HO CHI MINH CITY OPEN UNIVERSITY UNIVERSITÉ LIBRE DE BRUXELLES SOLVAY BRUSSELS SCHOOL OF ECONOMICS & MANAGEMENT MBQPM5 NGUYEN NGOC MI NH NGUYET I N V E S TI G AT I O N O F TH E T O T AL SU PP L Y C H AI N I S S U E S AT LAM SON JOC MASTER FINAL PROJECT MAST ER IN BUSINESS QUALITY AND PERFORMANCE MAN AGEME NT HO C HI MINH CIT Y (2016) S TA T E M E N T O F O R I G I N A L I T Y I, Nguyen Ngoc Minh Nguyet, hereby certify to be the author of this master final project report, which was written under the mentorship of Professor Jacques Martin The report is submitted as part of the requirement for the award of Master in Business Degree of Quality Performance Management, is wholly my own work unless otherwise referenced or acknowledged Signature: Print name: Date: Nguyen Ngoc Minh Nguyet 12 April 2016 ACKNOW LEDGEMENTS This report has never come to be without excellent guidance and supports I would like to acknowledgement the helpful advices and comments of who gave me the possibility to complete this First and foremost, I offer my sincerest gratitude to Professor Jacques Martin; he has shown me the way through his knowledge and motivation while keeping me on track in completing this report This report contains the views, opinions, guidance of my co-workers particular the interview participants who provided freely of their time and though; I truly appreciate their efforts and sincerely thank them all My sincere gratitude also goes to my Bosses who have shared their valuable expertise and industry knowledge with me I am grateful to my company for giving the opportunities to study this program Especially, I would like to thank my family, my husband, and my two little sons who encouraged and fully supported me during my studying time ACCEPTANCE OF FINAL PROJECT REPORT FOR DEFENSE Mr/Ms NGUYEN NGOC MINH NGUYET’s final project report for the degree of Master in Business Quality and Performance Management is officially accepted for defense On 13 April 2016 Dr Jacques M.A Martin Academic Director Master in Business Quality and Performance Management Solvay Brussels School of Economics and Management – Ho Chi Minh City Open University TABLE OF CONTENTS INTRODUCTIONS 1 INTRODUCTION OF THE SUBJECT OBJECTIVES 3 METHODOLOGY 4 LIMITATIONS REPORT STRUCTURE PART1 TOTAL SUPPLY CHAIN MANAGEMENT PROCESS AT LAM SON JOC CHAPTER 1: THE CONTEXT OF SUPPLY CHAIN MANAGEMENT DEFINITION THE IMPORTANT OF SUPPLY CHAIN MANAGEMENT 12 CHAPTER 2: PROJECT OVERVIEW 14 COMPANY PROFILE 14 CORPORATE CONTEXT 16 THE TOTAL SUPPLY CHAIN AT LAM SON JOC 19 PART 2: THE TOTAL SUPPLY CHAIN MANAGEMENT INVESTIGATION AND RECOMMENDATIONS 22 CHAPTER 1: THE TOTAL SUPPLY CHAIN ISSUES ANALYSIS 22 SPECIFYING REQUIREMENT AND PLANNING SUPPLY 22 ANALYSING SUPPLY MARKETS 29 DEVELOPING SUPPLY STRATEGIES 35 APPRAISING & SHORTLISTING SUPPLIERS 41 OBTAINING & SELECTING OFFERS 49 NEGOTIATING 57 PREPARING THE CONTRACT 61 MANAGING THE CONTRACT 65 MANAGING LOGISTIC & INVENTORY 70 10 MEASURING AND EVALUATING PERFORMANCE 77 CHAPTER 2: RECOMMENDATIONS FOR IMPROVEMENTS 81 MAXIMIZE LOCAL CONTENT STRATEGY 81 DEVELOP AN E-PROCUREMENT STRATEGY 82 PROMOTE GROUP PURCHASING 84 UTILIZE QUALITY & SUPPLY MANAGEMENT TOOLS 85 CONCLUSIONS 92 REFERENCE 95 APPENDIX A: LAM SON JOC - SR/PR PREPARATION WORK FLOW 98 APPENDIX B: LAM SON JOC - PURCHASING WORKFLOW 99 APPENDIX C: LAM SON JOC - OVERALL CONTRACT STRATEGY TEMPLATE 100 APPENDIX D: LAM SON JOC - PROCUREMENT FORM 104 GLOSARY Bbl Barrel (1 barrel = 35 imperial gallons approximately) CIT Corporate Income Tax CPM Critical Path Method DD Dong Do DO Delivery Order E&P Exploration & Production ECV Estimated Contract Value EPCI Engineering Procurement Construction and Installation EVA Economic Value Added FCWT Foreign Contractor Withholding Tax FPSO Floating Production Storage and Offloading H2S Hydrogen Sulfide LSJOC Lam Son Joint Operating Company MCM Management Committee Meeting NOC National Oil Company O&G Oil & Gas Industry PC Petroleum Contract PO Purchase Order PR Purchase Request PVEP Petro Vietnam Exploration and Production PVN Petro Vietnam RFP Request for Proposal SCM Supply Chain Management SoW Scope of Work TdC Tender Committee TL Thang Long VTSB Vung Tau Supply Base WHP Wellhead Platform WO Word Order L I S T O F F I G U R ES Figure1: Report Structure Figure 2: Supply Chain Management Figure 3: Lam Son JOC - Blocks 01/97&02/97 Location Map Figure 4: Lam Son JOC - Preliminary Field Layout Figure 5: Lam Son JOC - SWOT analysis Figure 6: Lam Son JOC - PESTEL Analysis Figure 7: Lam Son JOC - Porter Five Forces Figure 8: Lam Son JOC - Total Supply Chain Figure 9: Purchase Specification Figure 10: P-D-C-A Cycle Figure 11: Supply Positioning Model Figure 12: Lam Son JOC - Supply Positioning Model Figure 13: The Four Quadrants Items - Supply Positioning Model Figure 14: Life Cycle Cost Analysis Figure 15: Negotiation Cycle Figure16: Supplier Perception Model Figure 17: Various levels of objectives Figure 18: Scheduling – based on a “bottom up” process Figure 19: Gantt (bar) chart Figure 20: Lam Son JOC - Receive Flowchart Figure 21: PDCA Cycle Figure 22: Supply Position Model Figure 23: Risk Matrix Figure 24: Ishikawa Diagram Figure 25: Mind mapping - Summary of report 104 APPENDIX D: LAM SON JOC - PROCUREMENT FORM 105 106 107 108 109 110 111 112 113 114 115 116 117 118 [...]... will become the foundation of the development of the research framework and proposed recommendation for the improvement ü Conclusions o Summary of the investigation for what can be done in the future to improve the supply chain management based on the highlighted issued 9 PART1 TO TAL SUPPLY CHAIN MANAGEMEN T PROCESS AT LAM SON JOC To understand the total supply chain of Lam Son JOC, the author would... Introduction: o Introduce the report, the purpose of the report, methodology, and limitations ü Part 1: o A general introduction to Lam Son JOC as a company and the project owner o An overview of the corporate context and the total supply chain process of the Company ü Part 2: 8 o Investigate the total supply chain process of Lam Son JOC; address the issues on the current challenges of the process o Findings from... select appropriate improvements in each stage of the total supply chain process The recommendation was developed based upon the issues findings through the investigation The major objectives of this report are: ü An overview of Lam Son JOC total supply chain process ü Identify main challenges /issues that the Company is facing now ü Study the challenges /issues and recommend the most appropriate solution... for better improvement of the system will be presented accordingly 3 2 OBJECTIVES The aim of the paper focuses on investigation and analyzing the total supply chain process of Lam Son JOC to make suggestion for improvement of effectiveness and efficiency of the current total supply chain as to promote the competitiveness of Lam Son JOC through the more success process management The report aims to assist... within the supply chain, for the purposes of improving the longterm performance of the individual companies and the supply chain as a whole (Mentzer, J.T.; et al (2001) ü A customer-focused definition is given by Hines (2004): "Supply chain strategies require a total systems view of the links in the chain that work together efficiently to create customer satisfaction at the end point of delivery to the. .. Figure 7: Lam Son JOC - Porter Five Forces 3 THE TOTAL SUPPLY CHAIN AT LAM SON JOC "The oil supply chain is also known to be a very complex chain compared to other industries" (Jenkins & Wright, 1998; Hussain, Assavapokee & Khumawala, 2006) To describe the process required to supply equipments, materials and other resources required to carry out Lam Son JOC' s work, below is the total supply chain process... occurs through the total supply chain process of Lam Son Joint Operating Company - an exploration and production oil and gas Company, then, give recommendations to improve the effectiveness and efficiency of the supply chain management The report tries to incorporate many different aspects of supply chain management that can be further develop to a framework for the proposed supply chain process for... aspect Therefore, the analysis and the recommendations are only specifying on general management aspect The report will only cover the investigation of the total supply chain management process of Lam Son Joint Operating Company – an exploration and production oil & gas Company To leverage the limitation, a further development of the report could be used as the general framework for supply chain management... system is an integration system in the organization To improve the current supply chain process in Lam Son JOC we need to have a basic understanding of Lam Son JOC s supply chain process by describing, highlighting, and analyzing the issues of each stage that would make us have an overall picture for all the issues that the Company is facing now Moreover, based on that, recommendations to solve for... Managing the Contract 9 Managing Logistic & Inventory 10 Measuring & Evaluating Performance Figure 8: Lam Son JOC - Total Supply Chain For the whole chain of the current SCM, every stage the Company has challenges; the author will analysis the highlighted issues in each stage, which the Company is facing now 21 The starting point of the analysis is necessary to understand of the objective of SCM in Lam Son