Knowledge Management

...

Database for qualified Contractors : Other thing required is to create a data base which is accessible by operation and procurement for qualified / approved contractors for particular service. We have couple of options do this, 1 ) Create an excel spreadsheet for this database and save it on share drive 2) Create a sophisticated database application in lotus note and provide access to those who required 3) Modify SAP vendor master to flag Vendor as “ Service Contractor” and assigned services they are approved for.

Create a Service Master : We need to create a service master with detail description of service and service code assigned to each service. We can also create a database that reflects a service consist of several activities , each activities reflect a sub- services with service code assigned to it. This allow us to create a purchase order for one task that consist of several activities. This can be done by updating SAP system. This will help us to pull historical data that can be using for forecasting, negotiation and supplier evaluation purpose.

Recommendations and Implementation :

I would recommend all of the above to make service procurement efficient.

Implementing Service Procurement Policy : This will bring all stake holders on the same platform and increase understanding of each other’s expectation. Best of this is, it will provide opportunity to procurement department to evaluate and negotiate cost.

Preparing Qualified contractor database : As I am proposing to modify SAP to create service master, I would suggest 3rd alternative , modifying vendor master to reflect flag for vendor as “Service contract”. This will also help us to analyze Service spent for strategize procurement.

Creating Service Master : With this we will be able to optimize use of SAP system. I know there will be some maintenance cost associated with this but benefits are huge.

Considering low activity period, I propose to start this project in May 2014 and target to complete it by end of the year. Attached schedule is self-explanatory for implantation plan.

Stake holder team , I would suggest will consist of personals for Procurement, Finance, Operation, Maintenance , Health and Safety, IT group and representative for SAP who is administering our current SAP system. This schedule can be revised based on how much time SAP modification required, which will be figure out during meeting with SAP group on July 1 2014.

Monitor and Control :

After this system is implanted , Several monthly reports need to be generated in order to track success of the system and look into further improvement opportunity. Some of the reports number hours invoiced each month for each service, Number services performed during the period. This will help us to track total number of hours and also reduction in number of purchase orders due to frame work order.

After completion of two year, we can have report that compares hourly rate for services with last year’s hourly rate and volume. This will help us to strategize Negotiation.

Now I would request you to review and approve this proposal.