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Expectations and key success factors Eddie Eide – Senior Procurement Advisor Draugen EPCm Project 14.10.2014.

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Presentation on theme: "Expectations and key success factors Eddie Eide – Senior Procurement Advisor Draugen EPCm Project 14.10.2014."— Presentation transcript:

1 Expectations and key success factors Eddie Eide – Senior Procurement Advisor Draugen EPCm Project

2 Company overview ■ Industry pioneer with over 100 years history ■ A leading service company within the oil, gas and renewable energy industry ■ Eight locations in Norway and four internationally ■ Aibel employees around 5,000 worldwide ■ Annual turnover in 2013 approximately 12 billion NOK

3 Company overview cont. ■ 50 % ownership in EMC (Egyptian Maintenance Company) ■ Long term maintenance and modifications contracts ■ Deliver new platforms and modules ■ Present on half of the offshore installations and 4 onshore terminals in Norway ■ Successfully entered into offshore wind market

4 Aibel locations Headquarter in Stavanger Yard in Haugesund Yard in Thailand

5 Aibel suppliers ■ Current status – our supplier database ■ Suppliers are key to Aibel - 2/3 or approx % of value creation is procured Huge influence on Aibel competitiveness

6 Purchases per county in Norway

7 NCS - Future expectations ■ Good potential for new large and small discoveries ■ Further optimization of the shelf ■ New installations under construction will provide new MMO contracts ■ Deferred maintenance and modifications will provide new employment ■ There will be industrial development in northern Norway ■ The industry has undergone continuous restructuring – we will succeed again!

8 Strategy and goals ■ Aibel has a leading position on the Norwegian continental shelf and aims to maintain this position ■ We aim to expand internationally ■ Need for cost reduction and increased efficiency - We reposition and make improvements ■ Integrated and cost effective execution model ■ Increased international interest in the implementation of our projects

9 Aibel, international share

10 What is important to us – and our clients ■ Delivery performance ■ Quality ■ Documentation ■ Solution provider, not (only) a supplier of goods and/or services ■ Cost awareness ■ Cost optimisation - The ability to be creative and proactive ■ Efficiency and productivity ■ Reputation ■ Flexibility ■ Key personnel

11 Main focus areas ■ Knowledge of specifications ■ Reliability in delivery ■ Quality in execution

12 Knowledge of specifications ■ Pay extra attention HSE & working environment ■ HSE requirements must be first priority in all projects ■ Our biggest customer, Statoil, have increased focus on working environment for maintenance ■ Offer according to specifications in inquiry ■ If supplier offer standard equipment – specify exceptions

13 Reliability in delivery Effects of delays are increased both in cost and schedule! Therefore: ■ Be ‘realistic’ regarding delivery time ■ You will be challenged – know your capabilities and the risks involved ■ Inform when in trouble ■ Do not expect to solve all problems – inform us and work to solve it ■ Give us the possibility to reduce the negative effects

14 Quality in execution ■ Use qualified sub-suppliers ■ Contractual demands / selected makes etc. ■ Ensure quality and expedite! ■ Use your quality system in project execution ■ Do it right the first time ■ Negative trend in ‘punch-items’ and ‘warranty issues’ ■ ‘Short-cuts’ on quality does not pay off

15 The key to success ■ Project deliverables ■ Quality ■ Schedule ■ Productivity ■ A winning culture ■ A good working environment

16 Areas of improvement Where suppliers can contribute: ■ Schedule – My Responsibility ■ Capability vs. capacity ■ Estimation and experience data ■ Commercial awareness ■ Cost optimisation ■ Continuous improvement

17 Success areas ■ Open ■ Flexible ■ Solution oriented ■ Local presence and global capability ■ Tender execution ■ CIC capability and competence

18 Further expectations ■ Interaction with Aibel ■ Correct behavior - attitudes ■ Training - knowledge of the requirements and compliance ■ Management commitment at all levels ■ Safety in the value chain ■ Employee participation - risk assessment ■ Focus on major accident risk ■ Focus on groups at risk ■ Notification and follow-up of incidents and illnesses

19 HSE, Compliance and Quality

20 Health, safety and environment  Zero injury philosophy  Specific KPIs for HSE  Lost time incidents  Total recorded injury rate  Serious injury rates  Sick leave  HSE programme developed yearly  Action plan for overall activities  Local action plans tailored for each location

21 Quality ■ An important goal for Aibel is to deliver consistent and correct quality for all our projects. ■ Through our management system W3, we ensure that we always use our best practice for the execution of projects and work. ■ The management system fulfills the requirements of the following standards and directive: ■ ISO 9001: Quality management systems ■ ISO 14001: Environmental management systems ■ BS OHSAS 18001: Occupational health and safety management system ■ Pressure equipment directive 97/23/EC module H ■ ISO : Fusion welding ■ ISPS: International code for the security of ships and of port facilities

22 Compliance ■ Many years of experience in developing and living up to high business compliance and ethical standards ■ Implemented new methods and systems in recent years to ensure a highly compliant and ethical business conduct (Code of Conduct)

23 Procurement Method

24 Method  As it is vital to get:  the right material  in the right quality  to the right site  at the right time  at the lowest total cost Procurement is a key for success in all our projects.  Overall method  ProVision is the standard method for start-up, execution and close-out of projects.  Procurement process  Visualized in W3 and includes all relevant procurement procedures, templates and method descriptions needed for procurement in a project.

25 Tools  Aibel SAP or customers ERP (Enterprice Resource Planning):  The Material Management module in SAP  Reservations (qty, specifications, need dates, status)  Purchase Orders (PO)  Reports (status, commitments)  Achilles – database for relevant suppliers  Procurement Corporate Frame Agreements - database  New Vendor Request - database  Proarc – document control system Procurement Toolbox

26 Documentation requirements  Attached to an inquiery you will find a typical example of Supplier Documentation Requirement List (SDRL) showing documentation and data tables to be submitted with the bid and as a part of the PO-delivery.  Read this carefully and calculate the costs assosiated.  Invest the necessary resources to deliver the documentation according to the contract.  Documentation is 50% of the delivery!

27 How to become a supplier to Aibel and Shell: Step 2: Mail regarding “New Vendor Request” will be issued from Aibel asking for Address information  Ownership information  Initial Contact Information  Payment information  Aibel will evaluate and check / approve information  Aibel to perform verification of received information  Close / check any gap – go or no go  NB: Aibel use Achilles as the basis of “Approved Vendor List” and has it own area where vendor information is available – Achilles is a “key” to be approved! Achilles registration!

28 Step 3: How to become a supplier to Aibel : Aibel`s Supplier Qualification Process consist of a “questionnaire” asking for info on:  Management and leadership, information and analysis, strategic planning, human resources, process management, business improvements and operational results, customer focus and satisfaction, supply management and HES.  Aibel will evaluate and score completed form  Verification of received information (visit)  Close any gap – go or no go

29 Prequalification levels if approved

30 Supplier Quality Management after approved  Supplier verifications/audits is performed, also based on “Key Performance Indicators”  Supplier approval and re-approval  Maintenance of Aibel Approved Vendor List (Achilles)  Key performance indicators is established and shared with supplier`s to agree if any corrective action is required on one or both sides to improve performance.  Non Conformance system in place

31 Typical findings at new suppliers Missing or insufficient:  HSE thinking not according to expectations in the oil&gas industry  Presentation of organisation  Missing organisation chart  Diffuse responsibility  Systems for reporting of injury and sick leave  Target for TRIF factor and strategy to keep low  Total Recordably Injury frequency  Number of injuries x 1 mill mhr / actual mhr  Risk management systems

32 Typical findings at new suppliers  Verification and Audit systems for subcontractors ■ Systems to satisfy Norsok S-006 ■ Risk management of working environment ■ Treatment of nonconformance ■ Monitoring of ability to deliver, quality cost, ”on time delivery” etc ■ Documentation of prosesses and results of these ■ Systems for high ethics standard ■ Capacity and competence to handle complex systems ■ Engineering ■ Planning ■ Financial

33 Summary  What to remember  Aibel use only Achilles approved suppliers who are also Aibel approved.  Aibel has an open approach regarding co-operation and new vendors.  Aibel will keep “find contracts” updated to reflect current opportunities.  All vendors to Draugen must be TA (Technically Approved) by Shell.

34 © 2008


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