Cost Reduction in the Upstream O&G Sector

Delivering Maximum Value and Reduced Costs through Strategic Sourcing, Procurement and Supplier/Demand Management

COURSE OVERVIEW

This highly practical 2-day workshop facilitates participants to examine, develop and implement viable practical strategies on procurement of equipment, materials and services in the context of the Upstream business – which reduce costs and add value without compromising quality, supplier relationships, HSE and productivity.

COURSE OBJECTIVES

By attending this 2-day industry training workshop, participants will be able to:

• UNDERSTAND the need for more strategic and innovative SCM approaches in order to deliver maximum value at minimum cost;
• IDENTIFY opportunities within the procurement and contracting process for short and long term savings and improvements;
• DEVELOP and IMPLEMENT overall cost reduction initiatives and value realization plans;
• LEARN a range of available strategies to work with the supply chain to reduce costs in a pragmatic way;
• APPRECIATE invaluable tools and techniques on spend data analysis;
• HEAR and SEE real life examples of cost savings:.

TARGET AUDIENCES

This course is designed for all Upstream sector professionals who are interested in optimizing and reducing costs through strategic procurement and supply chain management including those with the following roles and functions:
• Procurement/Supply Chain
• Sourcing/Purchasing/Buying
• Tender or Bidding Managers
• Contract Managers
• Cost Management
• Commercial Managers
• Materials and Inventory Control
• Maintenance and Operations
• Project Engineers and Project Managers
• Finance
• Others who deal with Oil and Gas Procurement

COURSE TOPICS

DAY ONE

I. INTRODUCTION
• Defining Cost Reduction
• Cost Reduction vs. Cost Avoidance – Examples
• Direct Spend cost savings
• Indirect Spend cost savings
• “What’s in it for me?” –the key question.

II. PROCESS & PROCEDURES
• Process & Procedures – prioritising, optimising and rationalising
• Cost reduction through process mapping – Examples and Practical
• Standards and Specifications – the good, the bad and the ugly.

III. PRODUCTS
• Removal of “gold plated” Products – Case Study
• Alternative commodities review – Case Study
• Reuse, Reclaim, Refurbish, Recycle – Case Study

IV. SERVICES
• Time to service – are we ‘over servicing?’
• Resources minimisation – What do we actually need?
• Scheduling– how to optimise schedules
• Multi tasking and cross disciplines – Case study

V. MANAGING CONTRACTS
• Discounts –types and benefits – Example models
• Rebates–types and benefits – Example models
• Retendering – costs and benefits; market checks
• Re-negotiation – Group Practical
• Incentivisation – Practical

DAY TWO

VI. PROCUREMENT/PURCHASING
• Managing External Expenditure
• Outsource your tailspend – Example and Case Study
• Cooperative Procurement – Examples
• Demand Management – do we know what we really need?
• Delivery and scheduling – where and when do we really need it? Is early delivery costly?
• Negotiation skills set – what is needed? – Group Practical

VII. IMPORTANCE OF SPEND ANALYSIS
• What are you spending? How much? With who?
• On what?
• By whom?
• Reducing, consolidating, de-specifying, collaborating – Examples and Practical
• Curbing maverick spend – the internal problem
• Supplier rationalisation – Practical

VIII. INVENTORY MANAGEMENT
• Spares and parts – the necessary and the overkill – Releasing unused asset value
• Secondary market – sell those spares – Examples
• Secondary market – buy those spares – Examples

IX. TOOLS and TECHNIQUES
• Spend Analysis
• Whole Life Cost
• Contract/Supplier Criticality
• Supplier Positioning
• ‘Should” Cost models
• Cost Analysis
• Purchase Price & Cost Analysis Models
All the above demonstrated as examples/case studies with participants interactive practicals

Duration: 2 Days

Cost:£495 + VAT

Cost Reduction Training Scotland, England and onsite anywhere in the UK and Internationally.