Introduction

This ETC Strategic Procurement Management in the Energy Sector training course will have a deep dive into Total Cost of Ownership and value creation by strategic procurement, which is critical for the ever more challenging energy sector to compete with sustainable profitability. It will look at how to deliver acquisition cost reduction, TCO optimization, cost avoidance, and value creation in the energy sector.

The Strategic 3rd party cost management is vital and increasingly important for the energy sector in the oil price crash context and the increasing demand for "greener" energy. Is competitive bidding the only way to help organizations buy goods or services at the lowest price so that they can become more competitive than their peers? This conventional and traditional approach will remain a major mechanism in both private and public procurement. Still, there is a much bigger picture and scope that contributes to the competitiveness of organizations. Time-To-Market, Total Life Cycle Cost, Brand Image, Corporate Reputation, etc. will contribute to the competitiveness of modern organizations. This training course leads the participants to carefully craft strategies for managing costs while maximizing value for the bigger organizations.

This ETC training course will highlight:

  • Procurement organization design in the energy sector
  • Classifying 3rd party goods and services into categories based on supply risk and value of spend
  • Selecting the right market approach
  • Formulating the best-fit contracting strategy
  • Planning and managing a tender process
  • Understanding the liability and indemnity clauses in the high-risk contract
  • Negotiating professionally with suppliers
  • Post contract award contract management best practices

Objectives

At the end of this ETC training course, the participants will learn to:

  • Classify 3rd party goods and services into four quadrants
  • Determine the best-fit procurement strategy
  • Plan and manage a competitive tender process
  • Identify, assess, and manage procurement risks
  • Evaluate vendor proposals from technical and commercial perspectives
  • Prepare for and conduct professional negotiation with suppliers
  • Handle the outcomes from a competitive bid process
  • Strike for continuous improvement post contract award

Training Methodology

Leveraging world best practices are proven in real business. This training course will be delivered by a recognized Contracts & Procurement Professional in the Energy Sector who has been involved in delivering complex projects around the world. Exercises, role plays built on a carefully designed case study will maximize hands-on practice.

Organisational Impact

The organisation will benefit from this training course through:

  • Procurement becomes a competitive edge of the company
  • More effective and efficient procurement practices
  • A better-fit approach to the supplier market
  • A reduction in failed procurements, where contractors and vendors decline to participate in competitive procurements
  • A reduction in financial and other risks to the organization, by making better contracts
  • An improvement in the performance of contractor performance, by choosing better contractors, and using more appropriate terms and conditions

Personal Impact

This impact of this training course to the participants are manifold and includes:

  • Climbing the career ladder for a strategic procurement role vs. administrative role
  • Upgraded status in the organization for directly impacting on the profitability of the organization
  • Understanding the range of methodologies and techniques required for Total Cost of Ownership reduction
  • Being respected as a subject matter expert to lead all departments in TCO reduction
  • Being more respected by suppliers for acting more professionally
  • Become a more competent negotiator

Who Should Attend?

This is targeted for Energy Sector practitioners or for other professionals who want to understand how the Energy Sector addresses its procurement challenges.

This ETC training course is suitable for a wide range of professionals but will greatly benefit:

  • Asset Managers
  • Project Managers
  • Engineering Project Professionals
  • Contract Professionals and Administrators
  • Contract Analysts and Engineers
  • Specifiers, Buyers, Purchasing Professionals, and Procurement Officers
  • Anyone involved in the preparation, evaluation, and management of commercial invitations to tender, requests for bids and proposals and contracts for the purchase of services, materials or equipment

The Course Outline

Day One: Understanding the Value Proposition of Procurement in the Energy Sector

  • Linking Corporate and Procurement Objectives
  • World-Class Procurement Performance Benchmarking
  • KPIs to Measure Procurement Performance
  • Typical Procurement Organizational Structures in the Energy Sector
  • Common Requisition-To-Pay and Contract Management Systems
  • Private and Public Procurement Policies

Day Two: Cost Management and Value Creation in the Energy Sector

  • Understanding the Financial Statements
  • Applying and interpreting Net Present Value
  • Supply Chain Cost Modelling
  • Total Cost of Ownership/Total Lifecycle Cost in Energy Sector Projects
  • Porter’s Five Forces
  • Value in Post Contract Award Contract Management
  • Tools and Techniques in Decision Making: Decision Trees, Root Cause Analysis

Day Three: Formulating the Category Strategy in the Energy Sector

  • Classifying 3rd party spend into four quadrants
  • Business Needs
  • Spend Analysis
  • Supply Market Analysis
  • Supply Chain Cost Modelling
  • Market Approaches
  • Selecting the Category Strategy
  • Identifying and Mitigating Contracting Strategy Risks

Day Four: Selling a Category Strategy to Stakeholders

  • Create the Vision/Mission Statement
  • Quantify the tangible benefits and cost to implement the strategies
  • Introduce the Organization, Process, and Systems to realize the strategic procurement benefits
  • Specify the Deliverables and Milestones
  • Estimate the Resources and Time Needed for implementation
  • Identify Stakeholders and create Stakeholders Management Plan
  • Create Risks Mitigation Plan for the Project
  • Prepare Communication Plan

Day Five: Best Practices in Tender Procedures in Mega Energy EPC Projects

  • The Tendering Process
  • Bidders Pre-qualifications
  • Tender documentation
  • Choosing the Best Contract Type, including
    • Lump-Sum Fixed Price Contracts
    • Unit Rate Contracts
    • Cost Plus Contracts
    • Day rate Contracts
    • Time and Materials Contracts
  • Essential Clauses in the Terms and Conditions
  • Bid Security, Performance Guarantee
  • Bid Evaluation Approaches (One-envelop, Two-envelop, Online Bidding)

Day Six: Contract Clauses Deep Dive

  • Understanding the Concept and Principle of Contract Law
  • Framework Agreement
  • Model Contract Formats: Specific for Consults and Contractors
  • Important Contract Terms to be Included
  • Confidentiality, Intellectual Property Rights
  • Insurance, Indemnity, Warranties

Day Seven: Managing the Contract Award and Initialization Stage

  • Communicating the Results: Internally and Externally
  • Dealing with Disputed Contract Awards
  • Operating under Pre-contract Letters of Intent
  • Managing Pre-contract Scope Changes
  • Initiating Contract

Day Eight: Managing Contract Performance Management in Mega Energy Procurement Contract

  • Defining Roles and Responsibilities
  • Introducing the Contract Management System
  • Create a Contract Management Plan
  • Best Practice in Driving Continuous Improvement
  • Contract Close-out

Day Nine: Communication, Negotiation, and Conflict Management Skills

  • Influencing Skills
  • Influencing skills role play
  • Conflict management methodology
  • Conflict management role play
  • Negotiation Skills Methodology

Day Ten: Negotiation Simulation using an Energy Contractor Case

  • Teams negotiate on deals
  • Teams debriefing on negotiation results
  • Teams giving feedback to each other
  • Instructor feedback to teams
  • Question & Answer and Wrap up

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