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Supply chain managers - a structured professional program

Friday, May 31, 2013

The Chartered Institute of Purchasing and Supply (CIPS), together with a group of Aberdeen supply chain managers, have developed a structured program for training oil and gas purchasing and supply chain professionals.

The Chartered Institute of Purchasing and Supply (CIPS), together with a group of Aberdeen oil and gas supply chain managers, have developed a structured program for training oil and gas purchasing and supply chain professionals, with the aim of making it easier for companies to recruit, train and retain people and easier for staff to develop skills they need and develop their careers.

One of the initiators of the program was Steve Johnson, head of global procurement and supply chain management with Prosafe Offshore Limited, an Aberdeen based operator of accommodation vessels.

Mr Johnson gave a talk about the program, at the Digital Energy Journal November 2012 forum 'optimizing supply chains'.

The general philosophy is that if the program is used widely, the industry will eventually reach a point where all supply chain professionals have a common approach to managing supply chains.

Over the short term, the program should make it much easier for companies to attract and retain people, since staff prefer structured professional development environments, rather than ones where you are told where your desk is and left to get on with it.

'Employers want to make sure that they've got the right kind of person to do something that they need them to do, and the employee wants structure to their career, their education and their future,' he said.

Efforts to develop the program, started around2005-2006, when a 'people' sub-group of the Oil & Gas UK Supply Chain Forum, thought it would be a good idea to develop an oil and gas training program for procurement and supply chain practitioners.

The group decided to work with the Chartered Institute of Purchasing and Supply, the professional Institute representing purchasing and supply chain professionals.

The role of a supply chain manager was difficult to standardise - they are responsible for specialists in different areas of supply chain, such as buyers, offshore logistics coordinators and contracts engineers, he said.

But it was clear that all companies, including operators, service companies and subcontractors, have the same core requirements for supply chain practitioner, he said.

'What we're trying to achieve is have a structured education programme that covers these areas,' he said.

Companies who planned to sponsor students to go on the course needed to specify what they wanted their students to be able to achieve at the end, and CIPS ensured that the requirements were relevant.

The companies are also asked to give their students challenging real projects to work on as part of the programme with the objective of bringing in a return of investment of 'at least' the full cost of the training.

Developing the program

To get things started, Prosafe offered to host the first module of the training programme and put two of its staff on the course.

'I spoke to my boss and said,' If I put my two people on here, I promise you that I'll get back their training cost and the cost of us hosting this event, at the end of their program mid to late 2012,'' Mr Johnson said.

'I actually had it in my personal objectives that I was going to land this.'

'They all graduated a couple of months ago and have actually made many times more the cost of the training. I can actually put that in front of the MD and say 'See, I told you so!''
The first group to take the course qualified in September 2012, and the 4th program started in November 2012.

After the CIPS program was proven, Mr Johnson had discussions with the Chartered Institute of Logistics and Transport (CILT) about developing a similar program for logistics professionals, and now that one is running too.

CIPS is now looking at setting up similar training programs in other parts of the world.

A course can basically be held anywhere if that there are 16 people who would like to attend. Large companies might have 16 people for a course and can organize the courses themselves, so this program is especially suitable for companies which can only release purchasing professionals one or two at a time.

Sidebenefits
Some of the communications which take place on the courses are also helpful, when students come back to their companies and they are talking about what their companies are doing and creating useful business relationships.

There have also been cases where a buyer and supplier have had a problem, and when representatives of both companies were on a course together they managed to resolve it.
'For no other reason than just using a different sort of language altogether,' he said.

Mr Johnson finds that people who have attended the course often come back thinking more strategically. 'It's so obvious that people are thinking differently within my own team,' he said.

Staff who have been on the course also end up with an improved work ethic. 'They are now thinking about improving what we do and how we do it as opposed to simply processing data' he said.

'You come out with formal qualification at the end of it that is transferable globally and gives the individual something, as well as the company.'

'It also puts a bit of pressure back on us because now they've qualified, they could leave. That helps us, keeps us on our toes as well.'

Case studies
The course includes case studies of real life examples written by people who have done the work.

For example, imagine the oil and gas company is starting a drilling campaign in a new part of the world, and needs their procurement department to find everything they need. Where do they start?

The right answer could be to find out as much as they can about the area, including the laws and cultures, perhaps utilizing local agents to assist.

Common mistakes

One common supply chain management mistake is to believe that you are always 100% protected by your contract, he said, but you still don't end up with what you need.

For example, a company may higher some kit that is essential to their business, with KPIs for specific performance expectations.

'Now we think that's alright, we've got a contract,' he said.

But perhaps the kit fails because of a key part that is not available and there is no way to get it delivered. 'The most robust contract couldn't get the kit working,' he said.

'It's not always the big expensive critical items that put companies out of business.'

Another common supply chain mistake is for people to think 'just in time' is fine.

'Just in time is fine if you live in Japan and everybody is about 3 miles from you,' he said.

'What about a global market place? Just in time is no good for me'.

But the alternative, 'just in case', when you keep all kinds of spare parts on the rig in case you need them, is not ideal either. 'We don't want another rig full of spares,' he said.

The key is to obtain a balance, which will be best obtained by combining experience with common sense and some best practice.

'Having a structured, industry specific training programme in place, creating a common way of doing business across the industry, goes a long way to help ensure that we minimize risk where we can, or are well positioned to react to unplanned events,' he said.

Retirement

Mr Johnson jokingly said that one of the satisfying aspects of the course is knowing he can retire in 10 years with a good functional team in place, who will be able to do his job when he goes.

'When I do leave, I won't be thinking, right how they will manage without me,' he said.

'It's probably not even going to matter because these people will be coming through, in fact they'll probably be encouraging me to leave because I'll be the dinosaur by then.'



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