The importance of sustainable purchasing and supply Introduction

The importance of sustainable purchasing and supply

Introduction to OPITO ¢ ¢ The focal point for skills, learning and development in the oil and gas industry Committed to developing and sustaining a safe, skilled and effective workforce Works in collaboration with employers, learning & training providers, education & academia and partnership organisations Supports relevant training and development to ensure availability of skills ¢ Working with CIPS to make available relevant training and qualifications programmes to provide oil and gas industry with effective purchasing and supply skills

Introduction to CIPS (Chartered Institute of Purchasing & Supply) ¢ ¢ Global professional body supporting standards in purchasing and supply Promotes best practice amongst the profession through networks ¢ Provides qualifications, training and a range of services for members and business community l l l 6 levels of qualifications across the world All UK qualifications are Ofqual accredited Students may start a CIPS qualification with no entry requirements.

Effective procurement ¢ Procurement (purchasing & supply) is a complex, highly strategic role l l l ¢ Relevant in all sectors of industry Covers contracts (negotiating), procurement (purchasing) and logistics (storage/ distribution) Involves every item needed in supply chain Focuses on sourcing, pricing and buying the right things, at the right price and at the right time ¢ ¢ Helps to reduce costs, maintain quality and manage levels of risk in the supply chain Adds value to business by generating new ideas, increasing competitive advantage or improving sustainability

Procurement responsibilities ¢ ¢ ¢ Researching suppliers in new markets Developing new and innovative procurement methods Look for opportunities to improve efficiency, quality of products or services bought or price paid ¢ ¢ Agree and manage service level agreements (SLAs) with suppliers Manages expectations for the business (the buyer) and suppliers

Purchasing and supply in oil & gas ¢ Oil & gas has long, complex supply chains l ¢ Delays or poor quality might affect safety, productivity or profitability Make or buy? l Many materials, affecting many companies, across many countries Reliability of quality and timing = key factor l ¢ ¢ Decision affected by several factors e. g. long or short term costs, levels of risk, timescales Purchasing managers identify most costeffective/ efficient solutions

Sustainable procurement ¢ ¢ Sustainable procurement can help to save money, reduce waste, improve competitiveness and build a business’ reputation Global oil industry has responsibility to manage waste effectively and reduce carbon footprint l ¢ E. g. by effective delivery and improved packaging Need to assess how energy-efficient and sustainable company purchasing processes are ¢ ¢ CIPS structured online audit process maps organisations’ purchasing systems against best practice Enables quick response to changing customer needs

Roles and skills in oil & gas ¢ ¢ Engineering and technical roles essential Oil & gas also requires: l Lawyers, accountants, geologists, plumbers, electricians, crane drivers, mechanics, divers and designers ¢ Purchasing and supply roles cover all levels l l Operational e. g. buyers and store managers Strategic e. g. supply chain analysis/strategic sourcing

Benefits of effective purchasing and supply ¢ ¢ ¢ Reduces costs and waste and improves profitability through economies of scale Ensures just-in-time supply Improves cash flow through favourable prices/payment terms ¢ ¢ Improves efficiency ensuring suppliers hit deadlines Increases business’ competitiveness and adds value through innovative products and services