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Solution
Executive Summary
This analysis looks at how a company manages its supply chain worldwide. This is because there is a widespread belief that alterations to the supply chain and global sourcing strategies will significantly impact the market. Strategic logistical implications and supply chain management affect firm success in a globalised economy. Using the Abu Dhabi National Oil Company (ADNOC) in UAE as a case study, we analysed their supply chain and identified the most effective implementation technique. The organisation has also taken note of all potential threats, as well as any favorable openings.
ADNOC’s supply chain is multi-tiered and comprehensive, as proven by the company’s activities. The organisation will be better able to achieve its goals and implement its corporate strategy with the help of this categorisation. The Influence of the supply chain strategies has been evaluated using several methods, including Porter’s 5 Forces, SWOT, and STEEPLED analysis. The balanced scorecard is used to assess both monetary and non-monetary factors. All the while using a comprehensive approach based on Mendelow Stakeholders Analysis to determine the best action for ADNOC.
- Based on the findings of the investigation, the following suggestions were made:
- Collaborative strategy, networking, and innovation can ensure supply chain sustainability.
- Supply chain development can be enhanced with more options for implementing L&D methods.
- When it comes to implementing processes and making decisions, all parties involved in the supply chain need to be consulted and considered.
- Converting their current supply chain into a fully functional end-to-end supply chain that can meet all of their customers’ needs. This is crucial for managing hazards throughout the entire supply chain.
Table of Contents
1.1 ADNOC Organisation Background. 3
2.0 Market Changes Impact on Supply Chain. 5
2.1 Porter’s 5 Forces Analysis 5
3.0 Sustainable Global Sourcing Decisions. 8
3.1 Considered Factors in Sustainable Global Sourcing Decision. 8
3.2 Sustainable Global Sourcing Decision Making. 10
3.3 Global Supply Chain Risks Identified. 11
4.0 Strategic Logistical Implications of Globalisation. 13
4.1 Globalisation and Relevance; Supply Chain and Logistics Context 13
4.2 Strategic consideration associated with the global nature of the supply chain. 14
4.3 Strategic Logistical Risks and Opportunities in Globalisation. 15
5.0 Supply Chain Management on Corporate Performance. 16
5.1 Performance of Supply Chain Affecting organisational Objectives. 16
6.0 Conclusion and Recommendations. 18
1.0 Introduction
1.1 ADNOC Organisation Background
ADNOC Offshore organisation is being ranked as the largest oil and gas producer in overall UAE with a mandate to develop, produce and deliver oil and gas resources. This is noted in ADNOC (2022) as having been operating in UAE from 1962 where their products and services are as summarised in figure 1;
Figure 1:ADNOC Offshore Organisation Summary
Today, ADNOC Offshore is noted as the world popular oil and gas production organisation with a current more than 7 million barrels of oil and gas daily. This is equitable to 3 billion standard cubic feet of oil and gas every day. The broad scope of the organisation practices is noted by their previous merger of Abu Dhabi Marine Operating Company (ADMA-OPCO) and the Zakum Development Company (ZADCO). Also, the organisation pursue a strategic partnership with organisations including CEPSA, OMV, ENI ExxonMobil, ONGC/Falcon, INPEX/JODCO and TOTAL mandated to unlock substantial organisation value. The different costs are in an optimized practice with optimum value gained from the resources and infrastructure which is offered.
ADNOC current successful practice is guided by their capacity to operate a relevant global commercial strategy. For instance, ADNOC (2022a) argue that the ADNOC Global Commercial Strategy entail prioritising on an outstanding service for their clients while stretching margin from all barrels of oil produced, refined and traded.
1.2 Supply Chain Selected
The ADNOC company’s Sourcing of Solar Panels expense category was chosen as the focus of this report’s supply chain analysis. Expenditure categories at ADNOC include IT, health and safety, transportation, logistics, and facilities management, all of which use separate supply chains. They use a suitable tier-based supply chain for the designated budget line item. Schorpp et al. (2018) provide evidence that a tiered supply chain entails a method taken to manage suppliers in different tiers affected by the supply chain’s significance. Manufacturers’ (OEMs’) involvement in determining performance range is important because of the importance of their customers and the necessity of providing them with high-quality solar panels. According to Sarkis et al. (2019), a tiered supply chain is useful because it allows companies to take advantage of reduced commercial ties among management teams and gives greater weight to an acceptable timescale for putting the sourcing strategy into action.
There is a greater chance of a company implementing a long-term-oriented supplier growth strategy in the tiered supply chain that ADNOC has implemented. The overall procurement strategy’s performance and tactics benefit from this enhancement. The goal of the entire transaction procedure is to guarantee that the OEM in question is the one depicted in Figure 2;
Figure 2:ADNOC Procurement Supply Chain Map
The importance of the supply chain is informed by the following;
Customers (End-users)-Solar panel specs must be explicit to meet customer needs; hence, getting input from actual end-users to develop these requirements is important. They also ensure that they are regulating service providers and other interested parties.
Procurement and Supply Chain Department (PS&M)-Tendering, agreement-making, strategy-supporting contract development, coordination, and communication are all part of the procurement and supply-management process.
Authorisation of payments-Payment authorisation is handled by the ADNOC accounts and finance group using call-off orders communicated to service providers.
Health, Safety, and Environment (HSE) Factors–It is crucial for the solar panels supplied by ADNOC to conform to specified specifications HSE, especially in the upgraded COVID-19 version.
Legal Standards-This factor is important for determining the scope of any mentioned claim or legal difficulties.
2.0 Market Changes Impact on Supply Chain
CIPS (2022) demonstrates how external influences significantly affect supply chain sustainability. The external factors, trends, and tactics are analyzed to identify potential growth regions and points of opportunity. PESTLE (Perera, 2017) and Porter’s Five Forces (Baxter, 2019) are two possible frameworks for study.
2.1 Porter’s 5 Forces Analysis
Isabelle et al. (2020) demonstrates how this method may analyze various supply chain elements. In the case of solar panels, this strategy is commensurate with the potential to capitalize on a market niche. Figure 3 depicts the results of Porter’s 5 Forces study of the solar panels spending category’s supply chain.
Figure 3:Porter’s 5 Forces Analysis for ADNOC Organisation
Supply chain competitiveness is illustrated in Figure 3 from Porter’s 5 Forces Analysis. For instance, ADNOC’s supply chain tiers affect the level of modernisation, which in turn affects switch costs, the COVID-19 epidemic, and the resulting growth in energy demand. Therefore, to have a successful supply chain, ADNOC needs to implement a well-defined strategy that pinpoints its suppliers, increases output and usability (for the benefit of staff), and disseminates information about solar materials and solar panel specs.
ADNOC, a supplier with medium-level power, sets the standard for high-quality solar panels. This way, concerns affecting the supply chain influenced by raw materials and OEMs were included. Since new competitors pose such a serious danger, observing how similar businesses have implemented supply chain management may be beneficial. COVID-19’s epidemic proportions are one factor motivating them to simplify their integration.
2.2 STEEPLED Tool Analysis
When developing a long-term strategy, many companies turn to STEEPLED analysis (CIPS, 2022). The goal is to identify, rank, categorise, and keep tabs on all potential dangers from the outside world. This is done by considering the following factors (summarised in Table 1): social, technological, economic, environmental, political, legislative, ethical, and demographic.
Table 1:STEEPLED Factors Analysis
Table 1 shows that ADNOC’s operations would benefit from a greater emphasis on cultural sensitivity and consumer preference adjustments. The supply chain must effectively incorporate the use of technological and informational systems. Leite et al. (2020) show that the COVID-19 epidemic has had a favorable effect on the demand for technology and the investment made by businesses in their supply chain. On the other hand, the supply chain’s access to raw materials and the focus concerns directly affect the supply chain’s ethical values, affecting the process’s secrecy and the necessity of embracing equality. By using an online procurement method that guarantees a supply chain equity level, ADNOC gives top priority to handling these ethical difficulties in its supply chain.
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