Solution

Executive Summary

This assessment focuses on creating a category plan. This is targeted for the facilitates management category in Oman LNG LLC organisation. Further, part of the focus has been on evaluating the various challenges and their solutions as part of the implementation plan. In an organisation, developing an appropriate category plan has been noted to have a positive implication on value maximisation of their operations, mitigating potential risks and management of goods and services provision. To guide the category plan process of development, an in-depth internal and external analysis has been carried out. The tools which have been selected for evaluation include SWOT, STEEPLED, Mendelow, Cater’s 10Cs and Christopher 4P’s  model. In CIPS, there are a total of 6 stages which can be prioritised in implementation of the category plan. From the analysis, it is evident that the most appropriate category plan need to integrate the interests of all stakeholders, prioritise on their needs and mitigate any misunderstandings prevalence.  As part of the implementation plan of facilitates management category of spend, the challenges have been identified as inclusive of inexistence of rational decision making, lack of facts and data with limited embrace of innovativeness and technology in the process.

In line with the findings of this report, there are various recommendations which have been provided including;

• To initiate a strategic supplier relationship management by modernising the procurement and supply chain operations
• Digitise their current procurement and supply process as part of the category plan to avoid the existing Oman LNG LLC organisation
• By promoting consistency, they would engage all stakeholders to appreciate their distinct needs and integrating them in the process
• To establish the best decision to be made in organisation category plan informed by facts and existing data
• To offer appropriate chances which target procurement department to harness capacity development for success in their category plan

Table of Contents

1.0 Introduction.. 4

1.1 Organisaton Background. 4

1.2 Facilities Management Category of Spend. 5

1.3 Category Planning. 5

2.0 Stakeholders Analysis. 6

3.0 Current Situation.. 8

3.1 Internal Analysis 8

3.1.1 Suppliers Positioning. 9

3.1.2 Suppliers Preferencing Matrix. 12

3.2 External Analysis. 13

Micro and Macro Analysis. 13

3.2.1 Porter’s 5 Forces. 14

3.2.2 Industry Life Cycle. 14

3.2.3 Agile-Martin Christopher 4R’s. 15

3.2.4 STEEPLE Analysis. 16

4.0 Sourcing Approaches. 17

5.0 Category Planning Implementation, Challenges and Solutions. 18

5.1 Creating a Customer-Centric Plan. 18

5.2 Evaluation and monitoring category plan. 18

5.3 Defining categories, improvement and enhancement. 19

6.0 Conclusions and Recommendations. 19

6.1 Conclusion. 19

6.2 Recommendations. 19

References. 21

Appendices. 23

Appendix 1: Cater’s 10C’s for Supplier Selection. 23

Appendix 2: Risk Register. 23

Appendix 3: RACI Matrix. 23

Figure 1:Procurement process by Oman LNG Organisation. 4

Figure 2:Category Planning Steps. 6

Figure 3:Mendelow Matrix Stakeholders Analysis. 7

Figure 4:Peter Block Grid Leadership Center Model 8

Figure 5:Facilities Management by Oman LNG graphical representation. 9

Figure 6:Kraljic Matrix Tool Analysis. 10

Figure 7:Pareto Principle Rule. 12

Figure 8:Pareto Principle Rule. 13

Figure 9:Porter’s 5 Forces Analysis Tool 14

Figure 10:CIPS Guidance on Industry Lifecycle. 15

Figure 11:Agile Martin Christopher’s 4R’s 16

Figure 12:Summary of SWOT Analysis. 18

Table 1:Spend Volume and specifications. 10

Table 2:Facilities management providers in Oman LNG.. 12

Table 3:STEEPLE Analysis. 17

1.0 Introduction

1.1 Organisation Background

Oman Liquefied Natural Gas LLC (Oman LNG) operates as a joint venture in Oman. As evidenced in Oman LNG (2022), this was as a result of Royal Decree in 1994 with their practice being in tandem with legislations and policies initiated by Sultanate of Oman. The scope of their operations is  processing and selling Liquefied Natural Gas (LNG) with their products being generally classified as the Natural Gas Liquids (NGLs). Due to their immense practices in the active organisation operations, they currently have 3 liquefaction characteristics in their site in Qalhat near Sur with their capacity inclusive of production of 10.4 million tonnes every year (mtpa). Other than the organisation leading in oil and gas industry, they similarly make a significant input in the Oman Government main objectives intended for promoting their economy diversification. Further, Oman LNG liquefaction plant is strategically positioned in Coast of South Shargiyah governorate, and their head office being based in Muscat.

Additionally, Oman LNG tend to follow a competitive tendering strategy. This is with their situations allowing procurement of demanded goods and services. In order to achieve the organisation purpose, they follow the procurement and tendering process as illustrated in figure 1;

Figure 1:Procurement process by Oman LNG Organisation

By leveraging on the application of iSourcing strategy, the organisation is appropriately positioned in establishing a framework in the form of a web browser required for promoting the transaction process of entire orders offered. This is pursued through a holistic adherence to the Oman ICV content which ensures that the citizens are the preference in being offered with procurement and supply operations. The uniqueness of this is the Oman LNG being appropriately positioned in involving various suppliers upon demonstrating the capacity to delivery scope of embracing creativity, increased quality and obtained products and services.

1.2 Facilities Management Category of Spend

This assessment has opted for facilities management category of spend. In Oman LNG onshore and offshore operations, they sources different facilities for the organisation active operations. In specific, Oman LNG organisation operates facilities for degasifying liquefied natural gas (LNG) shipped in by LNG tanker from the production zones. This is supported by Market Data (2021) report which note that the organisations facilities ensures that they achieve an LNG production capacity of 7.1Mtpa (Million Tons per Annum) projected to increase with 8.1Mtp as of 2030. In this case, due to the significance of the facilities for the success of the organisation operations, facilities management has achieved upto 65% increase since the year 2019. Therefore, the identified spend category is essential for pursuing category planning to guide procurement and suppliers selected. Failure of embrace of an effective selection can be cost-intensive and immense time spent in the entity. Hence, as evidenced in Mantrala and Kamran-Disfani (2018) the category planning ensures that the entire procurement management is appropriately streamlined. This is for assisting attainment of organisation goals with purpose and ensuring procurement is well managed. In the CIPS notes, this is noted to harness the supply chain management to boost innovativeness in different organisation categories in this case facilities management.

1.3 Category Planning

Adopting the CIPS (2021) definition, category planning represent a strategic approach of procurement and supply management (PS&M). This is by the organisation segmenting their spend into distinct areas inclusive of similar or linked products. This is for allowing an increased focus on categories which possess opportunities to consolidate and efficient implementation. The importance of category plan is identified in Ugriumova and Skoglund (2019) as offering an appropriate roadmap on the extent in which entities pursue and attain organisation goals of a category management. As evidenced in the CIPS Notes, the different phases followed in category plan are as illustrated in figure 2;

Figure 2:Category Planning Steps

As illustrated in figure 2, through a prioritisation of the noted steps, in this assessment, it intend to establish a category plan for Facilities Management category in Oman LNG organisation. This report will also evaluate on the implementation plan and note various challenges incurred and best solutions for these challenges.

2.0 Stakeholders Analysis

As defined by CIPS (2021a) the stakeholders represent individuals/organisations which have an interest in or can be impacted by a project, product, service or a venture. In category plan development, identifying the interest and influence of the stakeholders impact its success. Oman LNG stakeholders analysis is as illustrated in figure 3;

Figure 3:Mendelow Matrix Stakeholders Analysis

Low Influence, Low Interest– For the organisations operating in oil and gas sector in Oman, the capacity development teams, and their customers have less influence and interest in category planning development.

High Influence, Low Interest– The accounting teams, lawyers of the organisation and regulators have a high influence on the category plan. In the different facilities, the contracts signing would require their input. This is with holistically adhering to regulations.

High Influence, High Interest– The PS&M department, technicians and the tenants are actively involved in the category plan. Its success is dependent on their input.

Low Influence, High Interest– The HR management and also Oman Board of management in hierarchy structure influence how the plan is developed. They offer the facilitation of the process implementation holistically.

Further, in regard to the strategy followed to classify their stakeholders as illustrated in figure 4, they can be further be segmented by using Peter Block Grid Leadership Center Model (Johnson & Hackman, 2018).

Figure 4:Peter Block Grid Leadership Center Model

In summary, as illustrated in figure 4, as part of category plan, the identified stakeholders would have to be actively made aware of the process through an active communication. This is for the Bedfellows with the Allies offered with maximum facilitation and support in actualising vision and its achievement. Further, the opponents would be offered with consistent updates, gaining their feedbacks, honesty embraced while the adversaries make sure they note on the hardest decision which is made on category plan and its success.

3.0 Current Situation

3.1 Internal Analysis

In order to evaluate purchasing and supply practice in Oman LNG, the analysis ensures appropriate evaluation of specification set by Oman LNG, sourced volume, forecasting and spend categories. Adopting the definition of CIPS (2022), the specifications in procurement and supply identify the needs or the requirements by the buyer. This is through the description of the goods and services of a supplier is required to supply in the lifetime of a contract. Taking into account of the Oman LNG facilities management procurement, the volume of spend are as shown in table a summary;

Table 1:Spend Volume and specifications

Additionally, for noting the trend in the spend category, a graph representation is applicable (see figure 5)

Figure 5:Facilities Management by Oman LNG graphical representation

Albeit the implications of the COVID-19 which have significantly impacted Oman LNG facilities operations, the popularity of this category of spend has remained popular. This is evidenced by 2022 increased procurement value despite of the reduced value of sourcing in 2021.

3.1.1 Suppliers Positioning

As evidenced in table 1 and figure 4 on the different sub-categories of spend by Oman LNG, it is evidently clear that the category is important for the organisation. To link the relevance of category of spend with the category plan to be developed, Kraljic Matrix Analysis is applicable (see figure 6). According to CIPS (2022a), the Kraljic matrix is identified as a tool used by suppliers professionals in establishing risks and setting appropriate measures for minimising the risks.

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Figure 6:Kraljic Matrix Tool Analysis

Considering the facilities management spend category, they can be appropriately classified as leverage items. In Oman, the facilities and tenants available for leasing their properties are multiple which occasion the high competition amongst them. According to Adame and Markling (2018), amidst the high competition amongst the suppliers of the facilities influence on the organisation ability to establish an appropriate category plan for negotiations. This is by appropriately communicating with all partners contrary to maintaining a stand-alone procurement approach.

Additionally, in both onshore and offshore of Oman LNG operations, multiple facilities are procured offered by tenants. Hence, the spend value is high value hence the need for engaging multiple suppliers. This is for monitoring their purchasing power which is attained by the category plan improvement through an effective standardisation of the purchase demands and needs. For the Oman facilities management suppliers, they are as summarised in table 2;

Table 2:Facilities management providers in Oman LNG

As part of the category plan, Oman LNG relations with their suppliers is very strong harnessing he customer value and trust-based relations, actively collaborating with each other while embracing technologies. To evidence this relationship, Pareto Analysis 80/20 rule CIPS (2022b) is applicable (see figure 7).

Figure 7:Pareto Principle Rule

For the Oman LNG category plan, the use of the praetor diagram evidence their relations with suppliers. This note that for the 20% efforts input by Oman LNG, it leads to involvement of 80% of their suppliers with good value for money outcomes.

3.1.2 Suppliers Preferencing Matrix

In CIPS (2022c), the supplier preferencing is defined by the manner in which understanding of the extent in which the suppliers see the relationships with buyer. This can include being core to the business or mere nuisance (see figure 8);

Figure 8:Pareto Principle Rule

Nuisance Quadrant– Most of the suppliers do not rank Oman LNG to this category. The organisation always put efforts in ensuring sustainability of their relationships and for attracting them.

Exploitation Quadrant– For the different facilities management companies, particularly the tenants, they value dealing with Oman LNG as the organisation is government owned. Governments are the best buyers.

Development Quadrant– After COVID-19 pandemic where Oman LNG lowered the amount budgeted for different facilities, most of the suppliers view them as developing. The organisation is noted as having further potential.

Core Business Quadrant– Majority of the suppliers value facilities management sourcing by Oman LNG as core in their business operations. Their interests are prioritised as part of procurement.

3.2 External Analysis

Micro and Macro Analysis

In developing a category plan, identifying relevant opportunities is important. According to Kritchanchai et al. (2019) this impact on noting entire needs, future strategies, external market environment, trends and overall dynamics. This is with full opportunities leveraged and developed effectively. The relevant tools are Porters 5 Forces, Industry Life Cycle and the STEEPLE tools.

3.2.1 Porter’s 5 Forces

This tool is noted in Bruijl and Gerard (2018) as guiding an evaluation of the importance of the sourcing plan in category plan implementation. The rationale of this is that onshore and offshore facilities are instrumental for the organisation market dominance, lowering operation costs and practices. The summary of the tool is as shown in figure 9;

Figure 9:Porter’s 5 Forces Analysis Tool

As evidenced in figure 8, Porters’ 5 Forces Analysis highlight on the scope of leverage on competitive advantage in their business environment change. A case example is where for improving their relationship with stakeholders which is at maturity phase need to integrate the use of modern tools with other issues such as COVID-19 pandemic being appropriately controlled. The rationale of this is that Oman LNG has a high power as a buyer, not many threats of substitutes, power of suppliers being at a medium but threats of new entrants being very high. The competition is similarly high informed by market maturity and increasing the overall demand.

3.2.2 Industry Life Cycle

In CIPS Module notes, the industry lifecycle is identified as offering a guidance on level of contracts, service level agreements. For instance, in Oman LNG facilities management, this can entail application of data amongst the suppliers and sourcing appropriate products which limited the possibility of indulging in unplanned purchasing. The industry lifecycle is as illustrated in figure 9;

Figure 10:CIPS Guidance on Industry Lifecycle

To improve the industry lifecycle maturity, in category planning, the various trends of modernisation are important for success of the category management and managing issues with costs overruns, loss of finances and failure of modernising their procurement. In the facilities management spend category, due to their ranking as maturity phase, appropriate category plan has a potential of increasing the efficiency, records maintained, and stakeholders holistically satisfied. The market share and costs have a potential of guiding successful entity practices. To summarise, putting into account of the industry lifecycle. The facilities management category management sourcing plan would influence benchmarking, errors reduced, suppliers onboarding and collaboration.

3.2.3 Agile-Martin Christopher 4R’s

For Oman LNG leverage on strategic sourcing, the most appropriate category plan is noted in CIOPS Model notes as Martin Christopher 4R’s (Madhani, 2020). This focuses on the aspects of responsive, reliability, resilience, and relationships as illustrated in figure 11;

Figure 11:Agile Martin Christopher’s 4R’s

Hence, as shown in figure 11, to achieve the identified stipulations of a strategic sourcing, there would be a need to optimise supply chain, reducing product life cycle and mitigating all challenges is essential. This increase the positivity of the suppliers relationships within the noted category of spend and eliminate all issues at hand. This promote the scope of suppliers and buyers relationships in this spend category with cost overruns reduced.

3.2.4 STEEPLE Analysis

This is a micro analysis tool identified in CIPS (2022d) as inclusive of a strategic planning as relevant to discover, evaluate, organize and track overall risks in business environment. The summary of STEEPLE analysis is as illustrated in table 3;

Table 3:STEEPLE Analysis

In table 3 summary, in Oman LNG category planning, their scope of accommodation of preference change of their clients and embrace on cultural diversity is instrumental. This is while integrating technology and information growth in entities most appropriate strategy. According to Ogunnusi et al. (2020), the prevalence of COVID-19 pandemic affect the extent in which the facilities management are sourced and the fully resumption of business leading to a significant surge in their overall demand.

4.0 Sourcing Approaches

In the development of a category plan,..

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