BP Angola Dealer Relationship Management

Introduction

The results of this study derive from a qualitative research conducted in BP Angola with Procurement and Supply Chain Management pros, Suppliers Performance Leaders (SPL) from Businesses Section and Suppliers.

The collection of the interviewees was founded primarily on their involvement in supplier management and their availability at that time when the researcher was gathering data.

The researcher designed to interview at least nine people, three from each group (Procurement professionals, Suppliers Performance Market leaders and Suppliers), since three folks from each group have been deemed as a proper sample size. A period of fourteen days was established for the completion of the interviews. Therefore, by the end of both weeks period, only seven interviews, not nine, were completed. Three from Procurement office, two suppliers and two from BP Angola Functions Departments (customers of company services or Supplier Performance Leaders). The Researcher attempted to obtain confirmation for the interview with the third supplier, but for reasons unknown until today, this dealer never verified or declined the invitation, however the constant follow-up with telephone calls. The 3rd interviewee from the finish User group were required to leave the united states credited to unplanned compassionate leave. Even though reduced range of interviewees, the Researcher decided to keep the sample size at seven, as the key stakeholders involved with supplier management in BP Angola were contained in the interviewed populace.

As may be inferred from above, this chapter reveals the results of the interviews conducted and also the inside BP Angola document reviewed. There are several purposes to doing so. The first is to examine the current methods and systems set up in BP Angola (Exploration and Development) for Provider Romantic relationship Management, second identify if the current Supplier Romantic relationship Management (SRM) process is adding value. Third is to ascertain if, as before hypothesized, these procedures and systems for dealer romantic relationship management post contract prize were effective and compare them with most widely known practice models. The fourth and final purpose is to judge the validity of the sooner stated hypothesis regarding the execution of Dealer Management strategy.

The main designs that surfaced through the study are vastly constant with the researched in the literature. These designs are definition, business drivers resulting in supplier romance management, value that may be produced from proper supplier relationship management, types of interactions, forms of implementation, benefits, troubles and improvements. However, the study shows that there are a few differences between your literature and the situation under study especially across the understanding of what supplier marriage management is really, modes of execution, as well as the issues. The key styles that surfaced from the research and the determined variations will be mentioned throughout this section.

Supplier Marriage Management is an extremely broad theme and it was not possible for all areas of this subject in this research, however, the Researcher attempted to cover whenever you can the key elements relating BP Angola SRM, challenges and benefits that can be obtained through SRM.

Supplier Relationship Management in BP Context

The main objective of this research was to research and explore the consequences of various measurements of supplier relationship management (SRM) through effective contract management at BP Angola (Exploration and Development) in order to improve added value. More specifically, this study aimed at analyzing the perception of various internal stakeholders in BP Angola about the idea of Supplier Romantic relationship Management, who should bought it, interface between internal stakeholder in BP Angola with suppliers, kind of human relationships that BP Angola maintain using its suppliers and also to examine the issues from the implementation of Supplier Romantic relationship Management initiatives from Source Chain Management point of view. Furthermore, the purpose was to raise the understanding of Provider Relationship Management approach and its benefits.

As may be inferred from above, this Chapter explores and clarifies the relationship between the contracting strategy used to establish the relationship between BP Angola and its Suppliers and what value can be produced from this approach. Before addressing this interconnection through the research of primary data, it will probably be worth explaining the Distributor Marriage Management in BP context.

Over the past several years, there has been a growing interest in BP to develop a technique that helps to optimise the relationship using its key suppliers. In today's highly competitive environment, there is intense pressure to improve the efficiency and performance of procurement activities. BP is putting into action globally a portion defined practice for procurement, to operate a vehicle effective management of suppliers and segmented spend across major types of goods and services called Category Management. This process is reinforced by key four pillars. The first pillar is Category Management Planning, which defines spend categories the business needs to concentrate on, defines a built-in plan to talk about the prioritised categories; the second pillar is Market Sector Strategy, which identify tactical levers to be drawn to increase value from the source markets and provides overall direction for market sector. The third pillar and one of the very most used by the neighborhood SECTIONS is Strategic Sourcing, the same as the previous pillar identify the tactical levers to be pulled to increase value from the source markets, define method of the supply market, make a deal and deliver agreements based on the strategy. The last but not least is the Company Management, which rigorously take care of provider performance with practical key performance indicators (KPIs), determines the appropriate management strategy and framework so that provider performance matches or surpasses BP's stated objectives and goals.

This previous pillar of the Category Management strategy was the concentration of our key data examination, as it is where in fact the Supplier Romantic relationship Management takes place.

However, BP Category Management approach seems to contradict with O'Brien (2009). The four pillars that O'Brien (2009) described support the Category Management strategy are: breakthrough thinking, customer emphasis, cross-functional groups, facts and data backed by three foundations like: proper sourcing, managing the market and traveling change. O'Brien, 2009, argues that Company Marriage Management is big enough to be always a concept entirely separate from Category Management. However, although these foundations and the pillars are different; the guidelines of Category Management are the same.

According to O'Brien, 2009 in his book "Category Management in Purchasing", Category Management can deliver dramatic results to organizations in several monetary and market conditions and can help to respond positively to a variety of different business needs and drivers.

The past CEO of the Chartered Institute of buying & Resource, Ken James, mentioned that

"Category Management when deployed effectively delivers benefits to the business through optimizing the worthiness that may be derived from the supply string. It gives a structured framework that may be applied across the organization's purchasing requirements. " (O'Brien, 2009)

Although the academics and professionals tend to acknowledge the benefits of Category Management, however the technique of the success have a home in the implementation of this strategy.

IntOpsR1 supports the view

"We pick a strategy and we drive everyone towards execution of this strategy and then something will happen and adapt our strategy and make an involvement. Another strategy appears instead of growing existing strategy, we tend to go to one size fit all, we usually do not look at the unique circumstances of the locations. The success of a strategy is not the sort of strategy you select, but it is principally linked to the way you execute it. "

BP Group in the interest of identifying how to develop more effective marriage using its key suppliers has enlarged the concentration from formal contracts to more behavioural and relational way in today's Category Management methodology. The Supplier Marriage Management approach and its own implementation is discussed in higher in the section below.

Supplier Relationship Management - Procedure and Implementation

Most respondents declared that they are not familiar, even though aware, associated with an entirely separate Distributor Relationship Management initiatives being performed in other business units other than the Provider Management approach under Category Management initiative which has been implemented globally in BP, and for that reason did not provide insight into similarities or dissimilarities between the various sections. However, the overview of answers to other questions, other documents, company data from global Category Management effort implementation revealed that the initiatives are broadly similar in proper purpose in the sense that they respond to the strategic objectives of BP to establish an appropriate company relationship management approach and framework to ensure that the performance of the suppliers are reaching or exceeding BP's stated expectation and goals. However, the data also revealed that there surely is not really a cohesive view of the baseline activities undertaken to do this BP strategic target mentioned in the Dealer Management. Before talking about this difference, we will look at the general approach used to execute Category Management and the rule that underlines the Supplier Relationship Management under distributor management in the Category Management. The principal data exposed that Provider Management is put in place through four steps. The first step is validation of the appropriate type of marriage with the company. The aim is to ensure delivery of the value objectives identified in the Sourcing Strategy and also to target the resources on suppliers who've the greatest effect on BP's performance. Suppliers are prioritised predicated on spend and their criticality to the business. Suppliers are categorised into four levels of marriage types, which require increasing degrees of BP effort and rigour to control: Transactional, Managed, Core and Strategic. Transactional are those suppliers where performance has limited effect on day-to-day procedures, low expenses and nominal opportunities for Total Cost of Possession (TCO). However, this is similar to what Kraljic, 1983 called in the Product Purchasing Matrix as Non-Critical Items (low profit, low resource risk). Managed are those suppliers with item services/materials, with moderate volume level spend and with some opportunities to address TCO through better supplier performance. Inside the Kraljic Model, this is comparable to Leverage Items (high income, low resource risk). Central are those suppliers with major impact on core functions, high spend, high risk, provides competitive gain and opportunities for TCO reduction, value creation and risk mitigation may are present. In Kraljic model this is comparable to Bottleneck Items. Strategic suppliers are those that are critical to BP's central functions; can stop procedures if issues occur, highest level/highest expenses or highest risk, can offer competitive advantages, significant Total Cost of Ownership lowering/value creation/risk mitigation opportunities may exist. In Kraljic model this is similar to Strategic Items (high income impact, high source risk). This, therefore, brings quality on what suppliers BP must focus on. IntSCMR2 statements

"if we keep using Category Management as a base, also really helps to determine the proper, core and managed suppliers and really helps to determine what kind of romance are you going to obtain with them"

Dyer (1998) facilitates the view that with limited resources that firms has to give attention to supplier romantic relationship management, it's important that companies sections their suppliers based on criticality of the assistance or goods provided and effect on bottom line income. Gordon (2008) added, with so many suppliers companies cannot possibly deal with performance plans for every single supplier of these supply base. Businesses should concentrate on strategic suppliers who are included business lovers as well as core suppliers, who require integration and development plus other suppliers which may supply a high-cost or risky services, (Gordon, 2008).

Gordon (2008) concluded that supplier segmentation process is a starting point for talk among Procurement and other stakeholders about which suppliers may have the greatest impacts on the company's own performance, which suppliers harbour the greatest potential dangers, and which suppliers have to be measured, supervised, or improved. Supplier segmentation also helps identify company relationships that needs to be targeted for termination (Gordon, 2008).

The second step is establishment of Dealer Romantic relationship Management governance structure. The aim of this step is to identify the roles, tasks, accountabilities and decisions privileges so that they are known and realized by all members from PSCM, the finish End user and other Functions. This step reinforces the company standards defined under company's code of conduct and how every individual must behave independently or collectively.

According to BP process and strategies for Category Management, the company management governance structure is available to ensure that suppliers comply with the contracted service levels and provide guarantee of the supplier's performance. The governance structure also ensures that appropriate management resources are being allocated in accordance with the importance of the company to BP's business. This also helps to establish an accepted structure for the management of risk and escalation of issues within BP and company organisation. IntSCMR3 remarks

"I think Category Management model is the way forward. It defines what every person should be doing and what the partnership with provider should be, which is fantastic".

O'Brien, 2009 reinforced this view when argues that Category Management really helps to provide framework to supplier management and define roles and tasks for the supplier romantic relationship management.

The third step contains expanding and agreeing performance metrics based on value goals. The goals for performance are reviewed annually to promote year-on-year improvement. Qualitative and quantitative data is accumulated, collated and reported through the communication programs proven by governance structure.

However, the legal deal between BP and distributor does not point out BP's intention to implement Dealer Management through Key Performance Indications (KPIs) on the scorecard to be able to improve company performance yr on time through improving safe practices, dependability and efficiency and thus lowering Total Cost of Possession.

However, respondent IntSCMR2 contended that BP treats its suppliers similarly regardless the differentiation that BP Category Management process says.

IntSCMR2 claims

"We actually treat our tactical, core and managed suppliers pretty much the same, the sole change we do is the number of meetings we've with them per 12 months and actually the discussions will be the same. "

However, IntSCMR2 argues that even the procedure of setting up the key performance indicators is not regular using what is promised in the Category Management process. IntSCMR2 says

"I believe even more fundamental than that, on my previous role, I have seen examples in which a billion dollar deal we described the KPIs and Metrics before the contract was agreed and actually the business enterprise didn't understand the KPIs and the Metrics, you do not understand why they are there to begin with, nor understand how to assess them, the company will not understand them and does not know how to measure those KPIs"

Respondent IntSCMR2 arguments are in line with Cai et al. (2009), when he argues about supplier performance management scorecard. Cai et al. (2009), claims that lots of companies follow supplier performance management as the quest for the perfect supplier scorecard. Companies think that if they find the right metrics on the scorecard, then supplier performance will improve. Cai, et al. (2009), added that company performance management requires more than company scorecards, which are only one aspect of the procedure. The success on company performance improvement through provider management depends upon putting an effective business process in place (Cai, et al. , 2009).

The last step is to ensure regular and strenuous management of performance to assure delivery against targets. The performance of provider and the partnership is examined and tracked at collection intervals against the stated goals and goals. This step is intended to make interventions as required and performance is watched against improvement ideas and the lessons learned are fed back to the tactical sourcing process for another contracting cycle. This task also defines the occurrence of meetings with respect to the relationship type defined at the first step. Proper suppliers quarterly performance review conferences are needed at business product level, which two performance review meetings have an additional strategic concentration with professional level management in attendance (or can be individual executive romance management conferences if required by specific business product). For Main suppliers BP process aspires for quarterly or semi-annual conferences and total annual or ad hoc meetings. However, IntOpsR2 contended

". . . . looking at Key Performance Signals during the Performance Review Conferences is retrospective. The constructive way to do this will be to look of what we have to do to get things better. It is looking forward rather than backward"

Good distributor performance is a key driver in permitting companies to attain performance excellence. But for the author, the question still remains, how BP Angola can effectively effect a good performance of its suppliers?

Type of Company Relationships

Wagner, 2002, argues that lots of internal and exterior factors have an impact on the type of relationship company retains using its suppliers in the resource chain. The external factors are the environmental factors and characteristics of the industry. The inner factors that influence supplier associations include interpersonal factors, disposition of the company, other company-internal factors and, in particular the sort of service to be contracted (Wagner, 2002)

Oil and Gas industry is a capital extensive with very high cost contracts, high risk and high technology where only few suppliers are specialized in certain strategic services. Most of these suppliers have a tendency to dictate the rule in the partnership.

This view has been evidenced during the research interview.

IntSCMR3 argues that marriage with the larger suppliers who have very high technological services like Drilling Rig service providers, BP battle to maintain a collaborative romantic relationship, as those suppliers have a tendency to govern the partnership and dictate the rule. IntSCMR3 cases

"for example with tendering for Drilling Service for a fresh exploration block in 2010 2010, we developed a scope of work which was very shiny, platinum where only two suppliers could provide it. The company we determined to negotiate with had several barriers for negotiation and we were pressured to pay these great billions of dollars, which is a lot of money. We experienced a number of negotiations with this supplier and we noticed we were going to a point where we were reaching some degree of value plus they converted around and said that is it. If you'd like this service, this is what can cost you. It was three or four times higher than our estimate. I think we tried out to be collaborative with our suppliers, but I think because of the attribute of the industry - high technology, risky, we're able to not create a good type of relationship. "

Although all the seven interviewees understood what supplier relationship management was at term of notion and are all involved in lively supplier/customer marriage management, however, the viewpoints will vary around the type of marriage that BP Angola retains using its key suppliers (strategic suppliers).

While IntSCMR3 is convinced that BP Angola maintains collaborative relationship with its key suppliers and arms-length marriage with non-strategic suppliers, both PSCM respondents do not agree with this view. IntSCMR2

"I think it is difficult to generalise across the board, however in overall it is arms-length/transactional romantic relationship BP Angola preserves with the strategic suppliers. Based on my experience and in what I have seen, particularly on project area it is certainly an arms-length/transactional relationship"

IntSCMR1 facilitates this view

"The concentrate should be on proper and collaborative strategy but the actuality shows often. Key suppliers' notion and behavior is to look at BP as exploit. Because of the criticality of the service/ material they offer and high change cost, BP should invest to change or equilibrate the energy in the partnership. "

It is clear from the primary data collected from the review of the internal books within the company and the info obtained through the interviews that BP Angola recognizes suppliers as a critical resource so that a source for competitive gain. BP as global company seeks to structure its provider stock portfolio and collaborate with its key suppliers in such way that they can take full good thing about the potential that these suppliers can provide (BP PSCMcp Handbook; Category Management - 2010).

While BP Control believes that the existing Category Management strategy can create more adaptable, responsive relationships in so doing bettering BP's performance, however, the Distributor Management under the Category Management procedure does not identify the model of relationship to possess with different service providers. Apart from the numbers of conferences per year to have with strategic, supervised and transactional suppliers, there is absolutely no difference in the strategy in romance with these suppliers. The sort of relationship implemented for tactical or non-strategic suppliers is a unconscious approach rather than a identified strategy under BP romance management methodology.

Interestingly one of the two suppliers interviewed argued that BP Angola maintain "fantastic working romance" with his company, as the other believes that BP Angola relationship along with his company vary from arms-length to collaborative.

This view is recognized by IntOpsR2

"It varies from Arms-length to collaborative. When we started the agreement we were constantly in place of conflict and moved to cooperation, where we build the trust in the relationship and we are now moving to more collaborative way of working. "

The important observation made at this time was that when all factors and their weightings are taken into account, the provider/customer romantic relationship that results can be plotted along a continuum which range from adversarial/arms-length relationship to long-term strategic partnerships (Dyer et al. , 1998; Wagner and Boutellier, 2002. )

Drivers and Benefits of Supplier Relationship Management

All the respondents violently decided on reasons and benefits for developing a good supplier relationship management with key suppliers. The reason why and benefits get caught in two main categories.

The first is commercial element. A lot of the respondents assume that adopting the right way for the right distributor, a good distributor romantic relationship management leads, in long-term, to commercial benefits, of lower costs, quicker business lead times, better quality, safer and reliable procedures. IntSCMR2 cases:

" if you are in reality leveraging your scale and providing a substantial volume of your projects to the people suppliers, you'll be looking to get lower rates while they will have a certain stream of demand"

Respondent IntSCMR3 will abide by above view and added that good dealer relationship in supply chains lead to reduced cost and safer procedures and statements

". the only way you can understand the cost base of your suppliers is having a good romance with them. We realize that supplier will usually build on some extra cost, because they want to make just as much money as they can, to which with good relationship this extra cost can be reduced or reduced"

Respondent IntSCMR1 does not only believe that on cost lowering at short run, but also argues that good provider relationship provides long term lasting cost savings permitting tighter process integration.

One of the distributor interviewed, strongly agrees that good company relationship may bring advantages to both provider and customers. IntSupplierR2 claims

"Working nearer to resolve issues, shared risks and in turn benefits, transparency of activity where possible solutions can be made to cut costs to both customer and supplier and subsequently payments collected on time, and innovations onto new agreements/facilities and areas. Therefore would reduce added costs and streamline the BP contracts globally"

However, respondent IntOpsR1 casts some doubt on the claim that supplier management provides commercial benefits. This respondent condition

"I believe it offers you a quicker response, you get a better chance to yank in the right people at the right time plus they get comfortable and familiar with your expectations and your standards so we aren't always reinventing the wheel because your changing your suppliers. . I guess to me is more operations efficiency than cost reduction"

Ambrose, et al. , (2010) stated that as companies go after a supplier romance management approach, they do so in a sequential manner. Starting internally, with work aimed at minimizing costs, especially through better sourcing strategies and then externally through Dealer Management. It could be argued that whenever a supplier relationship management reaches a level of maturity, the overall relationship focus increase beyond a specific contract and focus on the overall marriage with a supplier as entire (Ambrose, et al. , 2010).

The second category is the increased performance or procedures efficiency through ongoing improvement. Again a few of the respondents believe Supplier romance management causes improved performance or procedures efficiency in long-term.

Once the suppliers are decided on the challenge quickly becomes ensuring that the guaranteed value appearing out of their selection actually finds its way into company. For both suppliers interviewed, they assume that performance management can be an important element in the distributor romance management and agreement management, when well put in place, make a huge difference but require willpower and rigour to apply. Respondent IntSupplierR2 remarks

"We believe provider romantic relationship management is one of the key strengths that collaborate to provide successful contract outcomes and performance".

Respondent IntSupplierR1 will abide by the above view and explained that good dealer relationship delivers improved value for both client and provider and cases

"dealing with same suppliers in a long term relationship provides balance, continuity of service, and improved value as the distributor has an improved understanding of BP's principles, goals and methods of doing business. Through the suppliers' perspective, the partnership provides opportunities for increased business, and an ability to deliver better results to the client as the partnership advances and the customers' values, goals and methods are better founded and understood"

However, respondent IntOpsR2 argues that supplier relationship management also contains working individuals interface since it is the people that make decisions to aid (or not) and do the initiatives that distributor offer for an improved performance. InOpsR2 boasts

"In term of Performance Review Reaching during supplier romantic relationship management, it works well; there is a process and folks. It allows versatility to raise things that are essential to us. The worthiness for the reason that is having constructive interactions. The constructive way to do this will be look of what we need to do to get things better. All this is dependent to the people behaviour"

BP Head of Procurement says

"The Dealer Management process helps to drive performance improvement 12 months on time, through increased basic safety, dependability and efficiency, thereby lowering total cost of possession of goods and services. This expectation is defined in the contract".

However, Ambrose, et al. , (2010), argues that some companies implement Distributor Romantic relationship Management process because they are told that it's the right thing to do. They think that distributor performance will improve and the results will speak for themselves. Emiliani (2010), says that while supplier performance improvement is a distinctly possible result, a specific cost reduction predicated on that improvement can't be assured because different companies implement distributor relationship management with differing degree of skills. Emiliani (2010) argues that success will have a higher probability when senior management understands the business enterprise drivers for Distributor Relationship Management and therefore truly gives it support.

One of the biggest challenges, however, is that the business drivers for Supplier Marriage Management is not lower and dried. That is, it is hard to guarantee a precise return on investment for Supplier Marriage Management.

Accountability for Growing and Maintaining Distributor Relationship Management

It is accepted that supplier romance management requires both top management and people at functional level commitment. That your author believes mean that accountability for delivery of dealer relationship management must be set up and roles defined. The respondents were asked if they recognized who the Solitary Point of Accountability (SPA) was for Provider Marriage Management in the Angola Business Device. The answers differ, with regards to the respondent history (Techie or PSCM). In general, for the complex respondents, the SPA for Provider Relationship Management is certainly the End Consumer (Techie), for PSCM is the combined role between PSCM, company and the Tech team. IntOpsR1 cases

"If you ask me I think [Supplier Relationship Management] still is one of the Lines, because the human relationships with a supplier is held and administrated and motivated forward in terms of learning by the technological side of the equation. So if you want to manage a merchant at higher-level across locations and resources, i quickly still think it should be owned by technological group that contain ownership onto it. If we make an effort to drive all it from PSCM perspective, from a setting up contract point of view, then we kind of missing the secret. What we might get is a bit more an inexpensive solution, but you are not actually getting to a place of having good technical conversations. They are specialized companies and they will run circles around you"

This view is recognized by IntOpsR2

"I think that the partnership should be owned by the Range (Techie), because we understand it, and we are also coping with folks who are in the specialized team in supplier side. I think PSCM role is to support and to enable and help recover relationship"

The above answers seem to suggest that the drivers for supplier relationship management is, in a single hand, increasing the supplier technical performance, and in the other, that romance with supplier is bound to the service lines management they provide. Poirier (2001), argues that supplier romance management success will depend upon putting a powerful business process set up. Many think that company performance management through Distributor Romantic relationship Management is an individual or section responsibility and it is mostly about setting up provider scorecards. Poirier (2001), claims that Supplier Romance Management cannot you need to be left to one single department to deal with. The Supplier Marriage Management is a process and not an event; nonetheless it requires support from stakeholders beyond Procurement and Techie, as supplier marriage impact many functions.

In case of PSCM respondents, they assume that someone needs to have a role of controlling, coordinating and facilitating the supplier relationship. Many of them believe the best function to permit the supplier romance to occur is PSCM, but similarly they support that Lines or End User must also take ownership of that relationship because they're the one that are going to be the final users of the service or receptors of the products, they will be managing your day to day relationship with supplier, understand what is working well and what's not working, quality of the task and the folks supplied.

IntSCMR2 says

"So I believe that it is dual ownership but PSCM must take accountability and facilitating it to ensuring it happens but the Line must evenly take possession for actually the activity to occur".

IntSCMR2 argued that in case a company is really going to truly have a strategic relationship with its high impact suppliers, the corporation will need to have a multi useful team and not just PSCM or technical team. IntSCMR2 mentioned

"there are others who should be involved, certainly quality guarantee quality control people, health insurance and basic safety, logistics, etc, everyone can provide source to the partnership. None single person can provide type from all areas. One individual will be only targeted to one part of the relationship"

However, while IntSCMR2 thinks that PSCM is in charge of Supplier Relationship Management, (IntSCMR3) argues that he never known the Range, PSCM and different people malfunction for the Provider Romantic relationship Management.

IntSCMR3 claims

"I think it is just a joint accountability; there isn't a single point of accountability. We all come to be employed by BP and we are all BP, and not Procurement subunit of BP. I feel that everyone owns the suppliers marriage management, the Line and PSCM who are the two tags of the deal. We go to supplier mutually. PSCM will not push Supplier Romance Management if the Collection does not worry. You can not have two different people pressing to different path. It has to be unified procedure. PSCM may own the process, the documents, nevertheless they are not in charge of the partnership with the company. I think it is made for PSCM to be the administrators, and the Brand accountable for example for drop of thing in rig or for things that we don't have control of or whatsoever"

IntSCMR1 facilitates this view

"Taking into account the nature of business, the Supplier Relationship Management needs to be a cross function role. The line is near to the distributor daily and should manage them effectively but the PSCM should manage them strategically. "

IntSupplierR1 respondent thinks that Supplier Romance Management is the complete team responsibility; beginning with technicians offshore, support service engineers, older management and Panel of Directors at the company side.

The above talk features that because the duty for the implementation of the Dealer Relationship Management initiatives is distributed between different parts of the organisation it makes it difficult to have alignment between the various players.

However, Poirier (2001) argues that Procurement function must climb in inside importance and becomes a car for assisting the strategic motives of the firm through inputs from key suppliers in the distributor relationship management, because Procurement function is really the only function that details every area of the business enterprise.

PSCM being the central point of connection with suppliers that delivers different type of services for different Lines or technical team, should own the Company Relationship Management process at high level, coordinate and manage it in conjunction with the key stakeholders involved in that process to minimise the chance of interfaces with suppliers.

BP Angola Provider Romance Management - Difficulties and Improvements

The respondent recognized that there are some troubles to be beat for the successful implementation of the dealer romantic relationship management initiatives in BP Angola. Supplier romantic relationship management process requires many functions and will depend also on dealer engagement. It really is recognized to be difficult to bring all these pushes in the same plan. It is recognized that there is a slight tension between PSCM attempting to do things right and Technical group witnessing the Supplier Romance Management as process influenced and bureaucratic.

IntSCMR2 explains

"from what I've seen, there continues to be yet to be comprehended, yet to be liked by the wider organisation of why we could repeating this [Supplier Romantic relationship Management] and also what are the benefits of SRM. At the moment it is merely considered another PSCM process potentially".

Another identified obstacle is around implementation of Category Management process which includes the Provider Management. Lots of the interviewees indicated the opinion that the word "Category Management" bores them, that it's lacklustre, a data-heavy process that are uninspired, however all feels that it is efficient way of handling supply string.

IntSCMR3 explained

"We had process and techniques which were not yet determined as Category Management. I think Category Management model is just how forward. It identifies what everyone should be doing and what the relationship with distributor should be, which is fantastic, but it will require time to put into practice properly. I have seen a number of themes, the rigour of supervision, it is most likely too much I will suggest. We are going from a completely uncontrolled system to controlled system, which over short term is unrealistic to try to make that happen".

IntOpsR1 expressed his frustrations about obstacles with Supplier Marriage Management approach under Category Management and added

" [Category Management] can help shape the sensation that people are a little of pendulum type of thing, when I say that After all, we select a strategy and we drive everyone towards execution of that strategy and then something may happen and change our strategy and make an intervention. Another strategy looks instead of growing existing strategy, we tend to go to one size fit all, we tend not to take into account the unit circumstances of the locations"

It looks however that Category Management is probably not a moving management fashion, it is deeply changing just how BP's manage its suppliers and it definitely still requires a lot of work and fine tuning to be able to deliver value that it assures. IntSCMR2 argues

"In term of Category Management and utilizing it and ensuring it works, I feel that is true, must be embedded in the whole business and should be considered a way of doing business as typical rather than another process and controlling the romantic relationships, getting the worthiness. We got some issues let us discuss it, lets obtain it resolved and lets the task done, enables improve things both for our business and because of their business and until we get to the quality discussion with them, we will battle to move from something which is a burden, which can be regarded as outside of our daily job. The partnership with these suppliers should be part of our and their day to day job"

Another identified concern relates to the organization capability and insufficient connection with most PSCM Specialists in term of Category Management procedures and procedures and its own implementations. IntSCMR2 state governments

"We are still ticking bins, we are not adding value, we are not having quality conversations, and we don't realize the particular leavers are for our business and their [Provider] business. We are not taking into account whether we live strategic customers for these people or whether we have been just a little niche for his or her business. I believe we neglect to recognise that and another concern is we neglect to take long term approach to our business to deliver value at lasting. I think they are some of the true secret issues that we are having with this current procedure.

Joseph 1996, however, argues that in any case, when discussing Category Management, one should be aware of the fact that it is a lot harder to apply it than talk about it. The to begin developing and employing a written Category Management plan takes a huge amount of your energy.

This means that the company needs to learn the construct of Category Management in term of provider management because of its implementation. Distributor Management is an integral element in term of managing suppliers and also for implementation of Category Management. By devoid of a proper Dealer Management strategy or initiatives, however, boosts the question of whether the company and suppliers generally see Category Management as process powered or value motivated initiative which can bargain the success of Category Management effort.

IntSCMR2 supports this view

"I believe so; I think it isn't the procedure itself that is at fault. Until you actually demonstrate to the Range and suppliers what it is we actually aiming to do and why we want to do it and just why is it important to them it will become as yet another process it will become another thing that you need to do just for a hell of doing it. Until we can actually change that mindset and try to understand what we want to do here that is not going to improve. If people don't realize what we want to do absolutely they'll think it is merely an activity, it is PSCM activity again, another process to block the day-to-day activities.

Another challenge is due to best practice and knowledge showing across the business units. Most of the respondents explained that they were not familiar with Supplier Romantic relationship Management initiatives taking place in other business units in addition to the provider management under Category Management effort. There is not a distributed lessons learned among the business enterprise units that could allow improvements on the implementation of these initiatives. This reveals a challenge for the implementation over the segment to be able to protect the global aspect of the company. Supplier Relationship Management is big enough to be always a concept entirely separate from category management, with similar degree of complexity and comparably measured toolkit. However, this obstacle becomes more significant realizing that currently there is not a common process for dealer relationship management in BP.

Another problem that was accepted is selecting the right kind of romantic relationship with certain suppliers. Although Company Management process under Category Management differentiates the kind of suppliers by tactical, core and handled as explained above, it generally does not differentiate the sort of relationship to get with these suppliers. This presents challenging to BP Angola as this approach will not allow company to collaborate with its key suppliers so that they can take full benefit of the potential that these suppliers can offer. IntSCMR2 reviews

"If we keep using Category Management as a base, also helps to determine the tactical, core and managed suppliers and helps to determine what kind of relationship will you have with them, but again, I think what it is clear to me is, although we look this from our perspective who are our tactical suppliers, the suppliers might not necessarily view us as the same, they could look us just as smaller piece of business to overall business that they have, so you know. You can consider a provider to be strategic, but will not mean necessarily that you will be strategic to them too. The main element factor for a romance to work is to comprehend what their conception of that romantic relationship is. "

Another important concern and section of improvement lifted is the contracting strategy followed by BP Angola. Usually the formal period of the normal legal contract with its suppliers is three years with 24 months extension options. This process has been recognized by all respondents that will not allow to build a long term romance with any provider, as through the first two years company and company remain learning mutually the way to do business or build the basis for the relationship. IntSupplierR1 states

"The first yr of any long-term contract is tumultuous as both people learn each others working styles and develop a cohesion and knowledge of each others expectations. We imagine the longer term of the contract the more beneficial to both customer and dealer as the customer benefits from the suppliers continuing knowledge of the customers facility and goals, and the supplier can perform better because they have developed a knowledge of the existing center and customer features / expectations that they can leverage in their future work".

Respondent IntSupplierR2 support this view by saying

". generally closer interactions are developed further than 3 years to suit both parties"

BP internal respondents also support this view. IntOpsR2 lay claim

"With longer term contract helps to understand the business drivers and to build the required Local Content for the agreement. You cannot coach a Far off Operated Vehicle (ROV) pilot in three years time.

The push that pushes that you three years deal is that the markets movements and the expectation of getting a better offer in three years".

These troubles have been recognised as being a few of the challenges that a global company with decentralised sections in addition to working in different countries at different degrees of maturity in terms of industrial basic faces. It is also recognised that the next thing is to supply the business units with a construction for creating a robust Supplier Relationship Management process as totally individual process from Category Management to aid a practical and consistent execution across the organisation, this consists of selecting type of supplier relationships predicated on services or goods they offer, length of the relationship strategies early in the contracting and sourcing strategy development process through the use of a strategic sourcing tool. The need for ownership of supplier marriage management beyond the PSCM function has also been discovered.

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