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Energy, Oil & Gas Downstream Industry Meeting SCOR for Energy, Oil & Gas: Project Update Forum for industry benchmarking and best practices. Gary Kilponen Treasurer, Director Supply Chain Council Carolyn Lawrence Special Programs Administrator Supply Chain Council. Agenda.
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Energy, Oil & Gas Downstream Industry MeetingSCOR for Energy, Oil & Gas: Project UpdateForum for industry benchmarking and best practices Gary Kilponen Treasurer, Director Supply Chain Council Carolyn Lawrence Special Programs Administrator Supply Chain Council
Agenda • SCC Energy, Oil & Gas Industry Group Update • Seven Steps to Benchmarking • Downstream Supply Chain Analysis • Downstream Overview • Review work to date • Validate Supply Chain Definition • Discuss Supply Chain Strategies for top 10 supply chains • Next Steps/Action Plan Oil & Gas Dec 2009
SCC Energy, Oil & Gas Industry Group History Why we chose to create Industry Group? • Energy, Oil & Gas Resources are critical business and personal topics that are on the top of mind • E, O & G Supply Chains are: • Unique (Capital Projects (ETO), Operations (process), EAM) • Have limited benchmark data • Still very focused on Procurement (Source) • Create a Oil and Gas Supply Chain Process Model to enable industry chain benchmarking and best practice implementation What has happened so far? • Energy, Oil and Gas Industry Group formed and kicked off December 2007 • Teams were formed to address process models and benchmarking, but realized a common high level model was required to move forward • The team created a high level Oil & Gas Industry Segment Definition • Teams have been created and developing strategies and metrics for top oil & gas supply chains • Downstream supply chains have been identified and prioritized • Work has begun on developing supply chain strategy Oil & Gas Dec 2009
Defined The Scope of Energy Oil & Gas • Initial focus on Upstream, Midstream, and Downstream with articulation of some details of the material flow. • Identified Infrastructure Equipment & Maintenance as common area to all three. Oil & Gas Dec 2009
Benchmarking Supply Chain Definition
What is a Supply-Chain Supplier processes Product Management Customer processes Product Design DCOR™ Sales & SupportCCOR™ Supply Chain SCOR™
What is Benchmarking • Qualitative Benchmarking • Comparing best practices among organizations • Maturity Assessments • Quantitative Benchmarking • Comparing levels of measured performance • Assessment of Performance Gaps • Competitive Benchmarking • Quantitative Benchmarking between companies • Identifies superior relative performance
Framework for Benchmarking • Supply Chain Definition • Supply Chain Prioritization • Supply Chain Strategy • Selecting Metrics • Sourcing Data • Creating a Balanced SCORcard™ • Performing Benchmark Oil & Gas Dec 2009
Downstream Supply Chain Definition Using a supply chain identification matrix, created master high-level list of supply chains within Downstream Oil & Gas Dec 2009
Downstream Supply Chain Prioritization Light Prioritization for further assessments Oil & Gas Dec 2009
Framework for Benchmarking • Supply Chain Definition • Supply Chain Prioritization • Supply Chain Strategy • Selecting Metrics • Sourcing Data • Creating a Balanced SCORcard™ • Performing Benchmark Oil & Gas Dec 2009
Supply Chain Strategy • We use a tool called the Supply Chain Strategy Matrix to Identify priority strategic features or attributes of Supply Chains. • Each supply chain strategy is indicated by a collection of ranked features: Oil & Gas Dec 2009
Comparative Ranking • We advocate using a simple ranking system for industry comparison • Each rank corresponds to a specific percentile in industry performance • We do not use averages or other statistical tests • Our key ranks: Oil & Gas Dec 2009
Supply Chain Strategy in 5 Minutes SCOR Benchmarking - Presentation
Initial Downstream Strategies RELIABILITY - The performance of the supply chain in delivering: the correct product, to the correct place, at the correct time, in the correct condition and packaging, in the correct quantity, with the correct documentation, to the correct customer. RESPONSIVENESS - The speed at which a supply chain provides products to the customer. AGILITY - The agility of a supply chain in responding to marketplace changes to gain or maintain competitive advantage. COST - The costs associated with operating the supply chain. ASSETS - The effectiveness of an organization in managing assets to support demand satisfaction. This includes the management of all assets: fixed and working capital. • Each unique combination of ratings defines Your Supply Chain Strategy for the channel • Think of the rating as a desired state, NOT where you want to improve the most Oil & Gas Dec 2009
Initial SCORcard Created (Consumer Gasoline) Oil & Gas Dec 2009
Oils and Gas Industry Group Next Steps • Confirm Supply Chain Strategy • Develop Supply Chain Scorecards • Begin Benchmarking • Possible Full Industry Group Face – to – Face Meeting in Houston in September Oil & Gas Dec 2009
Participation Opportunities and Questions • Supply Chain Council Industry Working Group (IWG): • www.supply-chain.org/node/61 or • www.supply –chain.org/my groups and select the IWG: Energy, Oil & Gas Industry Group • Next Meeting: June 23, 2010 10:00 EST Oil & Gas Dec 2009
Contacts Joe Francis Executive Director Supply Chain Council, Inc. jfrancis@supply-chain.org (Project Sponsor) Carolyn Lawrence Strategic Programs Administrator Supply Chain Council, In clawrence@supply-chain.org (Industry Group Program Manager) Energy, Oil and Gas Industry Group Executive Team: Gary Kilponen Director, Treasurer Supply Chain Council Oil & Gas Dec 2009