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Management of supplier partnership
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Scope of workshop
Focus and actual processes of Supplier
management List of selected manufacturers
Presenter Mr. David Sojka
Necessary developments on the actual
process On-line pre-qualification HSE requirements
Supplier management in SRM 5.0 system
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Introduction of SHS Supplier Management
Shared Services Supplier Management Team
10000
MOL-Group has more than
active suppliers!
The Supplier Management teams main objective are
to keep the contact with them additionally
managing and evaluate their supply ability, MOL
Group point of view!
The Supplier Management team in MOL Groups
Purchasing department
Ágnes Jenei
MOL NyRt.
Slovnaft
TVK
Zsolt Bársony Klára Pataki (US P)
Piroska Ferkó
David Sojka
We also cooperate and provide services for Gas,
LUB, ISSC
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Procurement Supplier evaluation
Determination of requirements
Invoicing / Payment
Continuous evaluation
Suppliers selection - prequalification
Procurement
Tendering
Goods receipt / Service acceptance
PO processing
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Supplier management processes
Maintenance of ERP Suppliers database 3
different ERPs within MOL Group SAP, Oracle and
BPCS
Supplier evaluation and classification

• Prequalification process (new supplier) common
  process and common prequalification questionnaire
• Continuous evaluation (contracted supplier)
  common criteria but different methodology and
  different IT tools
• Classification common grades (A, B, C, D) based
  on evaluation score

Consequential processes

• Rationalization of supplier master database in
  ERPs common process
• On site audit at supplier common process
• Suppliers Block List common process and list
• List of Selected Manufacturers in progress to
  be common process
• Create the possibility to meet our suppliers in
  scope of the yearly Supplier forums
• KPIs and Reporting shall be implemented and
  developed to common process

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Potential partner or suppliers pre-qualification

• When a supplier pre-qualification?
• New supplier
• 3 years non active supplier
• Unblocking supplier
• Company data or activity update

• Pre-qualification requirements?
• Pre-qualification questionnaire
• Tax office certification
• Custom and finance certification
• Signed questionnaire confirmation
• Technical documentation (catalogue)
• ISO certification, if available

• Data input to database - BMR?
• Registry court data of company
• Contact data of company
• Pre-qualified activities
• Qualification grade (A, B, C, D)
• ISO certification data
• Questionnaire uploading

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Potential partner or suppliers pre-qualification
(Actual process)
YES
Notify supplier
Supplier management
Qgt95?
Qgt55?
NO
Incoming PQ
NO
YES
Is further assessment needed?
Satisfactory
YES
Onsite audit/ First sample/ Piloting
YES
NO
YES
Proposal for New supplier (market research)
Send PQ to new supplier
NO
Purchaser
Upload into database
Load assessment report Into database
Load Assessment report Into database
System- BMR
Prequalification questionnaire
Completed PQ, Prequalification Documents, Certific
ation sheet
BLOCK LIST
ASSESMENT REPORT
Document
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Supply performance evaluation

• When a supplier continuous evaluation
• Every closed order after goods receipt /
  service acceptance

• The edge of satisfaction
• C satisfactory supplier corrective actions
  must be applied
• C supplier within two consecutive quarters
  D unsatisfied supplier
• D unsatisfied supplier proposal for Blocking

Evaluated supplier is quarterly informed about
its evaluation by scorecard
D
Blocked quarterly Less than 50 points
C
Keep in database just in special
cases, improvements or be blocked Evaluation
Score 50 - 74
A/B
A 90 100 B 75 - 89
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Evaluation scorecard of suppliers performance
evaluation
Price
Customer satisfaction

• Active cooperation
• Flexibility
• E-procurement

• Price
• Payment terms
• Suppliers efficiency

Evaluated by Requestor (Services)
by Purchaser (Material)
Evaluated by Purchaser
Supply ability
Quality

• Meeting deadlines
• Meeting ordered quantity
• Packaging

• Quality performance
• Quality Management System
• HSE system

Evaluated by Requestor (Services)
by Warehouse (Material) by Supplier management
Evaluated by Requestor (Services)
by Purchaser (Material) by Warehouse
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Current cooperation of IT SM tools in MOL Group
Pre-qualification questionnaire
ORACLE database
BMR in MOL Group (Generally used for
Pre-qualification at all affiliates)
SAP database
SEM -gtSN
Supplier
BPCS database
Supplier
Issofice -gtTVK
BMR -gtMOL Rt, MOL LUB, ISSC, MOL Romania
Supplier
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Blocking of suppliers

• Supplier can be blocked
• Based on prequalification questionnaire, if MOL
  Group requirements not reached
• Based on serious findings during the external
  audit, or not fulfillment of requirements for
  improvements identified within audit
• Based on poor performance of services, breach of
  ethical behavior or HSE requirements, repeated
  low quality of product, etc.
• Company is in liquidation or bankruptcy process
• Blocking period of suppliers can be from 1 year
  to forever in serious cases based on Executive
  Board decision

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List of Selected Manufacturers (LSM)

• Unified Electric equipment, Instrumentation and
  Mechanical Equipment (Rotary machines and
  Stationary equipment) company standards
• LSM implementation to prequalification process

• Just to be a MANUFACTURER, registered on the
  List of suppliers and meeting with
• production scope in comparison with
  manufacturers from the Lists,
• technical and metrological parameters of relevant
  products in comparison with manufacturers
  product from the Lists,
• fulfillment of valid legislation requirements and
  valid standards for relevant products,
• fulfillment of relevant product (special)
  requirements - requirements which manufacturers
  from List are not able to fulfill,
• manufacturers quantity in List from the
  unification point of view,
• manufacturers quantity in List from the
  competition during selection process point of
  view.

LSM
To identify the manufacturers for Electric,
Instrumentation and Mechanical machines,
equipment and their spare parts.
Technical specifications (company standards) for
relevant equipment.
List of suppliers
To identify satisfactory suppliers, their contact
and commodity information
Worldwide companies and entities
Potential suppliers base
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Supplier Management
Questions and Comments
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Scope of workshop
Focus and actual processes of Supplier
management List of selected manufacturers.
(Vendor list)
Presenter Mr. David Sojka
Necessary developments on the actual
process On-line pre-qualification HSE requirements
Presenter Mr. Zsolt Bársony
Supplier management in SRM 5.0 system
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Opportunities of the actual and the on-line
systems

• BMR system
• Advantages
• Controlled supplier registration
• Automatic score calculation in the questionnaire
• Disadvantages
• Multilanguage problem due to
• supplier pre-qualification at activity
  classification
• Uneasily manual registration
• Missing automatic up-to-date possibility at
• Suppliers main data (i.e. attention, name etc.)
• Supplier can not check the result of their own
• quarterly evaluation

• On-Line pre-qualification
• Advantages
• - Solved multilanguage problem due to
• supplier pre-qualification at activity
  classification
• Automatic registration, and activity
  classification
• Supplier can up-to date the company details
• due to an controlled process
• Up to dated supplier master database in ERP
• systems
• - HSE requuirements can be published
• Disadvantages
• - Manually controll required due to registraion

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Proposed developments for the optimization

• Required developments on GIP portal
• Connection between BMR and GIP
• Define pre-qualification categories at
  registration part of the web page
• Made this categories changeable by lead-buyers
• Possibility to send negative feedback to supplier
  in case of declined registration
• HSE requirement in refinery and its plant
  releated activities will be presented.
• Plant shutdown releated activities will be
  implemented to the pre-qualification
  questionnaire.
• List of Selected manufacturers process

• Required developments in BMR
• Connection between BMR and GIP
• Automatic upload possibility of exported file
  from GIP

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On-line pre-qualification process
Passwrod for SUPPLIER
Supplier management
Export the accepted questionnaire from GIP
Import the CSV file into the BMR system
Inform the Lead-buyer
Is the Database increasement required?
YES
Password to supplier
Proposal for New supplier (market research)
Purchaser
NO
Request for On-line pre-qualification
On line pre-qualification with the
same process like to original
Supplier
The pre-qualification controlled via GIP portal
The pre-qualification controlled via GIP portal
BMR system data impoprt interface
System
Prequalification questionnaire
Positive note to Supplier With the user rights
Exported CSV file
Informative note to the Lead-buyer of the
Pre-qualification result
Negative note to Supplier that the
refistration not required
Document
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Required developments in the actual system
Proposal for connection between BMR and GIP
Brief logical shame for safe connection
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On-line pre qualification test system

• Supplier registration
• In case of potential
• supplier registration
• Supplier is able to get
• authorization to pre-qualify
• itself on the GIP portal by
• e-mail and providing
• basic company data

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On-line pre qualification test system

• - Controll on registration
• - Due to the pre-qualification
• the relevant partners must
• accept the relevant HSE
• requirements!
• The Suppliers will able to review
• Its pre-qualification and evaluation
• Results.
• There will be the possibility to
• update its company master data.

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Scope of workshop
Focus and actual processes of Supplier
management List of selected manufacturers.
(Vendor list)
Presenter Mr. David Sojka
Necessary developments on the actual
process On-line pre-qualification HSE requirements
Presenter Mr. Zsolt Bársony
Supplier management in SRM 5.0 system
Presenter Ms. Ágnes Jenei / Mr. Zsolt Bársony
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The Three Pillars of the Procurement
Transformation

• 1. Reorganization of Group Procurement
  (create competent specialists in
  strategic sourcing, contracting and transactional
  sourcing in all cost categories)
• 2. Implementation of an IT solution
  (Group Spend Management
  System-GSMS that is capable of synthesizing all
  necessary purchasing information out of the
  different ERP solutions is key to really
  integrated purchasing operations)
• 3. Professional knowledge, competency and
  capability building (ensure realization of
  efficiency improvement potential supported by the
  new organizational set-up and the proposed IT
  solution)

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NON-HC PROCUREMENT organisation
Group Corporate Services
Group Procurement
Local Coordinators
Shared Services
US Procurement
International Procurement
Central-European Procurement
Maintenance Materials Services
Engineering Construction
General Services
Energy
Production Materials
General Materials Communication Services

• Public procurement of investment projects
• RD, Upstream Laboratory services procurement,
  surface services (public) procurement
• Small projects (COP) procurement, well-site
  logistics, oil-gas related services
• Field operation related service (public)
  procurement

• Electricity
• Natural Gas
• Other utilities

• Biofuels
• Refining Catalyst
• Petchem Catalysts and Technological materials
• Refining Additives
• Petchem Additives Chemicals
• Chemicals and water treatment
• Packaging Laboratory Materials

• General Material I. "White
• General Material II. "Blue
• General Material III. Corporate Communication
  materials services
• General Material IV. Marketing Communication
  materials services

• Russia procurement
• Oman procurement
• Pakistan procurement procurement control
• Kazakhstan procurement procurement control,
  Yemen procurement

• Mechanical Services
• Technology Operation Maintenance
• Electrical Services
• Pipes, fittings, pipe bundles, hoses
• Electric materials, protective materials
• Compressors other rotating equipment
• Mechanical materials fittings

• Mechanical equipment
• Architectural work
• EPC / Refining
• EPC / Logistics
• Retail
• Process control instrumentation
• Basic design licence
• Technological work
• Gas business

• Logistics
• HSE Petchem
• HSE Refining Upstream
• Telecomm. Services
• IT / Consulting other services
• IT / Software, licences and maintenance
• IT / Materials assets
• HR services
• Security Services
• Facility Management
• Financial Insurance services

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System-Independent Holistic Business Model - Used
for the SRM Concept
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Projects of the GSMS Program (SAP SRM
implementation)
New Organization structure and category management
I. Phase
III. Phase
MOL
Subsidiaries
Roll out new processes to subsidiaries
Operative strategic processes, service
procurement, contract management
Extending new processes to materials and
implementing new functions
II. Phase
3S non-CH project
GSMS project
3S SAP Standard Solution, Non-CH team
GSMS Group Spend Management Solution
GSMS PROGRAM
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Main Development Areas Group Level instead of
Corporate Level
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Main Development Areas Electronic Channels
instead of Paper
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Main Development Areas Supply Base instead of
Suppliers
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Supplier identification
Register
Registration
Send Questionnaire(s)
Web Survey
Response
Create
SupplierDatabase
Approval
Send Bid Invitation
RFQ/Auction
Send Bid
Change Vendor Data
Self Editing
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Details of Supplier Identification

• Supplier Identification
• Ability to complete Web-based registration
  process for new potetnial partners
• Customizable registration forms
• Flexible, customizable questionnaires with Web
  survey tool from SAP
• Category-dependent and category-independent
  questionnaires
• Supplier prescreening for accepting newly
  registered suppliers
• Monitoring of supply base changes
• New suppliers created in SAP Enterprise Buyer
  (mySAP SRM) (via OPI or manually)
• Supplier data change in via SAP supplier
  self-services or mySAP SRM
• Blocked suppliers

• Supplier Identification closes the loop between
  the initial search and qualification and the
  operational use of suppliers

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mySAP SRM SAP Supplier Self-Service

• WEB based, hosted application for Suppliers where
  the supplier can connect to procurers
  purchsasing modul (SRM, MM).
• Ensure functions for suppliers to set up
  purchasing documents in a close system Together
  with procurer. The possibility of overview,
  modification and set up purchsasing documents
  expanded to both operative and strategical
  processes
• Purchse Order (PO)
• SA release orders
• Advise Note (ASN)
• Confirmation
• Invoice
• Credit Note
• Invitation to Bid
• Bid
• The connection to SRM ensured by SAP Exchange
  Infrastructure (SAP XI)
• Supports the suppliers to manage and maintain
  its relevant Master data
• System user management from Supplier side
• Supplier cataloge
• Supplier master data (IBAN code, SWIFT code, VAT
  number etc.)

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Supplier Self-Services advantages

• Easy to use, customizable surface for Suppliers
• User management for suppliers Communication due
  purchseing documents (i.e. Purchase Order, Goods
  Receipt)
• Allerting function, special workplace for open
  tasks

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SAP Supplier Self-Service Start-Page
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MOL Group Business expectation Invoicing
Financial transaction requirement
- Purchase Order issue can be covered by only
orders or contracts where the SAP/SRM (partely
from MM system) uniqe ID implemented on the
documents in case purchasement of undertaking,
material, tool and services.

• Therefore those partners dont indicate the above
  detailed relevant IDs on their invoices should
  calculate that these
• invoices will be sent back without processing.

• The received invoices must fit with legally
  required forms and contents additionally the
  proof of delivery must be attached to
• the invoices. The Purchase Orders SAP/SRM/MM
  identification number must be implemented on the
  invoice!

• The relevant Purchase Order ID shoud be
  implemented in the delivery note and each goods
  receipt documents also. The
• delivered goods must be listed according the item
  numbers of the purchase order. Without these
  information the not identificable
• Invoices (w/o order orcontract ID) the Procurer
  is going to handling as a false document and it
  will be sent back without
• compensation. In this case the agreed peyment
  term begins when the missing information
  completely corrected.

If a Partner of us accomplish without receipt of
relevant Purchase Order it is doable only its
own RISK!
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Strategial partnership by SRM
Traditional way
by SRM
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Thank you for your attention!