2.1.4.3Supply Chain

Management approach

The current business and health environment is driving major changes, with risk resilience and new market and environmental standards requiring that the supply chain organization adapts and evolves. To continue the drive towards energy transition with the highest level of safety, performance and quality, the supply chain management is evolving into a strategic globalized organization. Leveraging long-term relationships with key supply chain partners will also contribute to accelerating the time-to-market objective and performance in the Win phase.

With efficient execution of projects remaining essential, SBM Offshore supply chain management is continuing its efforts to support projects locally by developing capability hubs, for example in China, India and Brazil.

The pandemic has demonstrated the value of ’framing global, acting local’ and aligning supply chain strategy with the product life-cycle. The supply chain organization contributes to SBM Offshore’s strategy as described in section 1.3.2.

2021 performance

The supply chain organization has been developed further around six strategic pillars to enhance the resilience of the function as a whole:

Supply Chain Excellence

  • Strengthening the performance of the function on a global scale and include all areas of SBM Offshore’s business ie. Projects, Operations and non-Project related business.
  • Enhancing Quality Assurance and Quality Control within Supply Chain.
  • Enhancing the effectiveness of SBM Offshore’s enterprise management processes.
  • Effective vendor performance and vendor qualification assessment to include current topics such as climate change measures, human rights and cybersecurity.
  • Set function-wide KPI’s and enhance data-driven reporting and visibility into the performance of the entire function against these KPI’s.
  • Drive key global issues such as human rights and sustainability goals within the Supply Chain community.

Strategic sourcing

  • Enhanced strategic focus during the proposal phase of SBM Offshore’s projects.
  • Increased cost-competitiveness and time-to-market by leveraging on global synergies with key vendors.
  • Co-development with key vendors on major energy transition initiatives and new technology.
  • Globalization of SBM Offshore’s strategic activities to achieve direct benefits from the strategic work done with key vendors for project tenders.
  • Enhance business alignment between SBM Offshore and its supply chain community by holding dedicated workshops and global events such as an annual Global Vendor Day.

Product focus in Supply Chain

  • Enhanced resource management on SBM Offshore’s projects to maximize utilization of skill sets.
  • Dedicated section for FPSOs and FLNGs to strengthen key post-order management activities.

Energy Transition

  • Work with key vendors to enhance technologies for carbon capture.
  • Assess Scope 3 emissions for key components on SBM Offshore’s FPSOs and work with key vendors to explore avenues to reduce emissions.
  • Enhance renewable product focus to support development of renewable energy projects.

Regional Supply Chain development

  • Leverage regional supply chain skills in centers such as Brazil (Rio de Janeiro), India (Bangalore) and China (Shanghai).
  • Diversify supply chain resources and develop talents across all regions.

Digital Transformation

  • Play a major role in the design and implementation of SBM Offshore’s migration to the new global ERP system.
  • Work with the external supply chain community to support digital-twin objectives.
  • Support the data-migration activities to enhance automated data-driven reporting and performance measurement of the function.

Performance measurements:

  • 9 Steering committee meetings organized with strategic vendors.
  • 1,599 vendors qualified under the revised qualification process since 2017, including more than 120 Chinese vendors.
  • 99.5% of vendors have signed the Supply Chain Charter.
  • 90 vendors have had their qualification renewed following satisfactory performance.
  • 65 vendors have responded to SBM Offshore supply chain organization’s new human rights assessment (more detail in section 2.1.2).

future

Next year, Group Supply Chain will continue its evolution towards being a resilient function to enhance and maintain high standards of performance across all areas of its business including, but not limited to, supporting human rights, climate change measures, digitalization, quality assurance and quality control, resource and talent management across all SBM Offshore’s centers, enterprise management systems, vendor performance and qualification assessments, and energy transition measures.