(Solution CIPS) The impact of supply chain management on corporate performance
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Description
Solution
5.0 Supply Chain Management on Corporate Performance
5.1 Performance of Supply Chain Affecting organisational Objectives
Organisational success is directly tied to the efficiency of the supply chain. The reasoning is that enhancing how products and services are delivered to customers leads to lower costs, better overall performance, and happier clients. Hanaysha and Alzoubi (2022) use the example of Land Rover, whose makers lost over £100 million due to environmental problems they could have prevented had they adopted a holistic supply chain. ADNOC’s supply chain shaped its early organisational priorities and the trajectory of its subsequent competition phases. Competitiveness is broken down into hypercompetitive and multilevel, each contributing to the model’s usefulness. Investment in an inefficient supply chain, then, does not result in a long-term competitive advantage. This is in the interest of achieving the company’s goals. According to CIPS (2020), this is crucial for optimising costs and managing inventory based on complete lead times. They guarantee adaptability and effective risk mitigation. As a result, ADNOC must shift from the absolute and independent design depicted in Figure 11 of their organisation’s aims and goals.
Figure 11:Organisation Goals and Supply Chain
The balanced scorecard tool (Rafiq et al., 2020) can be used to evaluate performance in monetary and non-monetary terms. The model’s components comprise finance, an inward focus on the business, the client, and learning and development.
Financial-In the case of ADNOC, this entails looking at revenue, total sales, spend areas, customers, and learning and development to gauge success.
Internal Business Perspective-In order to have efficient administration, knowing which items and services are the best is crucial. ADNOC will use this for gap management, performance delay, and waste reduction.
Customer Perspective-ADNOC places a premium on ensuring that its customers are happy with the company’s offerings regarding quality, price, and other relevant considerations. ADNOC solar panel consumers are encouraged to provide constant, specific responses regarding the quality of services received.
Learning and Growth Perspective-ADNOC give their staff a wide variety of chances to grow professionally. These learning and development opportunities help the organisation capitalize on a competitive edge.
6.0 Conclusion and Recommendations
6.1 Conclusions
It has provided an appraisal of a worldwide strategic approach to managing a company’s supply chain. The significance of this is based on the belief that a company’s supply chain affects the evolution of the market. This is in line with eco-friendly methods of sourcing from around the world. Supply chain management and the strategic logistical implications of an organisation. The Mendelow matrix, Porter’s 5 Forces analysis, and SWOT analysis are just some of the models employed for this aim. Supply chain assessments are created with the most suitable approach to ADNOC’s implementation, focused on the energy sector in the UK. All potential problems and dangers will be noted, along with any potential benefits.
6.1 Recommendations
- The results show that ADNOC has problems that hinder its teamwork. To guarantee that they are adopting sustainable operations in the supply chain, it is necessary to use collaborative strategy, networking, and innovation.
- ADNOC’s supplier chain and actively engaged end-users/stakeholders are not supported by a dedicated continuous development program. Consequently, the company has to boost supply-chain growth by expanding opportunities to employ various L&D tactics.
- ADNOC is already experiencing friction as it shifts from an antiquated supply chain to one that fully integrates electronic commerce. Conflicts arising in the supply chain must be managed so that all relevant parties can participate in process development and decision-making.
- The results have shown problems because their levels aren’t aligned. As a result, they must revamp their current supply chain to create an end-to-end supply chain for all of their requests. This is crucial to manage supply chain risks and performance level difficulties effectively.
References
Baxter, G. (2019). A strategic analysis of Cargolux Airlines International position in the global air cargo supply chain using Porter’s Five Forces Model. Infrastructures, 4(1), 6.
CIPS (2020). Cost optimization can ‘unleash innovation’. Available [Online]https://www.cips.org/supply-management/news/2020/june/cost-optimisation-can-unleash-innovation/ [Accessed on 14th June 2023]
CIPS (2021). The global standard for procurement and supply. Available [Online]https://www.cips.org/Documents/Global_Standard/2018%20update/CIPS%20Global_Standard_UPDATE_96pp_A4_1018_WEB.pdf [Accessed on 14th June 2023]
CIPS (2021a). What is supply chain management? Available Abdel-Basset [Online]https://www.cips.org/intelligence-hub/supply-chain-management [Accessed on 14th June 2023]
CIPS (2022). Supply chains of the future. Available [Online]https://www.cips.org/intelligence-hub/supply-chain-management/future-supply-chains [Accessed on 14th June 2023]
CIPS (2022a). How to achieve your goals on sustainable procurement. Available [Online]https://www.cips.org/supply-management/opinion/2022/august/how-to-achieve-your-goals-on-sustainable-procurement/ [Accessed on 14th June 2023]
CIPS (2022b). What is a supply chain. Available [Online]https://www.cips.org/intelligence-hub/supply-chain-management/what-is-a-supply-chain [Accessed on 14th June 2023]
CIPS (2022c). 5 steps to manage risk in procurement. Available [Online]https://www.cips.org/intelligence-hub/risk-management [Accessed on 14th June 2023]
CIPS (2022d). What will the next era of supply chain globalisation look like? Available [Online]https://www.cips.org/supply-management/analysis/2022/august/no-more-business-as-usual-/ [Accessed on 14th June 2023]
ADNOC (2022). About us. Available [Online]https://www.ADNOC.co.uk/ [Accessed on 14th June 2023]
El Khatib, M., Al Hammadi, A., Al Hamar, A., Oraby, K., & Abdulaziz, M. (2022). How Global Supply Chain Management Is Disrupting Local Supply Chain Management Case of Oil and Gas Industry in UAE. American Journal of Industrial and Business Management, 12(5), 1067-1078.
Hanaysha, J. R., & Alzoubi, H. M. (2022). The effect of digital supply chain on organizational performance: An empirical study in Malaysia manufacturing industry. Uncertain Supply Chain Management, 10(2), pp.495-510.
Huq, F., Pawar, K. S., & Subramanian, N. (2021). Disturbances to the supply chains of high-value manufacturing firms: comparison of the perceptions of product managers and supply chain managers. International Journal of Production Research, 59(13), pp.3916-3934.
Isabelle, D., Horak, K., McKinnon, S., & Palumbo, C. (2020). Is Porter’s Five Forces Framework Still Relevant? A study of the capital/labour intensity continuum via mining and IT industries. Technology Innovation Management Review, 10(6).
Leal Filho, W., Skouloudis, A., Brandli, L.L., Salvia, A.L., Avila, L.V. and Rayman-Bacchus, L., 2019. Sustainability and procurement practices in higher education institutions: Barriers and drivers. Journal of cleaner production, 231, pp.1267-1280.
Narullia, D., Putri, S. F., Purnamasari, F., Putri, D. M., Dewi, Y. R., & Cahayati, N. (2021). Sosialisasi Red Ocean Strategy Dan Blue Ocean Strategy Sebagai Upaya Meningkatkan Daya Saing Ukm
Perera, R. (2017). The PESTLE analysis. Nerdynaut.
Rafiq, M., Zhang, X., Yuan, J., Naz, S., & Maqbool, S. (2020). Impact of a balanced scorecard as a strategic management system tool to improve sustainable development: measuring the mediation of organizational performance through PLS-smart. Sustainability, 12(4), p.1365.
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- Within six months, PS&M personnel will be provided with chances for capacity building through partnerships with educational institutions to gain knowledge and skills for implementing category management.
- The PS&M would become more motivated in the long run by providing recognition and benefits for pursuing category management implementation.
- Within a year, an effective change management strategy would be pursued, focusing on tracking the change and spotting change resistance
1.0 Introduction
1.1 ADNOC Organisation Background
In this report, the organisation of focus is Abu Dhabi National Oil Company (ADNOC). This is for understanding the impact of contract terms and conditions on distribution of risk and power with their suppliers. This is an organisation which began its operation in 1971 and today is ranked as the leader in diversified energy group which is owned by Abu Dhabi Government (ADNOC, 2022). The organisation network of holistically integrated business has based their operations across the entire energy value chain assisting their capacity for meeting overall demands of the consistently changing energy markets. For remaining competitive, the organisation has allocated $15 billion for advancing and accelerating lower-carbon solutions, investment in new energy solutions and decarbonisation technologies for lowering their carbon intensity with 25% by 2030 and successfully facilitating their NetZero by 2050 target. The company has a network of fully operational companies that operate throughout the entire hydrocarbon value chain, handling tasks including exploration, production, processing, storing, refinement, and supply in addition to manufacturing a wide range of petrochemical products. I work as a Contract Engineer for ADNOC Offshore, one of the company's divisions. The offshore division of ADNOC is responsible for the delivery and development of oil and gas resources in the waters surrounding Abu Dhabi. With OPEX and CAPEX, ADNOC Offshore spends over 3,000 million dollars annually. The organisation structure is as illustrated in figure 1; Figure 1: ADNOC Organisation Structure1.2 Identified Category Management
The deployment of the iSourcing system, a technology-focused procurement procedure, was chosen as the category management in this study. The need for oil and gas has significantly expanded in the modern era since the Covid-19 epidemic. As a result, ADNOC is forced to spend money on equipment to help them process and refine more oil and gas products. In light of this, the team leader's responsibility is to see that an iSourcing system is in place and can be utilised to purchase the new machines that the company needs to upgrade its operations. Locally in UAE, regionally in the Middle East, and internationally in Western nations, this would apply. This project aims to produce a report outlining the implementation of the change approach. This is done while ensuring the team members and leader have the necessary abilities to carry out the plan successfully. Implementing the new category management strategy is the kind of change being sought. The learner will be the team leader throughout the full category management process since a team has been chosen to oversee the deployment of iSourcing. The practical approach would be utilising various tools and strategies that demonstrate leadership and best practices in change management, along with a focus on the category management data from the ADNOC firm.2.0 Change Management Approach
2.1 Introduction of the Required Change Process
In its Procurement Supply and Management (PS&M) budget, ADNOC had allocated roughly 10 million UAEis before the COVID-19 epidemic. Up to 5,000 domestic and foreign providers are currently utilised in this. Because of the significant financial allocation in PS&M, the ADNOC sourcing method is crucial to their operations in this scenario. Logistics, equipment, and facility administration are all purchased separately by the organisation, all of which fall under the organisation's primary spending categories of computers and technical systems. As a result, they lack a centralised system that would allow all departments to be involved in aiding the procurement procedure (CIPS, 2020). The Burke-Litwin Model (Coruzzi, 2020) can pinpoint the internal and external factors that contributed to the identified change. This model ranks the many change drivers according to their importance and provides evidence of each one in figure 2; Figure 2:Drivers of Change Model When taking into account the ADNOC organisation and indicated change, these elements have the following effects, as stated in Table 1: Table 1:Summary of the Drivers of Change in ADNOC Organisation| Factors of change | Explanation |
| External environment | Supply chain networks have been significantly impacted since COVID-19. ADNOC's ability to replenish stock, equipment, and machinery has been affected. Therefore, ADNOC would participate in strategic alliances by including diverse actors and intermediates in the complete value chain through iSourcing |
| Individual and oganisational performance | ADNOC's investment in iSourcing would reduce PS&M turnover, everyone's performance, and supply chain network satisfaction. |
| Leadership | To ensure iSourcing success, the PS&M will lead and manage efficiently. This inspires and guides other organisations to iSourcing success. |
| Mission and strategy | The achievement of ADNOC's aim to provide high-quality oil and gas products would be ensured by the deployment of iSourcing. The justification for this is to quickly and effectively engage highly qualified vendors. |
| Organisation culture | Implementing iSourcing would promote the collaborative and teamwork-oriented organisational culture of ADNOC. This is due to the platforms offered by iSourcing that provide suitable options for teamwork and collaboration. |
| Task requirements and individual skills | Employees at ADNOC lack the knowledge and skills necessary to deploy iSourcing. This deficit might be filled by offering possibilities for professional advancement. Implementation of the change would be successful. |
| Employee motivation | This report's proposal suggests that providing monetary and non-monetary rewards is necessary to encourage people to adopt iSourcing. This is for employing remarkably contemporary systems of practice. |