliers
Task
Identify a product, service or category of spend and outline its importance and impact to your organisation’s stakeholders. Prepare a brief market analysis and demonstrate how your procurement function will produce value for money outcomes. Your final submission should also review the current approaches to managing prices and costs for the product, service or category you have identified, as well as highlighting the impact of markets to secure cost savings for your organisation.
Answer/Solution:
1.0 Introduction
1.1 Introduction to Abu Dhabi National Oil Company (ADNOC)
Established in 1971, today ADNOC is a top international energy producer located in the emirate of Abu Dhabi in the United Arab Emirates (UAE). In its early days, the company was an explorer for and provider of oil and gas. Now ADNOC consists of a wide variety of businesses which include many aspects of the petrochemical supply chain. Some of its ventures include: exploration, production, storage, refining and distributing in the hydrocarbon arena. With increased competition from all over the globe, this conglomerate seeks to establish policies and procedures which will leverage the utmost value from its country’s finite energy assets (ADNOC, 2017).
1.2 Procurement Division of ADNOC
ADNOC is committed to developing and maintaining a competitive and sustainable supply chain for all their partners and service providers. The company operations are effective and characterized by online and real-time registration system for all potential suppliers, consistent tracking of pre-qualification statuses online, and tender invitation. It is a requirement for all the suppliers to complete a one-time registration on the ADNOC commercial directory for doing business with any of the ADNOC group companies (see Appendix 1). These strategies offer an ideal opportunity for the ADNOC for collaborative, web-based tools for procurement department and suppliers in implementing tendering and bidding activities online. However, all the procurement strategies are implemented with strict adherence to rules and standards such as pricing, risks and timelines set by the organisation.
1.3 Scope of the Report
The scope of this report has been narrowed from a general perspective of administrative operations in ADNOC to specifically procurement of IT equipment (hardware only) from different suppliers in the UAE. In this case, the IT equipment represents the category of spend. From this angle, this study delves deeper into the evaluation of the impact of ADNOC stakeholders as they relate to this operation. This has been attained through a focus on the provided course content techniques and processes that are relevant to the procurement and supply in different areas of spend. Part of the analysis would also be an evaluation of strategies set in place by ADNOC for price management and value addition. This would be inclusive of an analysis of the proximity of the suppliers, level of modernization required, customers to be served and best practices to harness value for money.
2.0 Stakeholder Analysis for ADNOC
As noted by Manetti’s 2011 study, the stakeholders represent the groups with a direct influence on or who get influence from organisation actions, objectives and policies. From a general point of view, the stakeholders in any particular organisation include the creditors, directors, employees, government, owners, suppliers, unions and communities. As such, the stakeholders vary and are dependent on the company and their industry of operation. Nevertheless, they can be categorised into internal stakeholders, connected stakeholders, and external stakeholders (CIPS Module 1, 2018). Taking into account the ADNOC operations, the internal stakeholders include the partners involved in the onshore and offshore processing, employees, and management (e.g. procurement specifically: purchasing department manager, contracts department manager, strategic sourcing management and commercial directory department managers.) Also among these would be ADNOC’s subsidiaries such as ADCO, ADMA-OPCO, ZADCO, Al Yasat, Al Dhafra and NDC. The external stakeholders include the community, regulatory agencies, non-governmental bodies (e.g. environmental groups) and competitors, such as global energy companies Shell, Total, BP, JODCO and Exxon-Mobil. Lastly, the connected stakeholders include the government (as most of ADNOC is owned by the UAE government), customers, suppliers, and the shareholders.
Figure 1: ADNOC Stakeholders
3.0 The Relevance of the Area of Spend to Stakeholders
ADNOC always signs a contract (through the procurement division) in order to source different IT equipment and products. IT equipment procurement can be done on behalf of many departments such as: engineering, sales, logistics and offshore facilities. IT equipment guides the management of ADNOC in the exploration process, drilling and maintenance of wells and it is essential in the extraction of crude oil from reservoirs. IT equipment is also vital for construction, operations and maintenance of all the involved production facilities, conversion, processing, measurement, storage, transfer and delivery of crude oil from the production wells to delivery points and exporting the crude oil. In general, it could be said that computer hardware performs a crucial role in every aspect of ADNOC’s many businesses and partnerships.
4.0 The Impact on Procurement from ADNOC’s Perspective
In ADNOC, there is a full-fledged Information Technology (IT)………………………………………………………………………………………………………………………………………………………..Please contact our team to receive guidance and support on this assessment in full based on your company of work and level of expectations
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