I already made a project about this company - Aramco - here it is: They are also
ID: 327630 • Letter: I
Question
I already made a project about this company - Aramco -
here it is:
They are also in refining the oil and distributing it. Saudi Aramco is world's top exporter of crude oil and natural gas liquids.
There are two types of business units, Upstream and Downstream
Upstream:
Exploration
Oil production
Gas processing
Optimizing performance
Downstream:
In-Kingdom downstream
Global downstream
Converge polyols
Aramco Base Oils.
Their core business is production of essential energy resources and supplying crude oil globally They have several oil processing facilities. They are also proficienct in finding new oil and gas reserves. They provide Procurement & Logistics services.
Company Statement:
"To to become the world’s leading integrated energy and chemicals company in long run"
Mission & Vision
Mission:
Their mission is to remain committed to provide energy to the world and to maximize the value of the country's petroleum reserves for the benefit of the Kingdom's citizens
Vision:
Their commitment is to remain the world’s leader in the production of petroleum-based energy is complemented by their commitment to help solve a host of pressing issues. They believe in making a difference wherever they do business by investing in innovation and entrepreneurship, creating educational opportunities, powering economic progress, increasing environmental awareness, and working in partnership for energy sustainability.
Understanding the concepts of SCM and logistics in a broader framework:
Supply Chain refers to networks of different groups that work together and coordinate their actions to deliver a product to market. Logistics is about getting the right product, to the right customer, in the right quantity, in the right condition, at the right place, at the right time, and at the right cost.
Saudi Aramco's supply chain management team includes sourcing, logistics, and contracting specialists. They ensure highest standard in their operations. They have following departments:
Materials Procurement
Logistics
Contracting
Travel & Effects
Strategic Sourcing and Projects
?
Saudi Aramco has been working with various local and international entities to grow its supply chain ecosystem.
SWOT analysis
Strength:
Access to Low cost oil and gas assets.
High capacity of oil production.
High capacity of oil refining.
Expert in Downstream operations.
Use of advanced technology.
Weaknesses:
Mostly dependent on crude oil sales for profit.
Small downstream capacity.
Corporate Governance needs to be improved.
Opportunity
Increasing oil demand globally.
High price of crude oil.
Threat
Other countries venturing into exploration so more options available.
Increased focus on renewable sources of energy.
Gas supply crunch.
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This is the secound Assignment which is complement to the Assingment 1 :
Purpose :
To assess your understanding regarding the use of tools as well as digital marketing techniques for Aramco Company.
Action Items :
1 Explain the role of cloud computing, traceability, RFID and other ERP solutions as per your experience which you gained from this project.
2 Evaluate the effectiveness of E-Procurement and E-Auction.
3 Discuss the industry response towards the use of ICT and various tools discussed above.
4 Also analyze your business and process as per below points:
- Usability Modeling of ICT and other resources (UM)
a. Finding the optimal solution
b. Cost and Schedule Analysis
c. Recommending and Implementing the resources
- Web-enabled Supply Chains (WEB)
a. A Web-enabled Procurement System
b. A Web-enabled order tracking system
c. Warehouse Management System
d. Customer Relationship Management
*Project shouldbe based on the implementation of the e-supply chain and logistics in real world and requires summarizing, demonstrating, and the use and potential values of SCM and LOGISTICS for an organization.*
Explanation / Answer
The company discussed in the case is Saudi Aramco. They are a world leader in exporting crude oil and natural gas liquids. They have a well setup supply chain with has used latest technologies in re-engineering the value chain for creating better supplier and customer experiences and optimize their own performance.
1. Cloud computing helps in reducing the IT infrastructure, aids a platform assisted approach and helps in data visibility sand authenticity across all sections in the supply chain. Cloud computing helps in using a remote server and storage network which will help in processing and analyzing all data in a separate environment rather than a local one. The main benefit of cloud computing is the ease of transfer of data with regards to data storage, data tracking and enhanced visibility. For a supply chain complete visibility of materials, inventory and logistics is very important. Cloud computing systems helps in providing easy to use tracking systems which will ease the traceability of the shipments. To help in tracking the materials, RFID or other tags are used. The RFID tags helps in tracking the material using scanners and sharing of data using IoT devices during transit. The data from RFID is transfers to a local internet enabled system which can provide up to date information on the geo location and status of material.
2. E procurement and E auction is another change that has been observed and is growing in nature in the supply chain. Traditionally, to get an RFQ quote, vendors had to get the RFQ shared to them in mails or through hard copies. They would then take time to understand, analyze and share the prices. The shared prices would later be shared back to the company. The rates would then be compared and analyzed with regards to the market benchmark before sending the second round of rates to the shortlisted vendors. This would continue till an agreeable price was obtained. Then there would be negotiations and multiple rounds of discussion before the contract was finalized. To reduce the cycle time in procurement, e-solutions have been introduced. Using an E-procurement and E-auction system, the company only needs to share the RFQ on the platform. Interested vendors would apply and share the rates back in the platform within the given deadline. The rates would be auto analyzed and second round rates would be suggested basis the market rate data provided in the system. Procurement teams only need to approve and select the vendors to whom the second rates would be visible. All rate discussions would be online ensuring transparency and ease of use for all stakeholder. The major benefits would be significant reduction in cycle time, reduction in manual paperwork and analysis, ease of sending RFQ`s, ease of consolidating quotes and complete visibility of the process.
3. The petrochemical industry has gradually adapted itself to the use of ICT based technologies. When technological solutions were first made available, many vendors found it difficult to adapt to. But over time, the major entities have adapted their process to change as per the technological advances. Now a days even the shipping lines and banks are using systems like BOLERO and SWIFT for transfer of Bill of Lading and Letter of Credit. With blockchain and other new technologies coming up, every company wants to be first adapter of the technology and see a significant benefit in the supply chain. Traditional supply chain where manual coordination was highly important has slowly progressed to highly technology dependent supply chain.
4. Usability of ICT models
A. ICT systems have helped in optimizing the various processes in the supply chain. Right from procurement to warehousing and distribution ICT has provided a solution to address the growing needs and ease the operations. In Warehousing, the materials are now stored using optimized solutions provided by EWM – Extended Warehouse Management systems. They provide effective bin management solutions which helps in grouping of shipments as per type, customer and space utilization. For truck reporting at plant and warehouse, slot management systems have been used widely. They help in placing truck at the right moment ensuring that the truck cycle time within plant or warehouse is minimal. Even the opening of new warehouses are planned as per optimized models provided by network design models. ICT has helped in not only optimizing the supply chain but also reducing the losses and improving the effectiveness in the supply chain.
B. Cost and schedule analysis can be easily modelled using ICT solutions. Cost optimization and value analysis can be done using the ICT models. The value chain and production schedules have to be optimally derived to ensure the crude is properly used to get profit maximization. ICT has helped in providing the same. All major oil and gas companies across the world use schedule optimizers to run the plant and prepare production schedules.
C. ICT solutions now a days have systems which can analyze the supply chain and provide reports on the bottlenecks within the process. These bottlenecks may be hidden and may not be as significant when analyzed from a single department perspective. But systems can now analyze the end to end process and help in identifying the bottlenecks which can improve the supply chain further.
Web enabled Supply chains
A. Web enabled procurement systems have been an effective system to reduce the manual intervention and increase tracking.
B. Web enabled order tracking systems such as Vehicle tracking system and fleet management systems have helped in getting real time updates about the location of the vehicle and share the status to customers
C. Warehouse management systems help in provided optimal solutions to bin management, storage optimization and vehicle management within the warehouse premises
D. CRM systems help in sharing the customer related data and provides an ease of use touchpoint to customer to help in placing order, tracking the order and finally sharing the electronic proof of delivery. For any complaints and queries they can use the CMR platforms and help in tracking the issue resolutions.
Please note for 4 question, the company considered is a petrochemical company where the supply chain and logistics is similar to Saudi Aramco.
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