REAL COST value in procurement PROJECT SPONSORS
REAL COST value in procurement Written by Dale Benton Produced by Heykel Oluni
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Through a combination of strategic organisational realignment, comprehensive supplier management framework, a Center of Excellence and a strong commitment to structured category management approach, Tasnee continues to deliver real cost value to stakeholders
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ince its inception over 20 years ago, Tasnee has created a network of diversified industries by working with prominent companies across the globe. One of the significant factors behind Tasnee’s success has been the way the company has transformed the procurement organisation to accelerate the process of capturing synergies and creating an organisation capable of supporting the company’s growth to deliver unrivalled value to stakeholders. Organisational realignment Tasnee has re-designed the organisation to support the Business Units at operational level and, at the same time, affirm the strategic direction of the company. With the aim to deliver the highest quality of service at the optimal cost level, Tasnee focussed on: • Monitoring cost and spend • Implementing structured and robust processes • Focussing on customer service by processing transactions quickly and effectively Tasnee has also established Key Performance Indicators (KPIs) to monitor the performance of the global procurement organization at the SBU and operational levels. This has allowed the procurement leadership to set clear and focused objectives, provide clear understanding of the roles and responsibilities throughout the business, and ensure empowerment and ownership at lower levels.
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Our energy source for the future: APPRECIATION.
THIS IS CLARIANT: SPECIALTY CHEMICALS CREATING VALUE We engage with the issues of the future. This approach is deeply rooted in our brand: we focus on appreciation – in all areas in which we are active. The result is innovative solutions to lower emissions, reduce raw material consumption, and create sustained added value. This is precious to us.
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Supplier Management Framework focus on supplier segmentation Tasnee’s supplier management has allowed the company to: framework enables the company to • Better understand the supply base look at Prequalification, Segmentation, • Optimise resource allocation on Relationship Management and performance management, risk Performance/Risk Management management, and development when selecting potential suppliers. • Focus on building relationship Through this process, the company with the most critical suppliers works with suppliers to establish responsible sourcing, reduce the The sourcing strategy is developed supply chain risk and ensure consistent based on the segment of its suppliers. standards across its supplier base. A high spend, high criticality supplier Once a supplier meets the standards will have a deeper and more strategic set out by Tasnee, the company then relationship than a low spend works towards building a supply low criticality tactical supplier. chain strategy through a companyTasnee has also initiated a Supplier wide Supplier Performance Survey. Performance Management mechanism “Depending on the criticality of the to evaluate the performance of commodity, suppliers go through a a supplier over a period of time. multi-stage qualification process. The survey includes the rating of This allows us to select our supplier suppliers from people within the partners carefully, ensuring that they company, as well as the response understand our requirements and are a of the suppliers themselves. good cultural fit for the business,” says “The survey covers strategic Saleh H. Al Suwaiti, General Manager, Procurement Center of Excellence. Tasnee also carefully segments its suppliers based on the The year spend and criticality to the that Tasnee business. A dedicated was founded
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commodities and is planned to be rolled out to more commodities and services down the road. The survey uses the same set of questions across all strategic suppliers of a particular commodity to gain a better understanding of the performance of certain suppliers,� Al Suwaiti says. “It will create a full 360-degree view of the relationship between our company and our suppliers and we can engage with the suppliers and the business to drive improvement opportunities.� The company also works from an internal perspective applying a strict code-of-conduct on the way its employees engage with suppliers, providing a clearly defined set of ethics that ensure a fair, honest and transparent working relationship. To further streamline its relationship with the suppliers, the company has implemented a Vendor Invoice Management (VIM) system. This enables suppliers to submit invoices electronically, streamline the invoice processing and allow Tasnee to improve its on time payment performance overall. Center of Excellence (CoE) It is not only through the Organisational Realignment and Supplier Management Framework that has allowed Tasnee to transform its procurement organisation and work with key suppliers. The company has also setup a Procurement CoE, a global effort that has complete responsibility over strategic initiatives, statistical benchmarking, performance analytics, KPIs, policy and
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“The survey uses the same set of questions across all strategic suppliers of a particular commodity to gain a better understanding of the performance of certain suppliers�
Tasnee introductory video
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SUPPLY CHAIN PARTNER OF THE CHEMICAL AND PETROCHEMICAL INDUSTRIES IN SAUDI ARABIA OUR SERVICES Handling of all kinds of liquid and dry chemicals and petrochemicals. LOGISTICS -
Own silo storage and warehousing On-site operations and complete management Value-added services on site and off site Transport of bulk materials and packed products Logistics consultancy, optimisation and EPC contracting
CONTACT Tel: +966 (0)3-3618317-119 | Fax: +966 (0)3-3618316 | E-mail: info@s-a-talke.com P.O. Box: 10610, Jubail Industrial, City 31961, Kingdom of Saudi Arabia
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procedures, and the supplier management process. The CoE aligns with the company’s central procurement strategy, which is focused on the delivery of parts and services at the highest specification but at the lowest costs possible. “The Center of Excellence provides the essential oversight over the procurement organisation globally, manages procurement processes, monitors performance and implements strategic initiatives and the supplier management program. This has allowed Tasnee to have a classleading procurement organisation and furthered its ability to develop a strategic and value-added relationship with its suppliers and internal customers,” Al Suwaiti explains. As with everything with Tasnee, the overarching goal is to identify and deliver real cost value in the supply chain and procurement process and it does this through an all-inclusive approach to procurement directed toward both internal as well as external stakeholders.
Technology Through the implementation of technologies such as Ariba, Spend Visibility, e-Auctions and the VIM system, Tasnee is very much a company that is embracing the technological shift of the modern supply chain industry. “Technology is one of the keys to procurement being able to deliver best value goods and services from our suppliers across the globe,” Al Suwaiti says. “We need to automate as much of the transactional activity as possible to ensure that we have time to devote to value-added activities.” Tasnee has invested heavily in procurement technology solutions, particularly for automation of processes on SAP, introducing spend visibility tools and improving SAP reporting functionality. “By
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“Technology is one of the keys to procurement being able to deliver best value goods and services from our suppliers across the globe” SALEH H. AL SUWAITI General Manager, Procurement Center of Excellence
In a career spanning 25 years, Salah Al Suwaiti has worked extensively across the procurement and supply chain domain. After obtaining a Bachelor degree from King Fahad University of Petroleum & Minerals, he joined Ar Razi (SABIC) as Procurement and Contracts Representative. During the initial 10 years of his career, Al Suwaiti has been promoted to Procurement Manager and was responsible for overseeing all Procurement and Contract function and end-to-end SAP Procurement implementation for operational performance enhancement. Post this time, he moved to SABIC HQ to engage in the SAP and Shared Services transformation projects. He was then assigned as the Project Manager for the EMDAD Supply Chain Project which was a strategic project aimed at implementing an integrated supply chain. In 2013, Al Suwaiti moved to the National Industrialization Company – TASNEE as the Logistics Manager. During that time he obtained a Master Degree of Global Business Administration. When TASNEE was starting its Procurement Transformation program in 2015, he was promoted as the General Manager, Procurement Center of Excellence to oversee the entire program and ensure strategic focus globally, and was also selected as the Vice-Chairman for the Gulf Petrochemical and Chemical Association (GPCA).
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introducing automation in SAP functionality, Tasnee has come up with innovative ways to speed up the procurement process and improve overall performance,� Al Suwaiti says. The company has also signed an agreement with SAP Ariba to tap into the leading cloudbased procurement platform and implement a comprehensive tool to cover the entire P2P chain. Already, the company is reaping the rewards for investing in technology, with an additional 20 percent savings generated in some categories as a direct result of implementing reverse e-auction capabilities. Sustainability As a global player in procurement, Tasnee invests a significant amount of money into ensuring that the company operates an ethical, sustainable supply chain. As a company that oversees large volumes of imports and exported goods, Tasnee prides itself on the accountability of itself and its suppliers. “Through the procurement transformation, we were able to implement a category management structure, introduce BUYER approach which laid out standard sourcing guidelines, strengthened our organisation through recruitment of qualified resources and providing extensive training, developed standard reporting, and rolled out strategic technology initiatives.� adds Al Suwaiti. The Tasnee procurement transformation program has been immensely successful and continues
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to deliver results in the form of: • Average savings of 10 percent for services, 8 percent for MRO and 3 percent for chemicals and packaging amounting to total realised savings of 150+Mn SAR to date since the inception of the program in 2016 • Enhanced the transaction time by 24 percent • Increased coverage of framework agreements “More and more collaboration between companies in the form of Group Purchasing Organizations (GPOs) aimed at leveraging
purchasing power and enhancing service efficiencies is also one of the trends in procurement.” adds Al Suwaiti. Running alongside these initiativesis the company’s Centralised Procurement Manual, a series of policies and procedures which detail the way in which the company operates. Tasnee has taken great strides in holding its employees accountable to complying with the policies laid out in this manual and acts on this through audits and further training opportunities. As a company, Tasnee values the importance of Corporate Social Responsibility deep within its central mission. “Our mission is to achieve the interest of the society by preserving the environment and
< Tasnee has been recognised for excellence in social responsibility 14
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“The key is to know when it’s appropriate to invest in a new technology, implement new initiatives and engage right resources to extract the full value out of existing investments”
GULF STABILIZERS INDUSTRIES LOCAL PARTNER FOR ADDITIVE SOLUTIONS GSI is a joint venture between Zamil Chemplast – Saudi Arabia’s and AddivantTM, which is the world’s largest plastic additives and a global specialty chemicals company. Supported by Addivant’s Manufacturing, R&D, Technical Services, and Quality Assurance facilities worldwide, GSI commits to pursue strategic alliance and strong business partnerships as being the most reliable local provider of value-added products and services with global reach and standards. www.gsi.com.sa | aaasfoor@gsi.com.sa Tel : +966 13 341 7727 | Fax: +966 13 3400797 P. O. Box 35625 Jubail Industrial City – 31961 Saudi Arabia
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contributing to the human development through raising awareness, education, qualifications and skills development,” he says. This commitment to CSR stretches wide and incorporates Tasnee’s approach to its supplier base, ensuring that its suppliers share similar CSR ambitions and values. “We work closely with our colleagues in Sustainability, Product Stewardship, Risk and Legal, to ensure that we are all fully aligned on these issues,” comments Al Suwaiti. “We are even engaged with some third-party audits to ensure that we are fully compliant and that we can demonstrate continuous improvement.”
Concluding thoughts As Tasnee continues to advance its procurement strategies and deliver true cost value, efficiency and quality, Al Suwaiti believes that the company must find a balance in order to remain successful. “The key is to know when it’s appropriate to invest in a new technology, implement new initiatives and engage right resources to extract the full value out of existing investments.”
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www.tasnee.com