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Solution
Executive Summary
In this assessment, it focuses on evaluating the process followed in category planning and its eventual implementation. This is evaluated in context of XXX organisation and particularly sourcing of HP laptops in broad IT spend category. The challenges encountered and their likely solutions has been evaluated. This is guided by the rationale of noting the scope of achieving value, reducing risks and managing goods and services supply process. The findings in this assessment identify success in development of category plan is essential for success of an organisation. This has been achieved by using tools and techniques including Kraljic Matrix, Porter’s 5 Forces analysis, 4T’s model, SWOT analysis, STEEPLED, Mendelow Stakeholders Mapping and Cater’s 10C’s model. This is while at the same time using the Peter Blocks model effectively. Further, the findings from these tools evidence that challenges impact successful category plan implementation. The incurred issues entail inexistence of rationale decision making as evidenced in data and facts, traditional procurement approach and lack of standard category planning. This is particularly for their HP Laptops spend category. Appropriate solutions have been established relevant for XXX organisation successful category planning implementation.
In line with this assessment findings, a set of recommendations which are relevant for XXX in category of spend entail;
- Establish strategic supplier relations management through modernisation of PS&M practices
- Pursue holistic and detailed sourcing approach in their spend categories in line with their terms and conditions
- Harnessing consistent category planning by being updated with prevalent changes
- initiate relevant decisions in category plan in XXX organisation to attain a fact-oriented and guided by existing information
- Harness appropriate opportunities which target procurement teams such as L&D approaches for understanding the appropriate category plan
Table of Contents
1.1 Organisation Background. 3
1.2 Selected Spend Category. 3
2.1 Mendelow Stakeholders Analysis. 4
3.0 Current Situation Analysis. 6
3.1.1 Evaluation of Supply Positioning. 7
3.1.2 Suppliers Preferencing. 10
3.2.1 Micro and Macro Analysis. 11
5.0 Category Planning Implementation, Challenges and Solutions. 15
5.1 Customer- Centric Plan established. 15
5.2 Evaluation and Monitor Category Plan. 16
5.3 Improving team practices in categories plan. 16
6.0 Conclusion and Recommendations. 16
Figure 1:Category Planning Steps. 5
Figure 2:Mendelow Matrix Stakeholder Analysis. 6
Figure 3:Peter Block’s Stakeholders Category. 7
Figure 4:Summary of trends of laptops procurement for XXX Organisation. 8
Figure 5:Kraljic Matrix Analysis Summary. 9
Figure 6:Pareto Analysis Tool 10
Figure 7:A summary of Suppliers Preferencing. 11
Figure 8:Porter’s 5 Forces Analysis 12
Figure 9:Summary of the Industry Lifecycle. 13
Figure 10:Summary of Agile-Martin Christopher 4P’s Model Summary. 14
Figure 11:Summary of SWOT Analysis 16
Table 1:Specifications of spend and volume. 8
Table 2:Summary of Laptops sourcing in XXX and their brands 10
Table 3:Summary of STEEPLE Analysis. 15
1.0 Introduction
1.1 Organisation Background
In this report, XXX organisation which is an oil and gas organisation in Sultanate of Oman has been focused for evaluation. Currently, this organisation operates 6 subsidiaries in overall to achieve their core mandate of delivery of majority of the crude oil production and natural oil gas supply. Considering the organisation ownership, the Government of Oman owns 60%, Royal Dutch Shell (34%), Total (4%) and PTTEP (2%). Further, in all their 65 subsidiaries, they are involved in managing 90,0000 km2 with upto 250 production oil fields, 55 producing gas fields, upward of 8,000 active wells. To achieve this, they engages more than 8,500 employees from 70 different nationalities and upward of 80,000 contractors in their active operations. In line with ProPartner Group (2022), XXX organisation operates by embrace of requirements of In-Country Value (ICV) strategy. The rationale of this is maximising local procurement of goods and services and improving the ability and potential of Omanis and entities to achieve sustainability in commercial practice for sultanate.
Hence, for achievement of their strategic objectives, Procurement and Supply Management (PS&M) is mandated with the role of effectively developing their category planning. As part of this, a detailed implementation plan will be provided with all challenges of implementation plan identified with the challenges mitigation identified.
1.2 Selected Spend Category
In this report, procurement of hP laptops has been selected as the category of spend. The rationale of this is informed by the fact that XXX operates upto 60 distinct IT and Technology systems. Since COVID-19 emerged, XXX has been working towards a fully digitised systems of operations. This is the in the oil and gas sector as Offshore Technology (2022) note that they have gone through a 31% of increased digitisation since the Q3 of 2020. Hence, owing to the criticality of the overall digitisation process and particularly the hP laptops, the category planning is instrumental for guiding the procurement and supplier selection. Inappropriate selection would be costly and time intensive for the organisation. The relevance of this is what Sooriyamudalige et al. (2020) identify as New Zealand challenges in supply chain integration as being solved by an improved data visibility, reduction of costs and procurement process risks by implementing a successful category management.
2.0 Category Planning
Category planning is defined in CIPS (2022) as a process followed in organising resources for focusing on particular areas of spend in an organisation. The rationale of this is developing and implementing strategic approaches for delivering a long-term added value. According to Hyttinen (2018) the relevance of using the category planning in an organisation is ensuring successful identification of key value categories, increasing the categories sales volume and lowering the organisation spend. As offered in CIPS guidance notes, the different steps used in the implementation of category planning are summarised in figure 1;
Figure 1:Category Planning Steps
As summarised in figure 1 summary, through a consideration of the noted phases, in this assessment, a category of plan would be established for XXX and gas organisation. The scope of this report also entail an implementation plan identifying challenges in implementation of the plan and strategies for the challenges mitigation.
2.1 Mendelow Stakeholders Analysis
In context of New Zealand, Reiss (2022) argue that Mendelow Matrix tool is relevant for identifying people who matters (see figure 2);
Figure 2:Mendelow Matrix Stakeholder Analysis
For success in category planning, different stakeholders level of interest and influence need to be evaluated.
Low-Influence; Low-Interest- Competitors with XXX, L&D teams and customers are categorised as either low interest and influencing category planning. This is with process development affected significantly.
High-Influence; Low-Interest- This include the finance, legal teams and regulators in Oman oil and gas sector who are influenced by category plan. This is to note budgetary allocation and pursuing appropriate regulatory terms and conditions.
High-Influence; High-Interest- The category entail engagement of end-users, expert and advisors in collaboration for success of the category planning.
Low-Influence; High-Interest- Management and administration for XXX are defined as having low influence on category planning but significant interest. Hence, they ought to be informed since they are engaged in giving direction to the organisation and the strategic objectives.
From the provided stakeholders analysis, it can be further be evaluated by use of Peter Block Grid Leadership Center (Sopow, 2019) as illustrated in figure 3;
Figure 3:Peter Block’s Stakeholders Category
In regard to Bedfellows stakeholder category, process of interaction would be a priority in the multiple sourcing strategy adopted. Additionally, in regard to allies, maximum support could be provided with opportunity to share the vision informed in their achievement. This is while their opponents consistent update, feedback obtained, honesty based on their practice and their adversaries guiding necessity to come with a challenging decision for sourcing approaches used.
3.0 Current Situation Analysis
3.1 Internal Analysis
To evaluate the purchasing trends in XXX, it is relevant identifying specifications, overall volume (within a period of 8 years, trends and forecasting) and category of spend. The specifications are noted in Holma et al. (2020) as guiding a process of explain products and services provision in the contract implementation. As illustrated in table 1, within a timeline of 8 years, the hP laptops procurement, volume and spend are provided.
Table 1:Specifications of spend and volume
Additionally, for demonstrating the procurement trends of the hP laptops being sourced, a representation in a graph format is applicable (see figure 4). This identify the spend amounts relevant for informing laptops information sourced.
Figure 4:Summary of trends of laptops procurement for XXX Organisation
In figure 4 summary, it is relevant arguing that the HP sourcing trend is under a consistent increase from the amount in 2014 (1,600) to increasing in a double fold by the year 2022. This is with a substantial changes in the preferences of the brands which are being sourced which is as a consequence of increased remote working for non-technical employees who do not have to necessarily work in offices.
3.1.1 Evaluation of Supply Positioning
For the provided summary of the spend amounts of hP laptops (see figure 4), it is evident that category plan is important for XXX. Hence, by use of Kraljic Matrix Analysis, it is possible to identify and recommend best practice in management of the supply risks (Montgomery et al., 2018). Therefore, the scope of XXX organisation operations, more stakeholders are noted by use of the identified tool.
Figure 5:Kraljic Matrix Analysis Summary
In figure 5, the hP laptops spend category can be identified as a leverage item. For Oman case, hP Laptops can be supplied by multiple suppliers and as such defined with intense competitiveness. This is an evidence of low supply risks being evident. Therefore, in XXX organisation, they ought to ensure they prioritise the likelihood of attainment of a lot of likelihood and incentives for negotiating appropriately for the organisation go gain cost savings. According to Σταμάτης (2020), through a successful category management, it is possible to make sure that prioritisation on development of strategic partnerships is attained by the different suppliers contrary to the existing independent procurement approach.
Additionally, considering the laptops procured are viewed as incurring a lot of costs with many alternatives available for high category suppliers, the category plan is essential for ensuring clients purchasing power is harnessed through a standard-based sourcing of purchasing requirements. In summary, for XXX, the different sourcing plan and purchasing demands (see table 2);
Table 2:Summary of Laptops sourcing in XXX and their brands
Further, for XXX, they embrace sustainable relationships with their different suppliers hence harnessing achievement of clients value in a trust-based relations, collaborative practice with innovativeness embrace. To evaluate this, the Pareto 80/20 Analysis tool could be used as illustrated in figure 6;
The use of Pareto Analysis Tool in context of XXX ensure that for their 20%, this is a representation of application of hP laptops which could harness their overall efficiency with 80% hence clients needs attained. Also, Pareto analysis offer guidance for improved suppliers relationships which need to be promoted to gain 80% success in category planning. This is through a successful reduction of any form of wastage and save on costs. Hence, as evidenced in Shrivastava et al. (2021) by prioritising on case of New Zealand, appropriate classification of the suppliers is instrumental which has earlier been noted as leverage.
3.1.2 Suppliers Preferencing
Further, to come up with a category plan, it is important for the suppliers to be classified/preference determined for ensuring various suppliers are engaged. According to Rezaei and Fallah Lajimi (2019), the importance of using this tool is to profile different expenditure values and suppliers preferencing possessing varying capability. In line with the figure 7 findings, suppliers classification is in areas of core, preferred, tactical and a nuisance.
Figure 7:A summary of Suppliers Preferencing
In regard to core suppliers, suppliers category such as Startech Middle East WLL, Tradeloop and Rahat computer, they are protected, and their interests prioritised for achieving an increased value. By leverage, maintenance and increasing the volumes of hP procurement is attained. Further, in preferred category, this is well established by prioritising on strategic and leveraging on practice of leveraging on different opportunities. Also, in regard to tactical, it is expected to pursue a detailed exploitation within the timelines agreed upon and category of spend. This is with nuisance required to be divested/unlisted/blacklisted from the current list of XXX organisation suppliers as it is unfit in progressing as a reliable supplier.
Through offering a priority to the core suppliers, category plan is noted in Bailey et al. (2021) to holistically influence the scope of XXX relationship with other suppliers effectively. The relevance of this is that the current XXX relationships with their different suppliers is relevant.
3.2 External Analysis
3.2.1 Micro and Macro Analysis
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