ASSGNMENT: 1. Procurement process systems of the company below to be critically reviewed and to analyze whether the steps in procurement system in line with waste reduction goals and value chain. Also to critically discuss the risks if the company didn't change or improve the process or system whereby if we ignore the risk will damage the environment, angry society, branding issue and at last possibly bankruptcy of the company ( 50%) 2. -Critically advise 1. Procurement Strategy, 2.Strategic sourcing and outsourcing , 3. Supply risk for improvement of the step/part of the procurement process/system above. How procurement risks will be mitigated through contract performance metrics, insurance, or other means (50% of the word count) ---------------------------------------------------------------------------------------------------------------------------------- 2500 words Abstract not included in word count Need example and back with theory References : 2011 above at least 20 ------------------------------------------------------------------------------------------------------------------------------------- The company below is the oil and gas services mainly purchase of drilling chemicals and equipment have fully certified Integrated Management System ISO 9001, ISO 14000, and ISO 18000 but still not comply with API Q2 ------------------------------------------------------------------------------------------------------------------------------------- Purpose of SCM Policy & Procedure o Policy provides the guiding principle in managing supply chain activities o Procedure specifies the method or standard process to perform work/task o Both Policy and Procedure are intended to ensure procurement activities are carried out in efficient, fair, transparent and cost effective manner o Both policy and procedure are designed to increase integrity and at the same time reducing risk exposures and negative impact to the company o All sourcing and procuring activities are subject to the terms and conditions stated in each policy and procedure o Failure to comply with policy and procedures resulting in disciplinary action. o All employees to sign and adhere to the corporate Governance Group Code of Conduct o SCM process will be measured and audited by internal or external party based on approved Policies and Procedures Global Procurement Policy i) Compliance and Code of Conduct ii) Conflict of Interest iii) Procurement Processes and System Compliance and Code of Conduct • Disciplinary action will be taken in the event of any unauthorized or non-compliance with the policies and procedures. • In order to promote an environment of fair dealing and integrity, COMPANY requires that all employees to sign and adhere to the Corporate Governance Group Code of Conduct. • All employees are strictly bound to the following conduct:  Act with fidelity, honesty, integrity and in the best interests of COMPANY in managing its Procurement activities.  Prevent any prejudice to the financial interests of COMPANY.  Fair and impartial in the performance of their respective delegations. At no time should any preferential treatment be given to any group or individual directly or indirectly related to COMPANY during the relevant Procurement activities.  Should not abuse the power and authority that has been given to them in the policy and related procedures. Conflict of Interest No employees shall participate in the selection, award or administration of contract if a real or apparent conflict of interest would be involved. Situation of conflict of interest with the business of COMPANY should be declared to the Management. Procurement Processes and System The approved procedures shall provide clear demarcation of responsibilities between all parties involved in Procurement activities, where: • Each Department Head shall be responsible for the planning and determining the required Goods/Works/Services for its effective operation. He/she shall also be responsible to coordinate with the Finance Department to ensure the availability of funds or the necessary funding facilities. • All acquisition processes shall only be managed by the assigned personnel of Supply Chain Unit. DEMAND MANAGEMENT • Understanding of the current and future needs of the operations. • Conduct an analysis of the previous purchases in order to determine how the particular need was satisfied in past operations requirements. • Assessment of available stock in storage and storage location. • Identification of lead time, delivery time, Minimum Order Quantity (MOQ) & geographical factors of procurement activities. • Conducting an industry and commodity analysis. Acquisition Management  Describe details step by step process starting from sourcing up to delivery  Consist of :  Procurement Threshold (Petty Cash, Verbal Quotation, Formal Quotation, Competitive Bidding)  Evaluation  Selection & Approval  PR/PO process –(processing through ERP System - SAP)  Emergency Purchase  At least 3 quotations from accredited suppliers selected from the Approved Vendor List  RFQ/RFP must contains: -The material specifications, unit of measurement, minimum order quantity, price per units. -General Condition/scope of work /technical specification. -The Inco term specifications and final destination. -The payment term. -The validity period. -The location, closing date and time for the submission of the quotations.  To ensure that suppliers receive COMPANY Standard Term and Condition , sign the Non-Disclosure Agreement ("NDA") prior to submitting the quotation EVALUATION 1.2.1 Technical Evaluation Product Capability ,Lead time/schedule, Development and product planning, Product specification/Certificate of Analysis, Vendor Capacity 1.2.2 Commercial Evaluation The cost competitiveness , Compliance with the terms and condition, Cost of impact to COMPANY related to payment term, i.e. cash flow and/or currency , Transportation Cost Taxes/duties  Must "Pass" Technical Evaluation, then only can proceed with Commercial Evaluation  Supplier that "FAIL" in Technical Evaluation can be used as reference in commercial evaluation.  Comparison may be present in Table Comparison Summary, example of evaluation in Procurement Procedure EMERGENCY/SPOT The following information and documentation are required when raising PR for emergency procurement: a) Nature of the urgency, e.g. poor planning, loss circulation, ad-hoc request by customer, etc. b) Envisaged results if the standard procurement procedure is to be followed. c) An approved Spot/ Emergency Purchase Form for chemicals if: • Alternative supplier if the product has NOT been endorsed by company authority d) Financial justification which includes, but not limited to the following • Initial unit buying price • Emergency purchase unit price • Price difference per unit • Total price difference based on total order quantity (value & percentage)