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(Solution) CIPS ADNOC Module: Global Strategic Supply Chain Management APGSS

This business report has been prepared to evaluate the global strategic approach to managing organisation supply chain. The organisation of focus is Abu Dhabi National Oil Company (ADNOC) operating in United Arab Emirates (UAE) oil and gas sector. In this highly competitive business environment, management of the supply chain is instrumental.

To achieve the intended aim of this report, the area of focus in evaluation included impact of market changes on the supply chain, sustainable global sourcing decisions, strategic logistical implications of globalisations and impact of supply chain management on corporate performance.

This has been enabled by referencing on various CIPS module notes models including SWOT, STEEPLED, Mendelow Matrix, Kraljic Matrix and Porter’s 5 Forces among others. Further, apart from the desk research available in ADNOC, secondary research has similarly been pursued.

The findings in this report evidence that market changes impact on the supply chain are influenced by the internal and external factors in the business environment.

Also, the findings indicate that sustainable global sourcing decisions impact the social, ethical and environment performance in selection of their suppliers. For ADNOC, priority is given to corporate social responsibility, responsible procurement and environment procurement. The strategical logistical implications of globalisation have been linked to inventory holdings, international logistics strategies, extending transport pipeline and multi-modal transportation.

From the findings in this business report, various gaps have been identified which can be managed through implementation of the following recommendations;

  • Invest in collaboration, networking and technology for sustainable supply chain
  • Improving supply chain development by providing capacity development for PS&M teams
  • Holistic inclusion of stakeholders in conflicts management
  • To include all tiers of supply chain for success in globalisation to manage all risks and performance challenges

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Description

Solution

1.0 Introduction

1.1 Organisation Background (ADNOC)

Abu Dhabi National Oil Company (ADNOC) is a UAE based organisation which has been in operations since 1971 owned fully by the government. As evidenced in ADNOC (2023) the organisation has a network of holistically integrated businesses operating in the entire energy value chain. This assist the organisation to responsibly achieve requirements in their continuously changing energy market. The organisation is a leader (top tier) of low level carbon intensity oil and gas producer globally and pursuing significant phases in ensuring current energy is clean while at the same time having investments for future energy. Through their sustainable strategies in their value chain, the organisation is significantly strengthening their positioning in terms of reliability and responsibility as an international energy provider. As part of their global strategic approach to manage their supply chain, ADNOC has invested in $23 billion for advancing and accelerating their global supply chain network and corporate performance. This is in their ambition of achieving net zero emissions as of 2045. Based on this background information, this business repot intend to evaluate global strategic approach used in ADNOC for management of their supply chain.

1,.2 ADNOC Supply Chain

The supply chain strategy used in ADNOC is based on need for providing best services to their customers, effectively and less costly services while achieving in terms of environment, health and safety features. According to DFreight (2023), this is achieved while emphasising on stronger partners networks and vendors with a capacity of aiding long-term success and organisation operations. In summary, the organisation supply chain is guided by figure below components;

Figure 1:Summary of ADNOC Supply Chain Network Components

Source: Summarised from DFreight (2023)

In ADNOC, for their different categories of spend, they use varying supply chain depending on whether they ae looking for local (UAE), regional (MENA) or International suppliers. The selected supply chain is used in sourcing for their Information Technology (IT) systems used in the organisation. Since the organisation operates an upstream and downstream operations ADNOC (2024), they operate through the supplier tiering and network sourcing as explained in the CIPS Module Notes;

Figure 2:ADNOC Tiered Supply Chain Network

Source: CIPS Module Notes

As explained in the introduction of ADNOC supply chain network, the purpose is ensuring efficiency provision of their products and services in global market while also leveraging on strong relations with their suppliers and clients (DFreight, 2023). Hence, by leverage on the tiered supply chain network, it is possible to improve their commercial relationships and timely delivery for success of their sourcing strategy. The tiered supply chain is also identified in Sawik (2021) as harnessing prioritisation on long-term based suppliers development strategy.

2.0 Impact of Market Changes on the Supply Chain

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