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RMC-02-104 Strategic Sourcing of Materials and Services: Overview and Approach Utilizing Cross Functional Teams

Phillip W. Hill, Equiva Services LLC

Format:
Electronic (digital download/no shipping)

Government, NonMember - $0.00
Government, NonMember - $25.00

Description:

The refining industry struggles to maintain consistent profitability and competitiveness. The industry trend is to consolidate in an effort to create synergies that will lead to lower costs and improved profits. In addition, companies are re-evaluating the role of purchasing / procurement / supply chain (procurement). The historical role of procurement was relegated to an administrative function; purchasing is now viewed as a competitive weapon in adding value to the bottom line. In particular, Strategic Sourcing is fast becoming the competitive purchasing weapon of choice for bottom line improvements. Shell Oil Products US, Motiva Enterprises LLC, Shell Deer Park Refining Company and Shell Chemicals LP (US) (hereinafter referred to as the Alliance) collectively spend $1.7 B annually on non-hydrocarbon (excludes feedstocks, electricity and natural gas) materials and services. The Strategic Sourcing approach outlined within this paper was driven by the recognition that we were not effectively managing the sourcing of materials and services and were ‘leaving money on the table’. This paper provides an introduction to strategic sourcing concepts and application utilizing cross-functional team and also details the Center of Excellence (COE) Team concept implemented by the Alliance to reduce costs and increase value. The development of the COE concept was the product of a cross-functional team named RSCI (Refining Supply Chain Improvement Team) and consulting expertise from Pittiglio Rabin Todd & McGrath (PRTM). The RSCI Team determined that $80 MM in value improvement could be realized via the COE concept over a two year time period.

Product Details:

Product ID: RMC-02-104
Publication Year: 2002