“HOW BP GREASE TS MACHINERY FOR FRICTIONLESS SOURCING”

SUBMITTED BY:
ROOPESH P V
3RD SEM MBA
WHAT ARE THE FUNCTIONS OF A TRADITIONAL IPO AND SPECIFICALLY OF THE IPO WITHIN
BP’S OPERATION?

An international procurement office in Shanghai, which served as a shared service

Centre for internal customer
The IPO had been sourcing mainly non-hydrocarbon goods and services, such as
manufacturing equipment
Drilling services and well completion services .
BP was one of the world’s largest energy companies ,providing its customers with fuel
for transportation
BPs main functions could be classified they are:
Findings oil and gas
Moving oil and gas
Extracting oil and gas
Making fuel and fuel products
Selling fuel and fuel products
Generating low carbon energy
WHAT ARE THE ADVANTAGES AND DISADVANTAGES OF THE CHINA MARKET FOR
BP

Advantages Disadvantages

To support the company’s ongoing BP was not just focusing on a savings

growth needs in china. target.

To unlock the potential value The IPO protecting issue

from Chinese sourcing by
offering a variety of services

Procurement of supply chain Shortage of qualifies local

management capability procurement
development ,market research
intelligence, cost modeling
 3) WHAT ARE THE PROS AND CONS OF HAVING AN IPO AS A SHARED SERVICE CENTRE?
Pros
Assessing opportunities in the third party market place , the need to invest in PSCM
Assisting in executing PSCM plans
Monitoring and validating ongoing performance of the PSCM

Cons:

BP had become a very decentralized organization with no central procurement

No supply management functions.
Cost efficiency
4) What are the pros and cons of operating an IPO as a cost center?

Pros:
Low cost manufacturing
Tapping skills and resources that are not available in the home nation
Seeking the benefit of alternate suppliers
Cons:

No exposure of international culture, traditions and beliefs

Hidden costs related to different time zones and languages
Financial and political risks associated with emerging economies
5) What are the strength and weakness of configuration of current sourcing process? what
improvements can be made in order to assure quality?

STRATEGIC ORIENTATION:
manufacturing strategy
outsourcing strategy
Weakness:

The optimization strategies of lead time are not well defined

The focus is mainly on European markets instead on being orientated on Global
markets where future growth is expected
Outsourcing strategy for other processes and activities is not well defined

Improvements of in order to assure high quality :

Organize the quality circle
Track mistakes
Invest in training
 6) HOW DO YOU DEFINE QUALIT ? WHAT ABOUT SUPPLY CHAIN QUALITY
Quality has a pragmatic interpretation as the non-inferiority or superiority of something; it's
also defined as being suitable for its intended purpose while satisfying customer expectations.
Quality is a perceptual, conditional, and somewhat subjective attribute and may be understood
differently by different people

Supply chain quality

Supplier Quality Management (SQM) is the catalyst that all complex manufacturers look to in
controlling production costs, reducing variances, and enabling compliance to quality standards.
Faced with these constraints, complex manufacturers turn to for Supplier Quality Management
expertise in discrete, complex manufacturing.
 7) What motivational factors can be deployed in order to encourage supplier quality?
One of the best ways to assure the supplier understands your requirements, as well as to
initiate working together on clarifying those requirements, is to use some form of what is
called Quality Function Deployment (QFD). In simple terms, you meet with key supplier
personnel from the various disciplines to define, discuss, and clarify your requirements.
 8) WHAT IS DIFFERENT BETWEEN DIRECT MATERIAL AND INDIRECT MATERIALS?

WHICH CATEGORY IS EASIER SOURCE

Direct material are those material which are easily identified, conveniently measured
and directly charged to the cost of production. It is also part of the finished product.
example of direct materials are Timber in cases of furniture making, Leather in case of
shoe making, cotton in case of shirt making etc.

Indirect Material are those materials which cannot be conveniently identified &
allocated to the cost centre or cost unit. It does also not form part of the finished
product. Example of indirect material are bottom in case of shirt making, Thread in
case of shirt making, pin & paste in case of furniture making etc.