Investigation of the total supply chain issues at lam son joc

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 Tai Lieu Chat Luong 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