Challenges and Outlook in Procurement VANESSA AGUIRRE PEMEX PROCUREMENT INTERNATIONAL

Transcription

1 Challenges and Outlook in Procurement VANESSA AGUIRRE PEMEX PROCUREMENT INTERNATIONAL

2 Content Context International Best Practices Procurement Division PPI

3 (1) Statical yearbook 2013 (2) DCO PEMEX PEMEX Context Total Revenues (USD billion) INSTALLATIONS Facilities Domestic sales Exports Services Revenues Snapshot Production area Refinery Petrochemical Complex Gas Processing Complex Storage and Distribution Terminal Pipeline Maritime Route More than 150,000 employees 1 6 Refineries 1 8 Petrochemical Complexes 1 9 Gas Processing Complexes 1 Pipelines: 67,000 Kms approximately 2

4 Procurement Context Snapshot Between $25 to $30 US billion of equipment, services, leases, and public works procurement procedures Around 30,000 awarded contracts per year More than 3,000 employees dedicated to procurement

5 Content Context International Best Practices Procurement Division PPI

6 B e n c h m a r k i n g 14 relevant Oil & Gas companies have organized their procurement functions around 2 models: Centralized and Hybrid Centralized Decentralized Hybrid Decentralized Hybrid Centralized Centralized CPO CPO CPO CPO Support Specific Procurement Entity (Business Unit BU ) Support Category Managers Business Unit Support Executive Procurement Group Procurement Business Unit Procurement Business Unit Support Executive Procurement Group Procurement Business Unit Operations Operations Operations Operations Lack of a Procurement Team with coordination functions. Procurement functions are assigned by business unit Coordination of procurement strategy by category managers It has no specific business units reporting to the CPO Global Procurement Team for specific categories Other categories are managed directly by business units Procurement functions are supported by Central Office All procurement functions will report to CPO (including operations) Pemex Sonangol BP, Conoco, Total, Petrobras, Petrochina Exxon Mobil, Repsol, Shell,Chevron, ENI, Statoil, Suncor, Kuwait Petroleum Johnson & Johnson Motorola, Pepsico Astra Zeneca, GE Arcelor, P&G, Danone, Philips, Clariant, Dow, DSM, DuPont, Akzo Nobel Glaverbel, PPR, SG, Thalès, Volvo, Kraft Foods, IBM, VW, ConAgra Foods, Rohm- Haas Source: Oil & Gas Sourcing & procurement benchmark, Accenture 2012

7 Best Procurement Practices in Oil & Gas Industry Central Procurement Organization 1 Shift to a Centralized or Hybrid centralized Organization. CPO reporting to President & CEO Category Management Integrated Shared Services 2 3 Procurement functions based on category management with clear responsibilities between the corporate services and business units Evolution towards integrated shared services with other functions (IT, HR, FI and others), coverage, flexibility and overall service approach to the business units Since 2008, there has been a clear shift towards centralization, integration and globalization with a focus on: Strategic Sourcing 4 Using innovation to maximize value in Procurement. International Procurement Offices I. Continuous improvement Technology 5 Maximizing the use of IT to improve the efficiency, effectiveness, visibility and compliance policies, processes and procedures of Category Management II. Innovation III. Transformation programs Talent Management 6 Focus on intensive training programs, functional and technical content to raise the skills Source: Oil & Gas Sourcing & procurement benchmark, Accenture 2012

8 Content Context International Best Practices Procurement Division PPI

9 The New Pemex Procurement Division Implementation of international best practices on three main subjects. Strategy Suppliers Procurement Alignment with Corporate Strategy Standardization of Process and Procedures Process Governance. Strategic Sourcing and Category Management Market Intelligence Strategic Alliances & Joint Ventures Suppliers Development National Content Suppliers Evaluation Demand Forecast Strategic Procurement by Business Units Procurement Implementation Strategy National and International Public Tenders Restricted Bids Direct Award Relationships with final users

10 Category Management Category Management Category management is an international practice that helps to transform the process of procurement and supply to generate value by segmenting the procurement of goods, leases, services and public works to achieve the most favorable conditions in terms of quality, timeliness and price Spend analysis and category selection Professional Buyers Category analysis based on the methodology of strategic sourcing Recurrence buy Estimated Volume Need for Business Unit Analysis Market-provider Market Intelligence Market study How? Strategies International Public Tenders Framework Agreements Referential Agreements Public Bidding Price Negotiation Prequalification Multi-year Open Orders

11 Category Development Procurement Drilling Equipment 2013 Value of procurement $5.999 USB 4 existing processes: $636 USM 52 processes in 2014: $4.051 USB 79 processes in 2015: $ USB Ships/Vessels Value of procurement: $ USB 36 existing processes: $2.317 USB 146 processes in 2014: $3.338 USB 88 processes in 2015: $4.789 USB

12 Category Development Procurement Tubing: Average Value of procurement $1.661 USB Tubing category in progress Upcoming categories to develop Drilling and completition services Value of procurement $3.830 USB Offshore installation and maintenance Value of procurement $1.814 USB Exploratory studies Value of procurement $711 USM

13 Content Context International Best Practices Procurement Division PPI

14 DCPA Estructure CPO Procurement and Supply Management Strategy and Business Model Support Development and Relations with Suppliers and Contractors Procurement and Supply

15 A U.S.A. Corporation wholly owned by Petroleos Mexicanos ( PEMEX ), with the main purpose of rendering International Procurement Services to PEMEX and its subsidiaries and its affiliates ( PEMEX Group) Incorporated in Delaware Authorized to do Business in Texas Operating since November 1994

16 Our Role PPI acts as a facilitator, an agent for a fully disclosed principal PEMEX Group - by contributing with comprehensive management solutions for the supply chain of imported goods and services PPI does not: Purchase for itself Take title of the Goods Mark-up Resell The buyers is PEMEX Group operating: Directly or, Through PPI on behalf of PEMEX Group

17 Our Services Supply Base Management Supplier Invoice Processing Purchasing PEMEX Procurement International Logistics and Customs Negotiation of Framework Agreements Expediting and Inspection PPI provides international procurement services to facilitate the contracting with international companies for the supply of goods and rendering of services PPI services allow the ultimate end customer, PEMEX Group to place orders directly to suppliers The process enables a transparent and expedited purchasing procedure for all the parties involved HITEC, an IT system owned by PPI, allows the PEMEX group to remotely access and consult information about orders and suppliers

18 Framework Agreements Framework Agreements are legal instruments subscribed to predefine terms and conditions (T s & C s) that are applied by reference to facilitate the future release of PO s by the PEMEX Group, or by PPI acting on behalf of them The Framework Agreements are initially executed between PPI and suppliers who, in most cases, are: The exclusive owners of intellectual proprietary rights, or The holders of an exclusive right of utilization or commercialization, and/or that are the exclusive representative(s) of such owners Via a Notice of Accession the PEMEX Group becomes part of the Framework Agreement. The Framework Agreement does not create a purchasing commitment to the PEMEX Group. Its T s & C s become binding when a P.O. is released by PEMEX Group, or PPI, and the same is accepted by the suppliers

19 Framework Agreements Framework Agreements are used by the PEMEX Group to comply with their international procurement policy, as recently ratified by PEMEX s CEO, of contracting preferably with the OEM s or Original Service Providers Framework Agreements apply to the contracting of goods and services manufactured or rendered by international suppliers that, according to legal requirements applicable to the PEMEX Group, can be contracted via direct assignments Framework Agreements can be implemented as: Two-party agreement (e.g.: with an international company) Tri-party agreement (e.g.: with an international company and its Mexican subsidiary) Multi-party agreement (e.g.: with a consortium of several international companies and their Mexican affiliate)

20 FRAMEWORK AGREEMENT NEGOTIATION REQUEST NOTICE OF ACCESSION Implementation of the Framework Agreements Petróleos Mexicanos Petróleos Mexicanos PEMEX Exploración y Producción PEMEX Refinación PPI Framework Agreement PEMEX Exploración y Producción PEMEX Refinación PEMEX Gas y Petroquímica Básica Supplier PEMEX Gas y Petroquímica Básica PEMEX Petroquímica PEMEX Petroquímica

21 Contracting Options Before the Negotiation Traditional PO s RFQ, Quotation, Negotiation of T s & C s, PO, etc. Single PO s Blanket Orders along with Supply Orders During the Negotiation Traditional PO s Retroactivity Letter and Declaration of Exclusive Rights Single PO s Blanket Orders along with Supply Orders RFQ, Quotation, Negotiation of T s & C s, PO, etc. With Framework Agreement Implemented PO s Under the Framework Agreement Single PO s Blanket Orders along with Supply Orders Negotiations case by case are minimized Traditional Order Negotiation Starts Traditional Order Accession Completed PO Under Framework Agreement

22 Order Delivery Process PPI / PEMEX PPI SUPPLIER PPI SUPPLIER PEMEX or Subsidiaries issue PO directly, or PPI issues PO on behalf of PEMEX or Subsidiaries. PPI s System (HITEC) generates PDF file and sends to Supplier via Supplier receives and accesses secure link to access PO When Supplier Access PO, HITEC report that order has being viewed Supplier has a numbers of days to Accept/Reject the Order PURCHASE ORDER PURCHASE ORDER

23 Framework Agreement: Implementation Process Customer Request Project Creation Project is created in HITEC and assigned to a Contract Specialist Initial contact is established Supplier is registered in HITEC Initial Meeting Invitation and RFI Contract Draft Key information from Supplier is gathered Formal invitation is prepared & sent to Supplier along with RFI Upon receipt, Contract Specialist reviews information and documentation for completeness & accuracy Contract draft is prepared and sent to Supplier Negotiation Signature + Accession Implementation Negotiation is carried out until an agreement is reached Agreement is legally sanctioned Agreement is signed by the parties involved The Agreement & Notice of Accession is sent to the PEMEX Group The Agreement is implemented in HITEC The Agreement is utilized by the PEMEX Group

24 PPI Today Orientación estratégica Desarrolla alianzas estratégicas con socios de negocio (Proveedores y Clientes) Desarrolla modelos innovadores de procura Enfocado en desarrollo de conocimiento Agrega valor al proceso de procura y abastecimientos de PEMEX

25 Highlights Unified processes, policies, and procedures Consolidation and aggregation of demand to achieve significant economies of scale Implementation of one standardized technological platform Savings generated through negotiation, consolidation, and competitive tender processes Generation of transparency and efficiencies in the procurement activities and processes Visibility (of needs), variability (how its procured), and demand administration (how to reduce what is procured) Creation and consolidation of long term relationships with suppliers Reduction of the procurement cycle to reach Just in Time parameters for goods and services

26 Highlights A unique Procurement Model promotes transparency and accountability The creation of the CPO is one of the first steps in the transformation of PEMEX under the energy reform Pemex efficient procurement will play a key role in a competitive market The core of the procurement transformation is: category management, long term relationship with suppliers and talent management Changes in the legal framework will allow Pemex to operate according to international best practices The centralization will create value through out procurement strategies

27 THANK YOU