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Solution
Selected Topic:
Introduction of 3-D Printing in the Spare Parts Supply Chain in ADNOC
Table of Contents
1.1 Project Title (Key Terms) 4
2.1 ADNOC Organisation Background. 6
2.2 Why this Project Management Matters; Objectives. 8
2.2.1 ADNOC Procurement Supply Chain Management. 11
3.0 CHAPTER 3: CURRENT SITUATION. 14
3.1 Ariba as ADNOC existing E-Procurement System.. 14
3.2 Automation of Procurement Process in ADNOC. 17
3.5 Risks and their Mitigation. 23
4.0 CHAPTER: WORK UNDERTAKEN.. 24
4.2.1 Stakeholders Management 25
4.2.2 Impact of 3D Printing implementation in Spare Parts Supply Chain in ADNOC. 28
4.2.2 Project Implementation of 3-D Printing in the Spare Parts Supply Chain in ADNOC. 29
4.2.3 Sustainability of 3D Printing in Spare Parts Supply Chain. 30
4.2.4 Technologies available and Relevance in Implementation of 3D Printing. 31
5.0 CHAPTER 5 ANALYSIS INTERPRETATIONS AND CONCLUSIONS. 33
5.2 Project Implementation of 3-D Printing in the Spare Parts Supply Chain in ADNOC. 36
5.3 Technologies available and Relevance in Implementation of 3D Printing. 38
5.4 Project Implementation Process. 39
Figure 1:PS&M in ADNOC Phases. 6
Figure 2:ADNOC Organisation Structure. 9
Figure 3:Different Factors which Inform need for Change. 10
Figure 4:Balogun and Hope Model Components Summary. 11
Figure 5:5 Rights of Procurement in ADNOC Sourcing of Spare Parts. 13
Figure 6:Ilustration of Matrix Structure. 14
Figure 7:ADNOC Procurement Cycle Stages. 15
Figure 8:Areas of improvement of Procurement by digital technology practices. 17
Figure 10:Industry 4.0 as part of 3D Printing implementation. 22
Figure 11:Porter’s 5 Forces Analysus. 23
Figure 12:Complexity analysis using Kraljic Matrix. 24
Figure 13:Potential risks areas and mitigation measures summary. 25
Figure 14:Challenges of successful 3D Printing Successful Implementation. 29
Figure 15:3D Printing implementation impact 30
Figure 16:Considerations on management costs and demand forecast of 3D Printing implementation 31
Figure 17:Impact of 3D printing on Sustainability of Spare Parts Supply Chain in ADNOC. 32
Figure 18:Impact of 3D Printing technology on ADNOC Spare Parts Procurement 34
Figure 19:Barriers of 3D Printing implementation. 35
Figure 20:Stakeholders Mapping strategy. 36
Figure 21:Mendelow Stakeholders Analysis Summary. 37
Figure 22:John Kotter 8 Stages of Change Strategy. 41
Figure 23:Tuckman’s Team Development model 42
Figure 24:Belbin Team Roles Summary. 43
Table 1:Risk register of the identified risks of the project 26
Table 2:A summary detailing different respondents data. 28
Table 3:Summary of STEEPLE Analysis. 39
CHAPTER 1: INTRODUCTION
1.1 Project Title (Key Terms)
In procurement and supply management (PS&M) in modern business environment, modernisation of their operations is core to invest on technologies for improving efficiencies and costs management. In particular, for Abu Dhabi National Oil Company (ADNOC) operating in oil and gas industry, this is essential for enhancing an improved exploration of both offshore and onshore operations. According to ADNOC (2024) through a leverage on onshore and offshore operations, an increase in suppliers and stakeholders to facilitate success in their operations is achieved. Therefore, embrace of modernised technology and innovativeness is core for ADNOC success in their practice. Albeit of ADNOC having already operating a commercial directory with streamlined suppliers registration, sourcing, procurement and accounts payable, they have not invested in 3D printing which is a core area of Industry 4.0 technologies (Olsson et al., 2021). Through an investment in 3D printing, ADNOC would be in a position of in detail prioritise on a holist competitive advantage and overall dominance in their sector. The outcome of this is to ensure best quality, timely basis and appropriate location. Today, in ADNOC commercial directory, their procurement activities are as summarised in below steps;
Source: CIPS Module notes
In figure 1 summary, by pursuing 3D Printing, there is a possibility for ADNOC to harness development of various categories and management of spend categories. Additionally, for achieving transactional procurement and procure-to-pay strategies, the priority would be on material demand and replenish requisition strategy to engage suppliers, eliminate repeated sourcing and trigger on-time pay post-delivery of provided goods and services. This is represented in first stage of establishing if they use insourcing or outsourcing strategy. The rationale of this is that in ADNOC, step 1 is lacking and could be introduced as a new option for the organisation.
Considering costings, embracing technologies including 3D Printing to enhance costs reduction with approximately 60% (CIPS, 2023). To optimise their strategies, 3D Printing and its use contribute to a holistic transformation to achieve service-based delivery approach. This is reflected in phase to intended to commoditise and enhanced analysis of spend.
Considering the various phases in figure 1, embracing technologies including 3D Printing has a positive impact in promoting a detailed, limited costs used, smart-oriented and respond to customer’s needs. In ADNOC case, despite of their online directory, they do not possess an appropriate system to pursue a detailed spend analysis important to aggregate, clean, classify and analyse the data provided by PS&M. For stage 3, scoring and assessment of performance capacity for suppliers, costs, flexibility and viability is core for success in their practices (Handfield et al., 2019). Therefore, based on this background information, this final report is titled “Introduction of 3-D Printing in the Spare Parts Supply Chain in ADNOC”. The result for this research would be instrumental for ADNOC to succeed in sourcing varying spend categories on time, quality and quantity. For instance, 3D Printing would be appropriate for executing the entire procurement activities as shown in figure 1 with end results being improved negotiation and contracts management.
Through an embrace of 3D printing, this can be used in enhancing e-gateway for commercial business strategy by including bidders, interactive level and responding to ADNOC tendering process (Ortega-Gras et al., 2021). The 3D printing would offer an appropriate opportunity to secure, simplify, pre-govern and efficiently enhance organisation tender management and leverage on web-based tools. By 3D printing being a core area of eProcurement, it is important for ADNOC stakeholders enhance issues management linked with accessing, delivering, hardcopies and input hence influencing contract management costs. Hence, it is important to evaluate the extent in which technologies used including 3D printing which contribute to an improved ability to leverage on competitive advantage and dominate UAE oil and gas sector locally, international and in MENA region.
1.2 Scope of this Report
Based on the assignment title of this report, an exploration of the 3D printing in the various sourcing practices is developed. The rationale of this is that for many years, ADNOC has been improving their investments in iSourcing and had been hesitant to embrace other superior systems including 3D Printing, Generative AI and other Industry 4.0 technologies. Therefore, through a holistic investment of 3D printing, the capacity for leveraging on competitive advantage and market dominance is achieved. Also, through an achievement of the scope of this report, PS&M dynamics are supposed to be prioritised. The ADNOC organisation contract management would end up aligning its operations with the external business environment and suppliers analysis holistic. The best choice is to modernise sourcing approaches which would be used with SMART recommendations provided.
Through an embrace of 3D printing, the scope of reduction of supply complexity, increased speed to market of product, reduced global implication and allowing remote locations for printing replacement parts. All these would enhance the organisation streamlining of their practices, efficiencies in contracts management with overall sourcing approaches modernised (Nicoletti & Nicoletti, 2020).
1.3 External Environment
In the process of completing this report, external environment would be prioritised to guide success in 3D printing integrated in sourcing strategy used by ADNOC organisation. This is supported by CIPS (2023a) identifying the factors of Volatile, Uncertainties, Complex and Ambiguous (VUCA) world which are critical for their operations. This is supported by the view that 3D printing as a core segment of the Industry 4.0 technologies inclusion in the process implementation. In the international business environment, existing reports highlight majority of modern organisations are increasingly investing in technology for spend analytics, eSourcing strategies, and eProcurement including eCatalogues and eInvoicing (CIPS, 2023b). The outcome of this is evidenced on the scope of organisations integrating products designing, marketing strategy and sales, sustainability of business strategy, increased market-level dominance and profits accrued.
CHAPTER 2: BACKGROUND
2.1 ADNOC Organisation Background
In this report, the organisation of focus is Abu Dhabi National Oil Company (ADNOC). This is for understanding the impact of contract terms and conditions on distribution of risk and power with their suppliers. This is an organisation which began its operation in 1971 and today is ranked as the leader in diversified energy group which is owned by Abu Dhabi Government (ADNOC, 2022). The organisation network of holistically integrated business has based their operations across the entire energy value chain assisting their capacity for meeting overall demands of the consistently changing energy markets. For remaining competitive, the organisation has allocated $15 billion for advancing and accelerating lower-carbon solutions, investment in new energy solutions and decarbonisation technologies for lowering their carbon intensity with 25% by 2030 and successfully facilitating their NetZero by 2050 target.
The company has a network of fully operational companies that operate throughout the entire hydrocarbon value chain, handling tasks including exploration, production, processing, storing, refinement, and supply in addition to manufacturing a wide range of petrochemical products.
I work as a Contract Engineer for ADNOC Offshore, one of the company’s divisions. The offshore division of ADNOC is responsible for the delivery and development of oil and gas resources in the waters surrounding Abu Dhabi. With OPEX and CAPEX, ADNOC Offshore spends over 3,000 million dollars annually. The organisation structure is as illustrated in figure 1;
Figure 2:ADNOC Organisation Structure
Source: ADNOC Internal documents
2.2 Why this Project Management Matters; Objectives
The purpose of this project is to introduce 3-D printing in spare parts supply chain in ADNOC. From a general context, automation of supply chain is popularly being pursued by different organisation as a strategy of managing market trends and local/international developments (Xu et al., 2021). To achieve this, the current project would evidence collaboration of different stakeholders with executives involved and engaging vendors in a strategic manner.
The main area of this project is investigating and later recommending initiatives and strategies for 3-D printing implementation in spare parts as part of Supply chain and PS&M departments. This is with a target to improve processes, standards and optimisation and to harness expenses with increased value since the process is significantly complex and demand immense specified regulations. In CIPS (2023) report, 3D printing is noted as assisting in reducing supply complexity, increased speed to the market of product, reduced global impact and allowing remote locations for printing replacement parts. These areas cumulatively would lead to increasing in integrating and centralised strategy.
In order to support the relevance of investing in 3D Printing as a change strategy, various approaches of change based on CIPD Guidelines would be prioritised. In lie with the following figure, areas of interest would entail environment, market factors, business, leader/employee behaviour/mindset and cultural imperative.
Figure 3:Different Factors which Inform need for Change
Source: CIPS Study Materials
In line with figure 3 summary, as part of ADNOC investment in 3D printing, they would be able to recognise the different environmental factors, market needs, business imperatives and culture change. Considering the Balogun and Hope Model (By, 2005), adoption of 3D Printing is categorised as incremental. Hence, for ADNOC, in process of implementing 3D printing, it would be essential to harness success in their adaptation and evolve successfully. The way the different practices are pursued is in a gradual manner as shown in the following;
Figure 4:Balogun and Hope Model Components Summary
Source: CIPS Module Notes
Additionally, for success of change, this is guided by view that PS&M strategies in ADNOC as summarised in background section are impacted by need for being efficient and timely making of decisions. This include evidencing the critical implication of revenues and costs management (Panfilova et al., 2020). The need for this investment is informed by the weakness noted by ADNOC using a procurement system which is not automated in sourcing of the spare parts. Their policy and procedure is not aligned with inefficiencies in collaboration with different stakeholders affected and their dominance in the oil and gas sector in UAE. Additionally, with ADNOC only using iSourcing (ADNOC, 2023), is not effective and is impacted by a set of challenges in terms of its support and strategic operation. ADNOC has failed in integrating automation or using different technologies which are more mature to accelerate/delve on value for improved efficiencies and planned manner. For ADNOC, the PS&M management operate with view that 70% of industrial leadership perceive transformation in supply chain as affecting competitiveness scope.
As a best strategy for ADNOC, in their operations in onshore and offshore, they are affected by issues in cost overruns, sourcing costs, delayed interaction and lack of active coordination of the sourcing strategy. Therefore, in 3D printing implementation, the results obtained are;
- Organisation success owing to remodelling of PS&M strategy, confident and capacity of spare parts sourcing, talent management and staff competency
- Improved relations with entire stakeholders (as explained in stakeholders matrix) improving overall organisation operations. 3-D printing would be an improvement from the current iSourcing hence success in technical and commercial-based evaluation
- Enhance an improvement and robust system and policy development to manage any potential gap in PS&M transformation
- Today, lower than 10% of ADNOC PS&M would be aligned to implementation of 3D printing and other modernisation strategies appropriate for the organisation
- Ensure development of new systems and policies which are appropriate for enhancing the current and future implementation of 3D printing and more modernised systems as a progress of their modernisation
Since ADNOC has been identified to be lacking a holistic system and policy of automation of their PS&M, this is a major gap in transforming their spare parts sourcing and enterprise-based automation. Today, sourcing of spare parts is currently noted as being in the infancy phase of development owing to the operations of ADNOC. Post COVID-19 pandemic, the demand for oil and gas industry has significantly increased with better opportunities for ADNOC. Therefore, a significant project which would be enhanced include enhancing sourcing partnerships with different stakeholders to increase strengths of their PS&M. Today, in ADNOC, lower than 15% of entire resources in PSM are used for successful implementation of automation of their sourcing of spare parts.
Additionally, in this project, as part of implementing the 3D printing, the priority would be to manage all the identified issues. This is with priority being on the resources utilisation, capacity development and people development. Therefore, in 3D printing implementation, the best practice would be in line with the 5 Rights of Procurement Approach (Lysons & Farrington, 2020). In the findings, 3D printing would be essential for success in their operations and defined by the various factors;
Figure 5:5 Rights of Procurement in ADNOC Sourcing of Spare Parts
Source: Summarised from CIPS Module Notes
Considering the different factors as evidenced in the 5 Rights of Procurement Model, it is important for ADNOC to work in collaboration with entire suppliers teams of their spare parts. The purpose of using 3D printing would be to improve how compatible they are, credibility, reliability and potential innovation and development. This is possible if the management in ADNOC are convinced on the relevance of this investment and consistently support it for sustainability.
2.2.1 ADNOC Procurement Supply Chain Management
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