Global Sourcing with Growing Local Procurement Wang.pdf · Global Sourcing with Growing Local...
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10/2014 Global Sourcing with Growing Local Procurement Oil & Gas Procurement Excellence Forum Asia 2014 08 Oct 2014
Transcript of Global Sourcing with Growing Local Procurement Wang.pdf · Global Sourcing with Growing Local...
10/2014
Global Sourcing with Growing Local ProcurementOil & Gas Procurement Excellence Forum Asia 2014 08 Oct 2014
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Hatch Business Sectors
THERMAL
NUCLEAR
RENEWABLE POWER
TRANSMISSION & DISTRIBUTION
WATER
INFRASTRUCTURE SERVICES
PORTS AND MARINE TERMINALS
RAIL & TRANSPORTATION SYSTEMS
COAL
NON-FERROUS
LIGHT METALS
MINING & MINERAL PROCESSING
INDUSTRIALMINERALS
IRON & STEEL
IRON ORE
HYDROCARBONS
LNG
OIL SANDS
Oil & Gas Infrastructure Metals
Power
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Global Sourcing Opportunities
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Global Sourcing Equation
Traditional Supplier
Tender Price Landed CostEmerging Country
Tender Price
Landed Cost
Labour
Material
Overhead
Gross Savings
Emerging Country
Full Cost
More Design
Review
More
Inspection
Expediting
Other
Mitigation
Costs
Risk Mitigation Costs
Net
Savings
In Most Cases,
Net Savings Range
From 10 To 30%
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Rising of Local Procurement
The Economist,
October 2013
More material
flow controls
More local
competition
More financial
flow controls“Buy local”
policies
More local
standards
More
information
flow controls
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Global Sourcing and Local Procurement Puzzle
Local 4
Local 1 Local 2
Local 3Local 4
Global?
Maximizing Global Sourcing benefits while factoring
the growing Local Procurement specificities
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Supplier Competitiveness Rating
LV Transformers MV Transformers HV Transformers
South East Asia
Australia
Africa
Russia
Europe
South America
North America
Lacks
certifications
& after sales
support in the
region
Major cost advantage + proven
track record +adequate support
New
offering
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Collaborative Supplier Rating Management
Hatch Supplier Manager recommend
a Chinese supplier to regional
procurement manager in South
America, North America, Africa and
Oceania
Regional Procurement Managers assess
supplier competitiveness in their regions
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Supplier Ratings Process
Exchange
Rates
Exchange Rates Variations Against USD; Ref=1 on March 2008
0.6
0.65
0.7
0.75
0.8
0.85
0.9
0.95
1
1.05
1.1
2008/03
2008/04
2008/05
2008/06
2008/07
2008/08
2008/09
2008/10
2008/11
2008/12
2009/01
2009/02
2009/03
2009/04
2009/05
2009/06
2009/07
2009/08
2009/09
2009/10
2009/11
2009/12
2010/01
2010/02
CAD/USD
AUD/USD
ZAR/USD
BRL/USD
EUR/USD
CNY/USD
INR/USD
CLP/USD
RUB/USD
Labor
Rates
Labor costs per hour in USD - Source Economist Intelligence Unit (January 2009)
0
5
10
15
20
25
30
35
40
Indonesia
Egypt
Philippine
sIn
dia
Ukraine
China
Mala
ysia
Turkey
Russia
Brazil
Romania
Poland
South K
orea
Czech
Rep.
Australia
Japan
USA
Canada
Germany
Countries
US
D 2009
2010
Country
Risks
China Vendor Risk
0
5
10
15
20
25
Quality
management
Planning and
control
Employees
qualification
T&Cs compliance
Financial health
Safety, CSR and
SD
Communication
Engineering
Before
mitigationAfter
mitigation
Logistics
Costs
Ma
cro
-
eco
no
mic
Inte
llig
en
ce
CredentialsQualificationsFeedbacks Size and
Location
Su
pp
lier
AB
C
Inte
llig
en
ce
Supplier ABC Ratings
Reviewed and
approved by
Sourcing
Category
Manager(s)
Reviewed and
approved by
Procurement
Regional
Manager(s)
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GPI Portal
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Sourcing Optimization Timing
Sourcing Optimization Study:
Minimize Capex, Schedule and
Risks through optimal packaging
and contracting strategies, Global
vs. regional vs. local sourcing,
sourcing risk identification and
mitigation plans, etc.
Bidders lists populated only competitive
and low risk suppliers
Increased leverage in PO / Contract negotiation and in the resolution of execution issues
Sourcing Optimization
Study on Opex
Ongoing plans and estimates adjustments through supplier alerts, updated lead time and price trends, updated
country sourcing risks, etc.
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Balanced Global Sourcing and Local Procurement
• Price
• Quality
• Risks
• Sustainability
• Regional benefits
