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Flashcards in Supply Chain Deck (20):

4 Domains of Supply Chain:

  • Procurement and Sourcing:
    • Procurement is responsible for executing requisitions and orders for a specific need.
    • Sourcing is responsible for setting up contracts with suppliers
  • Materials Management: 3 part discipline
    • Optimizes flow of goods within a warehouse
    • Streamlining transactions with those flows
    • Development of materials planning based on need
    • Management of flow between point of origin and the point of consumption
    • Processes to manage the facility life cycle (Property management, real estate, engineering, construction and maintenance)


Cost Savings vs. Cost avoidances and recording:

  • Savings: Cost reductions and rebates that impact the P&L of SLB.Ex. We pay $100 for an item and we negotiate it to $90.
  • Avoidances: costs that are avoided following a negotiation or other actions with supplier.Ex.We pay $100 for an item and the supplier is changing the price to $150 and we negotiate to $130, that’s a $20 avoidance.
  • Recording all cost savings/avoidances to share ideas in the GeoMarket will have an impact on P & L’s
  • Cost savings = Cost reductions + rebates
  • Net Savings = Gross Savings – Cost increase
  • Cost savings = Cost reductions + rebates


Ethics and Compliance:

  1. FP24 – Financial Protocol 24


  • 3 Elements:
  • Business Ethics
  • Anti-Corruption
  • Financial Reporting
  • No SLB employees can make any direct or indirect payment to any government official or other person to obtain, retain or conduct business.
  • All employees; including supply chain employees have to acknowledge this policy.


Logistics:  Scope:

  • Manage movement from one point to another for the following:
  • Products
  • People
  • Equipment
  • Key areas
    • Transport Staff
    • Vendor Management
    • Effective utilization of resources
    • Central management for multi-segments


Logistics: BOL – Bill of Lading:

BOL – Bill of Lading:

  • Legal document between the shipper of a particular good and the carrier detailing the type, quantity and destination of the good being carried.
  • Also serves as a receipt of shipment when the good is delivered to the predetermined destination.
  • Must accompany any shipped goods no matter the form of transportation and must be signed by an authorized representative from the carrier, shipper and receiver.


Logistics: KPI

KPI – Key Performance Indicators for Logistics movements:

  • LEGs – Lead times
  • Shipping Accuracy (# of non conformities)
  • # and% of Preferred suppliers with a valid contract


Procurement: PO (Purchase order) Creation and Supplier creation:

  • Purchase Orders:
    • Created through SWPS, select the item to be ordered out of the catalog to generate a regular PO.If item isn’t in the catalog but the supplier is in SWPS than a special request PO can be generated.
  • Supplier Creation:
    • If suppliers are approved in ASL the requisition for goods or services can be processed.If the supplier does not exist in ASL we must involve the Sourcing department in order to identify a suitable supplier.Each area shall have their own approved criteria that will define under what criteria a procurement person can source.


Procurement: P2p – Procurement to Pay:

P2p – Procurement to Pay:

  • Series of steps detailing the purchase, method of purchase, approval and payment.
    • Include these main steps:
      1. Procurement planning
      2. Buy-to-pay matrix reference
      3. Order creation
      4. Order management
      5. Goods reception/service verification
      6. Return to vendor process
      7. Invoice verification and payment


Procurement: Buy to Pay Matrix:

Buy to Pay Matrix:

  • Clear guidelines on how to channel our purchases.It is also a means of streamlining the traditional 3-way match to determine the most efficient and effective method to acquire and pay for various categories of goods and services.
  • Includes when we use SWPS, P-Cards, expense reports and when we use invoice supported by a contract.


Procurement: P-Card



Procurement Card (Visa Supplied by Bank of America)

  • Can use for purchases of up to $1000 with those that are not on approved supplier lists.
  • Not to be used for the following:
    1. Hotels, fuel, airline, transportation, restaurants
    2. Personal use
    3. Vendors  set up in SWPS
    4. Client Entertainment
    5. Cash Withdrawls
    6. Tuition
    7. Items for resale


Sourcing/Supplier management:

Categories of Suppliers:

  1. Categories of Suppliers:
    • One Stop: Low value (Spending) and low criticality
    • Critical: Low value (Spending)and high criticality
    • Leverage: High Value (Spending)and low criticality
    • Strategic: High Value (Spending)and High criticality


Sourcing/Supplier management: Approval of new suppliers:

  1. Approval of new suppliers:
    • Sourcing personnel will confirm final supplier selections and award new suppliers.
    • Awarding new suppliers is conditional upon part, product and service qualification.
    • After supplier is set-up sourcing is responsible for ensuring a successful implementation by coordinating with procurement.
    • Steps by step process:
      1. Supplier award and contract finalized
      2. Approved Supplier set-up
      3. Assign supplier manager
      4. Supplier communication
      5. Post Award finalization
      6. Document Storage


Sourcing/Supplier management: Consequences of not having a contract:

  1. Consequences of not having a contract:
    • Increased chance of disputes
    • High risk of litigation in case of dispute
    • Disputes will be settled at “law”
    • Courts will “defend” implied duties/rights
    • Rapid deterioration of relationships
    • Time consuming debates/disputes


Materials Management: NAM Materials Management structure:

NAM Materials Management structure:

  • Distribution Manager: Dmitriy Monakhov
    • Lead Planner/Process Manager: Kensie Hynes
      1. Planner: Prop and Gas (2)
      2. Planner: Chemical (2)
      3. Daily Planner (1)
    • Inventory Manger: Marvin Dubitz
      1. Bulk Plant Managers (5)
        • Bulk Plant Admins (3)
        • Bulk Plant Operators (36)
    • Distribution Lead: Brent Janezic
      1. Sand and Gas (3)
      2. DC (7)
      3. Equipment (2)
      4. Distribution Admin (1)
    • Transportation lead:
      1. Driver Lead (4)
        • Transportation Drivers (43)
    • Freight Pay Lead: Raye Anne Hilts


Main Goals of materials management:

  • Reduce Working Capital
  • Decrease Stock outs
    • Clarify different types of inventory


Materials Management: Inventory classifications:

Inventory classifications:

  • Excess Inventory:
    • On-hand inventory items which are above the maximum stocking level
  • Slow Moving Inventory:
    • Not been consumed in the last 6 months; should be monitored and reported on a monthly basis
  • Obsolescence inventory:
    • Inventory that is no longer required to sustain a given market
    • Customized inventory that have not moved in 12 months


Materials Management: Inventory Counts:

Inventory Counts:

  • Inventory days – [(Inventory on hand)/(6 months average)]*(1 year/2)
    • high will result in obsolescence and low can result in shortages
  • Physical count to be conducted once a quarter


Materials Management: Inventory Management:

Inventory Management:

  • VMI – Vendor Managed Inventory:
    • Vendor manages inventor which includes odering and stocking duties as well as keeping inventory on hand at their facility to accommodate the schedule.
    • Recommended for non-critical items such as fittings, o-rings, MRO, PPE and office supplies
    • This reduces our inventory balance and the total cost of procuring and managing this inventory plus save our personnel time to concentrate on core products
  • DMI – Distributor Managed Inventory:
    • Not the preferred route of managing inventory


Materials Management:

Warehouse management:

Warehouse management:

  • Responsible for replenishment, storage and accountability of all materials
  • Examine HSE, layout, controlled access, ergonomics and LEAN
  • JIT – Just in Time:
    • Saves on warehouse space and cost
  • FIFO – First in First Out
    • Ensures oldest product is used first
    • Controls obsolescence


Materials Management: Confidentiality and Purchase level codes:

Confidentiality and Purchase level codes:

  • Confidentiality Codes:
    • Used to identify restrictions on information about products:
      1. CC1 is the most restricted and not disclosed
      2. CC3 is a commodity product
  • Purchase Level Codes:
    • Degree to which sourcing of product is restricted
    • PLC1 is the most restricted
  • CC and PLC are correlated to each other – CC1 must also be PLC1