(Solution) CIPS Category & Category Management in Procurement and Supply (PS&M)- APGM Occidental of Oman (Oxy)
Executive Summary
This is a business report which evaluate category and contract management using Occidental of Oman (Oxy) organisation in Oman. Specifically, the best practice in category management for harnessing project management and cost management effectiveness has been evaluated. Further, in this business report, entire requirements which guide initiation and readiness in category management, conventional-based sourcing strategies, contract management, techniques have been put into account. In this report, the findings evidence that Oxy organisation operates an effective risk management strategy in contract and category management. Further, to identify the PS&M members capacity development, they are well positioned in implementing their category management. This is with appropriate capacity development required for mitigating existing gaps in their practice. The findings similarly evidence Oxy PS&M as having been successful in sourcing the Health and Safety Equipment (HS&E). To enhance innovativeness in this area, the organisation capitalise on SLA’s and KPIs with auditing being essential for their practice. Further, through an effective use of data analytics, analysis and presenting contract management data and best management process. This enhance stakeholders collaboration and being aware of decision making promoting operations, input and suggestions made. Through stakeholders analysis, stakeholders relations are essential for maintaining stakeholder relations improving the Oxy image and overall market share.
In this report, there are identified gaps which need to be mitigated. These gaps would be managed by use of the following recommendations which are;
- Investing in blockchain technologies, cloud-based platform and L&D strategy for contract management strategy to improve entire stakeholders relationship
- Increasing budget assigned in their PS&M post-COVID pandemic economic recession
- Initiate an organisation team members to improve how they integrate and harmonise PS&M approach in the organisation
- Prioritising on increasing team-based working in their sourcing with entire vendors involved for achieving cost saving
- Engagement of various organisations to improve on skills, competency and acquiring relevant talents
- Approving budget intended to implement risk analysis for various potential risks faced
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Description
Solution
Table of Contents
1.1 Key Terms (Title), aims and objectives. 4
3.0 Business Project Background. 6
3.1 Oxy Organisation Introduction. 6
2.2 Importance of this Business Report for Oxy Organisation. 7
3.0 Requirements to initiate and prepare introduction of category management process. 9
4.0 Strategic and conventional sourcing processes and role in category management. 12
4.1 Situation, Target and Proposal (STP) 13
5.0 Tools and Technique to Map Categories of Direct and Indirect Expenditure. 15
5.2 Comparing and Contrasting different Tools and Techniques. 17
5.2.1 Situational Analysis. 18
5.2.2 Comparison and Contrasting STEEPLE and Kraljic Analysis Tools. 20
6.0 Innovative Measures for Improving Supply Chain. 20
6.1 Complexities and Volatilities Management. 20
6.2 Dynamic Supply Networks. 21
6.3 Disruptive Influence Supply Chains. 22
6.4 Automation Implementation. 23
7.0 Contract Admin and Management. 23
8.0 Risk and Implementation of Risk Management Techniques in Contracts (Category Management) 24
Figure 1:Oxy Organisation and Contract Management Steps. 6
Figure 2:Occidental of Oman Business Portfolio. 8
Figure 3:Different Change Factors. 9
Figure 4:Extent and nature of change model 9
Figure 5:Extent and nature of change model 10
Figure 6:Category Management Cycle. 13
Figure 7:Oxy Organisation summary of indirect expenditures. 17
Figure 8:Summary of Situational Analysis in Oxy Organisation. 20
Figure 9:Summary of comparison of contract admin and management 25
Figure 10:Different risks in contracts and mitigation strategies. 26
Table 1:Summary of Oxy PESTLE Tool 10
Table 2:Oxy organisation direct and indirect expenditures summary. 18
Table 3:Summary of the STEEPLED Analysis. 18
1.0 Introduction
1.1 Occidental of Oman (OXY) Organisation Background
Occidental of Oman (Oxy) is an oil and gas sector organisation in Oman. In the past years, according to Oxy (2022), the organisation has been involved in development of multiple assets, infrastructural development, expertise and technology to fuel their progress and lives quality improvement internationally. For over 100 years, the organisation has been developing extensive projects. All the projects are informed by need of ensuring that the organisation solve the most pressing global environmental challenges. By actively working in their business environment, organisations take part in production and important products for sustainability and improvement of the quality of life globally. Also, the organisation ensure they explore oil and gas wells in Oman and internationally. In figure 2, the different areas of the organisation operations is summarised;
Figure 1:Occidental of Oman Business Portfolio
Source: Oxy (2023)
By embracing Oxy global strategic supply chain, they are appropriately positioned to achieve all goals. Therefore, due to their position, global strategic supply chain is important to be evaluated and generate relevant findings for this report. These areas are importance since the organisation has been operating globally in United States (USA), Middle East, Africa and Latin America (Oxy, 2022). Being a leader in the energy sector, the organisation assume a holistic role of leading to the manner in which vigorous pursuing of viable, future-looking carbon management internationally.
1.2 Key Terms (Title), aims and objectives
The contract and category management is important for improving Procurement and Supply Management (PS&M) strategy. This is at the same time enhancing cost management in their practices. For Oxy case, part of implementation of corporate strategy is succeed in strengthening product offerings, increasing innovation, meeting entire customers’ needs promptly and partnering to leverage on existing opportunity (Oxy, 2023). Taking into account of oil and gas industry where Oxy organisation is based, being a monopolistic competitive market, the target is improving profitability while at the same time market dominance. Hence, contract management as a significant strategy for Oxy admin and management teams, this is the best practice in their operations. Today, Oxy implement Global Procurement Contracts for improving sourcing contracts, consistency in setting standards, appropriate guideline and policy development. The identified modernised strategy is not part of their entire spend areas. Therefore, in order to achieve their operations, category managers are actively involved in reviewing contracts, negotiation both commerce and legally and eventually signing off these document. From this, Oxy legal department receives an approval. Hence, through contract management adoption, this can contribute to Oxy ability to achieve competitive advantage and oil and gas in Oman venture. At the same time, a guarantee on management of contract delays, inappropriate negotiations, non-compliant and inefficiencies in getting approvals and signing their workflow. These activities are pursued in different stages;
Figure 1:Oxy Organisation and Contract Management Steps
Source: CIPS Notes
For Oxy organisation, operating different spend categories in every departments, using Procurement Contracts contribute to a successful implementation of contracts of good/required standardisation, guideline-set and policies. This is essential for success in review of contracts and negotiations for different spend categories by use of contract management, SLAs and master their plan. By using the different steps in contract management, at closing the contract, auditing is recommended for evaluating all roles, communication strategy and notifying supply chain players and requesting.
1.2 Purpose of the Project
As identified previously, this report intend to evaluate category and contract management in Oxy organisation. To achieve the intended aim, the scope of this project would include;
In overall, by successfully achieving the expectations of this report, delay in projects implemented and costs incurred in the process. Through a focus on the identified project scope, different contract management characteristics for Oxy and relations with players in their external business environment and suppliers relations prioritised. The most appropriate strategy in contract management therefore would be considered with best recommendations offered. This include risk-based contract and category management, relevant tools and supporting contract management and suppliers teams inclusion. Being the most appropriate strategy, contract management could be successfully attained.
3.0 Requirements to initiate and prepare introduction of category management process
The importance of introducing category management strategy for Oxy is guided by view that various spend categories are procured different, varying times and conditions. To appreciate the demands for initiating and preparing implementation of category management strategy, it is important to prioritise on internal and external factors (Zhang & Dong, 2020).
Considering external factors, category and contract management are important for embracing modern technology as a strategy for change management implementation. By use of PESTLE Analysis Tool (CIPS, 2023), to identify macro-environment factors directly impacting how they promote and impact change strategy by Oxy Organisation.
Table 1:Summary of Oxy PESTLE Tool
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