The global petrochemicals firm won the CIPS Middle East SM Awards following a nine-month digitisation project, achieving 8% savings
From making cars and planes more fuel-efficient to developing innovative medical devices and sustainable fertilisers, Sabic is a major petrochemical manufacturer and supplier. Set up in 1976 by the Saudi Royal family and head-quartered in Riyadh, Saudi Arabia, it operates in at least 50 countries, employing more than 33,000 people and has an estimated brand value of $3.96bn, supplying everything from chemicals, such as acetone and triethylene glycol, to steel reinforcing bars for concrete and wire rod coils.
The firm’s recent move from self-confessed “labour intensive” buying processes to automated procurement processes, in a nine-month timespan, has brought budget savings of 8% with competitive bidding, while supply lapse time has been cut by 73%. The company says even greater efficiencies will ultimately give buyers the opportunity to review newly qualified suppliers, manage distributor and agent relationships, and drive innovation and local business development. The digitisation project won Sabic the category prize for Most Improved Procurement Operation – Step Change, at the CIPS Middle East SM Awards 2019, as well as the overall winner award.
Sabic started by creating a team from different functions within the business, which looked at each process as part of a work stream, supported by data analysis, change management assessments and IT and business integration planning.
From this, a blueprint for procurement excellence was drawn up, combining contracting and logistics with systems applications and products (SAP) software expertise. Next Sabic conducted assessments of how these processes would work in real-life examples. This helped identify the most suitable ones – and those with clear ROI – to take forward into the next phase.
Monthly workshops with the original cross-functional team helped to keep the transition on track, as well as providing an opportunity to discuss further creative solutions at each step. Changes were phased in, with Sabic staff from the US, Europe and Asia involved to help inform future roll-outs in their regions. Externally, Sabic trained hundreds of suppliers to use the newly automated digital portal so they could manage the expected increase in orders and business opportunities. One million core procure-to-pay transactions for around 180,000 low-value spot-buy items are now automated.
Material requirements are now automated using 11 different scenarios to streamline the ordering process.
Supplier shortlisting is automated, with computerised descisions based on category and materials mapping to qualified suppliers.
Algorithms ensure that required materials are bought at the right time and place in the supply chain.
Digitised bid evaluation and total cost comparison enables consistent quote comparison, while the automated process also checks for price increases.
Purchase orders are created automatically, along with follow-up confirmation.
A visual dashboard ensures transparency, enabling staff to monitor real-time performance of automation solutions.
CIPS Middle East Awards 2020 are now open for entries.