Supplier performance management : vendors based in Bangladesh

Abstract

In the oil and gas industry the amount of work that is outsourced is overwhelming. The success and achievements for any company following that strategy depends heavily on the operational excellence of the third party suppliers and contactors who are catering to the company. Even though it has been a global phenomenon to depend on the suppliers who can keep up with the company policy and maintain the scope of work, Bangladesh being a developing country has a long way to go before the local suppliers can reach that height of excellence. Chevron Bangladesh deals with a number of suppliers from different backgrounds and sizes. It makes more business sense for them to source the materials from the local market. This strategy will reduce cost, lead time and local vendors will be benefited, boosting the local economy and give rise to a new industry within the nation. That being said, the companies like Chevron have a higher and sophisticated standard for safety, operational excellence and reliability. These traits are intangible and take time and awareness to grow. The first step to improve the local suppliers is to locate the GAP. The SPM form developed through this report will be able to give a procurement professional to gather a bird’s eye view of a supplier’s major area of improvement and find the trend to work on. The form has very articulated Key Performance Indicators that way the measurement is to the point and numerical values can be added .After the GAP has been located; it is a matter of strategy to work closely with the supplier and improve the supplier’s scenario as a whole. As a part of the improvement process for suppliers there can be a number of steps that can be taken based on the particular company’s business needs. If the local vendors want to compete in the global market and give birth to new potentials of wealth in the nation, they will have to upgrade technologically, maintain the international standard for safety and professionalism, technological innovation and process engineering.