Your work should consist of 5,000 words. The integrative assessment requires candidates to use their
knowledge gained from the previous four modules therefore, candidates will need to refer to the syllabus
coverage in the following modules:
• Driving value through procurement and supply
• Managing expenditures
• Developing contracts
• Sourcing essentials
• Negotiation in procurement and supply
Solution:
1.0 Introduction
This is a report analysis of the process through which the procurement function enhances product management right from its procurement, storage, and use respectively. For practical application purposes, this study focuses on SADARA Company. Sadara represents an exceptional alliance between two global pioneers in their corresponding industries Saudi Aramco and The Dow Chemical Company. Sadara Company is committed to contributing to the economic diversification and downstream development of Saudi Arabia. In the Jubail Industrial City of Saudi Arabia, the world’s largest manufacturing plants ever built in a single phase, SADARA, with 26 integrated world-scale, will produce more than three million tons of products every year(SADARA, 2017).
The petrochemical industry relies on the effective management of its supply chain system to enhance efficient operations such as avoiding operations breakdown and increasing operational costs unnecessarily. This informs on the relevancy of the existing commercial negotiation in the company. This is a process that includes goals communication by all involved stakeholders targeting in attaining a standard agreement and dealing with the issues and future conflicts management. This report will argue that a sourcing plan is fundamental as it ensures leveraging on the targeted spend in diverse locations with selected suppliers. This guarantee the establishment of knowledge and value in the customer-suppliers interface and relationship. To attain on the report focus, the creation and evaluation of the strategies sourced from this program will be instrumental in demonstrating on the best practice to inform on the formal commercial negotiation. The styles include collaborative, distributive, pragmatic and principled techniques of negotiation.
On its part, SADARA Company has a dedicated procurement function with critical divisions to address specific concerns as listed below:
Raw Materials (RM): The Raw Materials and Packaging Section is responsible for procuring the raw materials, chemicals, and packaging supplies required to make and package the finished products Sadara produces in its plants.
Maintenance, Repair, and Operations (MRO): The MRO (Maintenance, Repair and Operations) & Capital Section is responsible for procuring the equipment, materials and services required to keep Sadara’s manufacturing plants operational.
Service Contracting (SC): The Contract & Admin Services Section is responsible for procuring corporate-wide services that are leveraged across the company to support its business operations.
Center of Excellence (CoE): Key role in the development of the Procurement Operating Model as well as ensuring a continuous improvement agenda. The center formulates procurement strategy that is aligned with the proponent and overall Sadara strategy.
For this assignment, the
effectiveness of MRO procurement of valves products in SADARA Company will be examined. The valves are used to control the
flow of petrochemical products in the refining and production process. In this
case, through installing the right quality of valves
and in the proper manner ensures that the
petrochemical products flow in the desired direction, there are no excess
inflows, and that there are no unwanted fluids backflows in the process. The report is clustered
into sub-categories including a stakeholder’s analysis, product relevance to
the company, a market analysis, a procurement value generation analysis, price
management, and the cost savings processes applied respectively.
2.0 Valve Stakeholders Analysis
In the identification of the products’ stakeholders, the analysis describes stakeholders based on Beske, Land and Seuring (2014) definition. In this case, the authors described a product stakeholder as an individual or group of persons interested, having control over, or affected by a given product or service. This analysis categorizes stakeholders into the internal and external stakeholders respectively (Zhu, Sarkis & Lai, 2013).
The product Internal stakeholders are those within SADARA Company. They include the entire procurement department, the operations function, and the finance and administration functions that are directly involved in the purchase decision making process. In addition is a warehouse that stores and holds valve stocks to guarantee their quality retention and availability at times of need. The products external stakeholders are interested parties………………………..Please contact our team to receive this assessment in full based on your organisation of work
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