Management of supplier partnership
Scope of workshop
Focus and actual processes of Supplier management
List of selected manufacturers
Presenter: Mr. David Sojka
Necessary developments on the actual process
On-line pre-qualification
HSE requirements
Supplier management in SRM 5.0 system
2
Introduction of SHS Supplier Management
Shared Services
Supplier Management Team
MOL-Group has more than 10000 active suppliers!
The Supplier Management team’s main objective are to keep the contact with them
additionally managing and evaluate their supply ability, MOL Group point of view!
The Supplier Management team
in MOL Group’s Purchasing department
Ágnes Jenei
MOL NyRt.
Zsolt Bársony
Klára Pataki (US P)
TVK
Slovnaft
Piroska Ferkó
David Sojka
We also cooperate and provide services for: Gas, LUB, ISSC
Procurement – Supplier evaluation
Invoicing / Payment
Determination of requirements
Continuous evaluation
Suppliers’ selection - prequalification
Procurement
Tendering
Goods receipt / Service acceptance
PO processing
Supplier management processes
Maintenance of ERP Suppliers’ database: 3 different ERPs within MOL
Group – SAP, Oracle and BPCS
Supplier evaluation and classification:
►
►
►
Prequalification process (new supplier) – common process and common
prequalification questionnaire
Continuous evaluation (contracted supplier) – common criteria but different
methodology and different IT tools
Classification – common grades (A, B, C, D) based on evaluation score
Consequential processes:
► Rationalization of supplier master database in ERPs – common process
► On site audit at supplier – common process
► Suppliers Block List – common process and list
► List of Selected Manufacturers – in progress to be common process
► Create the possibility to meet our suppliers in scope of the yearly Supplier
forums
► KPIs and Reporting – shall be implemented and developed to common process
Potential partner or supplier’s pre-qualification
When a supplier pre-qualification?
New supplier
► 3 years non active supplier
► Unblocking supplier
► Company data or activity update
►
Pre-qualification requirements?
Pre-qualification questionnaire
► Tax office certification
► Custom and finance certification
► Signed questionnaire confirmation
►Technical documentation (catalogue)
► ISO certification, if available
►
Data input to database - BMR?
Registry court data of company
► Contact data of company
► Pre-qualified activities
► Qualification grade (A, B, C, D)
► ISO certification data
► Questionnaire uploading
►
YES
Document
Notify
supplier
NO
Incoming PQ
Q>95?
NO
Q>55?
YES
Proposal for
New supplier
(market research)
YES
YES
Is further
assessment
needed?
Onsite audit/
First sample/
Piloting
YES
NO
Load
assessment report
Into database
Upload into
database
Prequalification
questionnaire
Satisfactory
NO
Send PQ
to new supplier
System- BMR
Purchaser
Supplier
management
Potential partner or supplier’s pre-qualification (Actual process)
Completed PQ,
Prequalification
Documents,
Certification sheet
BLOCK LIST
ASSESMENT
REPORT
Load
Assessment report
Into database
Supply performance evaluation
When a supplier continuous evaluation
► Every closed order – after goods receipt / service acceptance
The „edge“ of satisfaction
► „C“ satisfactory supplier – corrective actions must be applied
► „C“ supplier within two consecutive quarters = „D“ unsatisfied supplier
► „D“ unsatisfied supplier – proposal for Blocking
Evaluated supplier is quarterly informed about its evaluation by scorecard
D
Keep in database just in special cases,
improvements or be blocked
Evaluation Score: 50 - 74
Blocked quarterly
Less than 50 points
C
A/B
A: 90 – 100
B: 75 - 89
Evaluation scorecard of supplier’s performance evaluation
•
•
•
Price:
Customer satisfaction:
Price
Payment terms
Supplier’s efficiency
•
•
•
Evaluated by Purchaser
Supply ability:
•
•
•
Meeting deadlines
Meeting ordered quantity
Packaging
Evaluated by Requestor (Services)
by Purchaser (Material)
by Warehouse
Active cooperation
Flexibility
E-procurement
Evaluated by Requestor (Services)
by Purchaser (Material)
Quality:
•
•
•
Quality performance
Quality Management System
HSE system
Evaluated by Requestor (Services)
by Warehouse (Material)
by Supplier management
Current cooperation of IT SM tools in MOL Group
Pre-qualification
questionnaire
ORACLE
database
SEM ->SN
Supplier
BMR in MOL
Group
SAP
database
(Generally used for
Pre-qualification at
all affiliates)
BPCS
database
Issofice ->TVK
Supplier
Supplier
BMR ->MOL Rt,
MOL LUB, ISSC,
MOL Romania
Blocking of suppliers
Supplier can be blocked:
► Based on prequalification questionnaire, if MOL Group requirements not reached
► Based on serious findings during the external audit, or not fulfillment of requirements for
improvements identified within audit
► Based on poor performance of services, breach of ethical behavior or HSE requirements,
repeated low quality of product, etc.
► Company is in liquidation or bankruptcy process
Blocking period of suppliers can be from 1 year to forever in serious cases based on
Executive Board decision
11
List of Selected Manufacturers (LSM)
►
►
Unified Electric equipment, Instrumentation and Mechanical Equipment (Rotary machines and
Stationary equipment) – company standards
LSM implementation to prequalification process
Just to be a MANUFACTURER, registered on the List of suppliers and meeting with:
•
•
•
•
•
•
production scope – in comparison with manufacturers from the Lists,
technical and metrological parameters of relevant products – in comparison with manufacturers product from the Lists,
fulfillment of valid legislation requirements and valid standards for relevant products,
fulfillment of relevant product (special) requirements - requirements which manufacturers from List are not able to fulfill,
manufacturers quantity in List from the unification point of view,
manufacturers quantity in List from the competition during selection process point of view.
Technical specifications
(company standards) for
relevant equipment.
To identify satisfactory suppliers,
their contact and commodity
information
LSM
To identify the manufacturers for
Electric, Instrumentation and
Mechanical machines, equipment
and their spare parts.
List of
suppliers
Worldwide companies
and entities
Potential
suppliers base
Supplier Management
Questions and Comments
13
Scope of workshop
Focus and actual processes of Supplier management
List of selected manufacturers. (Vendor list)
Presenter: Mr. David Sojka
Necessary developments on the actual process
On-line pre-qualification
HSE requirements
Presenter: Mr. Zsolt Bársony
Supplier management in SRM 5.0 system
14
Opportunities of the actual and the on-line systems
BMR system
On-Line pre-qualification
Advantages:
- Controlled supplier registration
Advantages:
- Automatic score calculation in the questionnaire
Disadvantages:
- Multilanguage problem due to
supplier pre-qualification at activity classification
- Uneasily manual registration
- Missing automatic up-to-date possibility at
Supplier’s main data (i.e.: attention, name etc.)
- Supplier can not check the result of their own
quarterly evaluation
- Solved multilanguage problem due to
supplier pre-qualification at activity classification
- Automatic registration, and activity classification
- Supplier can up-to date the company details
due to an controlled process
-Up to dated supplier master database in ERP
systems
- HSE requuirements can be published
Disadvantages:
- Manually controll required due to registraion
15
Proposed developments for the optimization
Required developments in BMR
Required developments on GIP portal
►
►
►
Connection between BMR and GIP
Automatic upload possibility of
exported file from GIP
►
►
►
►
►
►
Connection between BMR and GIP
Define pre-qualification categories at
registration part of the web page
Made this categories changeable by leadbuyers
Possibility to send negative feedback to
supplier in case of declined registration
HSE requirement in refinery and it’s plant
releated activities will be presented.
Plant shutdown releated activities will be
implemented to the pre-qualification
questionnaire.
List of Selected manufacturers process
16
YES
Request for
On-line
pre-qualification
Negative note to
Supplier
that the refistration
not required
Import the
CSV file into
the BMR system
Inform the
Lead-buyer
Password to
supplier
NO
On line
pre-qualification
with the same
process
like to original
System
Purchaser
Is the
Database
increasement
required?
Proposal for
New supplier
(market research)
Document
Export the
accepted
questionnaire
from GIP
Passwrod for
SUPPLIER
Supplier
Supplier
management
On-line pre-qualification process
Positive note to
Supplier
With the user rights
The pre-qualification
controlled via GIP portal
The pre-qualification
controlled via GIP portal
Prequalification
questionnaire
Exported CSV file
BMR system data
impoprt interface
Informative note to the
Lead-buyer of the
Pre-qualification result
17
Required developments in the actual system
Brief logical shame for safe connection
Client
MOL
Internet
Supplier
management
Web page
- Registration
- Pre qualification possibility
- Supplier data query
BEA
File integration server
Proposal for connection between BMR and GIP
Internet
Firewall 1. Firewall 2.
BMR
On-line pre qualification test system
Supplier registration:
-In case of potential
supplier registration
-Supplier is able to get
authorization to pre-qualify
itself on the GIP portal by
e-mail and providing
basic company data
On-line pre qualification test system
- Controll on registration
- Due to the pre-qualification
the relevant partners must
accept the relevant HSE
requirements!
-The Suppliers will able to review
It’s pre-qualification and evaluation
Results.
-There will be the possibility to
update it’s company master data.
Scope of workshop
Focus and actual processes of Supplier management
List of selected manufacturers. (Vendor list)
Presenter: Mr. David Sojka
Necessary developments on the actual process
On-line pre-qualification
HSE requirements
Presenter: Mr. Zsolt Bársony
Supplier management in SRM 5.0 system
Presenter: Ms. Ágnes Jenei / Mr. Zsolt Bársony
21
The Three Pillars of the Procurement Transformation
1. Reorganization of Group Procurement
(create competent specialists in strategic sourcing,
contracting and transactional sourcing in all cost categories)
2. Implementation of an IT solution
(Group Spend Management System-GSMS that is capable of
synthesizing all necessary purchasing information out of the
different ERP solutions is key to really integrated purchasing
operations)
3. Professional knowledge, competency and capability
building (ensure realization of efficiency improvement
potential supported by the new organizational set-up and the
proposed IT solution)
NON-HC PROCUREMENT organisation
Group Corporate
Services
Shared
Services
Maintenance
Materials &
Services
Group
Procurement
Engineering
&
Construction
Mechanical
Services
Mechanical
equipment
Technology
Operation &
Maintenance
Architectural
work
Electrical
Services
Pipes, fittings,
pipe bundles,
hoses
Electric
materials,
protective
materials
Compressors
& other rotating
equipment
Mechanical
materials &
fittings
EPC / Refining
EPC / Logistics
Retail
Process
control &
instrumentation
Basic design &
licence
Technological
work
Gas business
General
Services
Local
Coordinators
Energy
Production
Materials
Logistics
Electricity
Biofuels
HSE Petchem
Natural Gas
HSE Refining &
Upstream
Other utilities
Refining
Catalyst
Telecomm.
Services
Petchem
Catalysts and
Technological
materials
IT / Consulting &
other services
Refining
Additives
IT / Software,
licences and
maintenance
Petchem
Additives &
Chemicals
IT / Materials &
assets
Chemicals and
water
treatment
HR services
Security Services
Facility
Management
Financial &
Insurance
services
Packaging &
Laboratory
Materials
US
Procurement
General
Materials&
Communication
Services
General
Material I.
"White”
General
Material II.
"Blue”
General
Material III.
Corporate
Communication
materials &
services
General
Material IV.
Marketing
Communication
materials &
services
International
Procurement
Russia
procurement
Oman
procurement
Pakistan
procurement &
procurement
control
Kazakhstan
procurement &
& procurement
control, Yemen
procurement
CentralEuropean
Procurement
Public procurement
of investment
projects
R+D, Upstream
Laboratory services
procurement, surface
services (public)
procurement
Small projects (COP)
procurement, wellsite logistics, oil-gas
related services
Field operation
related service
(public) procurement
System-Independent Holistic Business Model - Used for the SRM Concept
Procurement Knowledge
Analysis of
needs and
markets
Definition of
strategy for
selecting
suppliers
Supplier
evaluation
Strategic
Supplier
Selection
Cycle
List of
possible
suppliers
„It’s in the air.”
(identified savings)
Requirement
definition
Selecting
suppliers,
closing
contracts
Contract
Management
Selecting
products
and services
„It’s on the table.”
(prepared savings)
Creating
procurement
order
Operative
Order
Cycle
Invoice
reception
and payment
RFx
processes
Requisition
approval
Deliver,
acknowledgement
„It’s in our pockets.”
(realised savings)
Source: Capgemini 2005
Projects of the GSMS Program (SAP SRM implementation)
New Organization structure and category
management
I. Phase
III. Phase
Subsidiaries
MOL
II. Phase
Operative & strategic
processes, service
procurement, contract
management
Extending new
processes to materials
and implementing new
functions
Roll out new processes
to subsidiaries
3S non-CH project
GSMS project
3S: SAP Standard Solution, Non-CH team
GSMS: Group Spend Management Solution
GSMS PROGRAM
Main Development Areas: „Group Level” instead of „Corporate Level”
2006
2007 -2010
TVK ERP
xyz ERP
Strategic Operative
Procurem.Procurem.
Proc.
Proc.
MOL ERP
StrategicOperative
Procurem.
Procurem.
Proc.
Proc.
TVK ERP
xyz ERP
Strategic Operative
Procurem.Procurem.
Proc.
Proc.
Strategic SN ERP
Procurement
Processes StrategicOperative
Operative
Procurem.
Lo
Proc.
MOL ERP
Procurem.
Procurem.
Proc. Proc.
Operative
Procurem.
Lo
Proc.
SN ERP
Operative
Procurem.
Lo
Proc.
SRM
SRM
Operative
Procurem.
Proc.
Operative
Strategic
Procurement Procurement
Processes Processes
Operative
Procurem.
Lo
Proc.
Main Development Areas: „Electronic Channels” instead of „Paper”
2006
2007-2010
R/3
SRM
PReq
PO
Req.
Buyer
email
PO
Del.
Supplier Self
Service
(SuS)
email
B2B,
XML
Supplier
Supplier’s system
Supplier
Supplier
Supplier’s system
Supplier
Main Development Areas: „Supply Base” instead of „Suppliers”
2006
2007-2010
R/3
R/3
Supplier
Master
Supplier
Master
SRM
SRM
Operative Suppliers
Supplier
Master
Contracted Suppliers
Prequalified S.
Registered S.
Supplier identification
Register
Registration
Send Questionnaire(s)
Web Survey
Response
Supplier
Database
Create
Approval
Send Bid Invitation
Send Bid
RFQ/Auction
Change Vendor Data
Self Editing
Details of Supplier Identification
• Supplier Identification
– Ability to complete Web-based registration process for new potetnial
partners
– Customizable registration forms
– Flexible, customizable questionnaires with Web survey tool from
SAP®
• Category-dependent and category-independent questionnaires
– Supplier prescreening for accepting newly registered suppliers
– Monitoring of supply base changes:
• New suppliers created in SAP Enterprise Buyer (mySAP SRM)
(via OPI or manually)
• Supplier data change in via SAP supplier self-services or mySAP
SRM
• Blocked suppliers

Supplier Identification closes the loop between the initial search and qualification and the
operational use of suppliers
mySAP SRM SAP Supplier Self-Service
 WEB based, hosted application for Suppliers where the supplier can connect to
procurer’s purchsasing modul (SRM, MM).
 Ensure functions for suppliers to set up purchasing documents in a close
system Together with procurer. The possibility of overview, modification and
set up purchsasing documents expanded to both operative and strategical
processes:
 Purchse Order (PO)
 SA release orders
 Advise Note (ASN)
 Confirmation
 Invoice
 Credit Note
 Invitation to Bid
 Bid
 The connection to SRM ensured by SAP Exchange Infrastructure (SAP XI)
 Supports the suppliers to manage and maintain it’s relevant Master data:
 System user management from Supplier side
 Supplier cataloge
 Supplier master data (IBAN code, SWIFT code, VAT number etc.)
Supplier Self-Services advantages

Easy to use, customizable surface for Suppliers

User management for suppliers Communication
due purchseing documents (i.e.: Purchase Order,
Goods Receipt)

Allerting function, special workplace for open
tasks
SAP Supplier Self-Service Start-Page
MOL Group Business expectation: Invoicing
Financial transaction requirement:
- Purchase Order issue can be covered by only orders or contracts where the SAP/SRM (partely from MM system) uniqe ID
implemented on the documents in case purchasement of undertaking, material, tool and services.
-Therefore those partners don’t indicate the above detailed relevant ID’s on their invoices should calculate that these
invoices will be sent back without processing.
-The received invoices must fit with legally required forms and contents additionally the proof of delivery must be attached to
the invoices. The Purchase Order’s SAP/SRM/MM identification number must be implemented on the invoice!
-The relevant Purchase Order ID shoud be implemented in the delivery note and each goods receipt documents also. The
delivered goods must be listed according the item numbers of the purchase order. Without these information the not identificable
Invoices (w/o order orcontract ID) the Procurer is going to handling as a false document and it will be sent back without
compensation. In this case the agreed peyment term begins when the missing information completely corrected.
If a Partner of us accomplish without receipt of relevant Purchase Order it is doable only it’s own RISK!
Strategial partnership by SRM…
Traditional way…
… by SRM…
Thank you for your attention!