i PRAISE FOR COLLABORATIVE PRINCIPLES FOR BETTER SUPPLY CHAIN PRACTICE “This is a very timely publication given the changing nature of the oil and gas industry and with the onset of the fourth industrial revolution We need to continually reassess our supply chain practices, learning from other industries, adopting new ways of thinking, and maximizing our collaboration to ensure the sustainability and viability of our own sector Norman McLennan’s book provides some powerful insight into the latest supply chain practices and it is a great guide for supply chain professional across the energy sector.” Professor Paul de Leeuw, Director, Oil and Gas Institute, Robert Gordon University, UK “Against the backdrop of changing working styles, the impact of data, the quest for innovation, value and the speed of change, the importance of supply chains has never been higher McLennan’s timely publication gives private and public organizations the collateral to refresh and reframe their approach towards realizing better supply chain practice It provides context, the why, the how, real examples and potential structures to enable positive outcomes for all parties Now is the time to embrace change and take your business forward, and this is the guide to assist you in unleashing the power of collaboration.” Antony Faughnan MBA, FCIPS, Program Director, Arcadis, UK “Norman has a plethora of experience to share on how to bridge both internal and external stakeholders’ divides and build relationships within the supply chain which moved away from Michael Porter’s ‘balance of power’ paradigm to one of collaboration and true win-win relationships to improve the whole, rather than favour the few The concept of collaboration in any supply chain venture is not new, but practitioners are often stymied in their efforts to move away from more traditional (and human!) adversarial relationships This book explains in a knowledgeable and engaging way why collaboration is of such value, what true collaborative principles look like and how to achieve them.” Dr Orietta Fioroni, Business Transformation Leader and former Operational Excellence Coach, Deloitte, UK ii “Domestic and international projects across various sectors continue to overrun on original cost and schedule The definition of insanity is ‘doing the same thing over and over again and expecting a different result’ Projects across the globe that focused on collaborative relationships have broken that mould and delivered step change results in terms of cost and schedule which traditional execution models have not Norman, based on his extensive practitioner experience, leading and creating collaborative relationships, has provided insights and clarity on how such relationships can be achieved and the benefits this can bring to all participants.” Peter A Jessup, Former Group VP SCM and CEO Proactive Change LLC, USA “Collaboration is increasingly being applied by supply chain companies as the fastest and most effective means to enact strategic change – whether to grow faster, to diversify, to apply new technologies or to export Norman McLennan’s focus on this important area in this book is therefore timely and resonates loudly with all stakeholders A must-read for business leaders.” Stuart R Broadley, Chief Executive Officer, EIC (Energy Industries Council), UK “Against the backdrop of changing working styles, the impact of data, the quest for innovation, valu and the speed of change, the importance of supply chains has never been higher McLennan’s timely publication gives private and public organizations the collateral to refresh and reframe their approach towards realizing better supply chain practice It provides context, the why, the how, real examples and potential structures to enable positive outcomes for all parties Now is the time to embrace change and take your business forward, and this is the guide to assist you in unleashing the power of collaboration.” William Gingles, former underwriting executive, Lloyds of London iii Collaborative Principles for Better Supply Chain Practice Value creation up, down and across supply chains Norman K McLennan iv Publisher’s note Every possible effort has been made to ensure that the information contained in this book is accurate at the time of going to press, and the publisher and authors cannot accept responsibility for any errors or omissions, however caused No responsibility for loss or damage occasioned to any person acting, or refraining from action, as a result of the material in this publication can be accepted by the editor, the publisher or any of the author First published in Great Britain and the United States in 2019 by Kogan Page Limited Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licences issued by the CLA Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned addresses: 2nd Floor, 45 Gee Street London EC1V 3RS United Kingdom c/o Martin P Hill Consulting 122 W 27th Street New York, NY 10001 USA 4737/23 Ansari Road Daryaganj New Delhi 110002 India © Norman K McLennan 2019 The right of Norman K McLennan to be identified as the author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988 ISBN E-ISBN 978 7494 8049 978 7494 8050 British Library Cataloguing-in-Publication Data A CIP record for this book is available from the British Library Library of Congress Cataloging-in-Publication Control Number 2016046148 Typeset by Integra Software Services Pvt Ltd., Pondicherry Print production managed by Jellyfish Printed and bound in Great Britain by CPI Group (UK) Ltd, Croydon CR0 4YY v To my family – my wife Alison, my three children Holly, Stewart and Lucy, my late parents Kenneth C McLennan and Audrey N McLennan and also to my sisters Pamela and Mary for the guidance and encouragement shown to me throughout my life vi THIS PAGE IS INTENTIONALLY LEFT BLANK vii Co n te n ts About the author xiii Preface xv Acknowledgements xxi How to use this book xxiii Pa r t O n e Knowledge architecture around collaboration (the jewel in the crown) 01 Introduction: The rationale for collaborative business practices across supply chains and why collaboration can be the jewel in the crown for organizations 02 Collaborative arrangements: Different supply chain perspectives, drivers and interdependencies 23 Customer profiling 28 Contractor landscape analysis for awareness of interdependencies across the supply chain 31 03 Raising the game – the CRAFT Stage Life Cycle Model and ISO 44001: The evolution and emergence of a new global standard for collaborative working 37 Trends in organizational thinking and the pace of change 38 How to collaborate 38 Stage 1: Operational awareness 41 Stage 2: Knowledge 43 Stage 3: Internal assessment 44 Stage 4: Partner selection 46 Stage 5: Working together 47 Stage 6: Value creation 50 Stage 7: Staying together 50 Stage 8: Exit strategy activation 52 Conclusion 54 viii Contents 04 The importance of stakeholder engagement in harnessing the benefits of collaborative working practices 55 Step 1: Identify stakeholders 66 Step 2: Analyse issues and reputation 70 Step 3: Set engagement objectives 71 Step 4: Action plan for engagement 72 Step 5: Evaluation plan 74 The tools and templates 75 Conclusion 86 05 Pan-industry supply chain collaboration: An exemplar of solutions developed by and for the industry 89 Industry context 89 The application of good principles to address stormy waters 99 Stage 1: Planning 101 Stage 2: Contracting 102 Stage 3: Perform and pay 129 Conclusion 129 06 Commercial risk and pricing considerations associated with collaborative versus traditional contracting arrangements 131 Limitation of risk associated with different contract pricing or remuneration regimes 135 Understanding contractor or supplier risk 138 The joint alliance steering group concept versus more adversarial contractual provisions to safeguard against failure or default 139 Pa r t T w o Case studies of exemplar historical collaborative practice 143 07 Case study 1: The Team Marine story – putting logic back into logistics 145 Background history 146 Why change? 146 Contents The facts 148 Obstacles encountered and how they were overcome 150 Cost allocation and management mechanisms jointly developed, and the benefits of Team Marine 151 Scale of combined activity, and the benefits and results achieved under Team Marine 152 Why the Team Marine initiative succeeded: Core shared belief system and principles 153 Concluding reflections 154 08 Case study 2: Captain – the impossible dream 157 Background history 157 The post-licence award challenge 158 Resilience and the development of new technology 159 Unconventional and unorthodox project route achieved through collaboration 160 Formation of a new collaborative contractor consortium 161 A novel fast track project approach 161 Piecing together the jigsaw 163 Conclusion 164 09 Case study 3: Building supply chain functional excellence through collaboration with internal partners 165 Background 166 A new style of leadership 167 Initial diagnostic 168 Structured methodology 169 A new vision for PSCM excellence through joined up collaborative thinking and business interface 180 Conclusion 186 10 Case study 4: Envoi – value creation through collaborative outsourcing of acquisition and divestment in the upstream E&P sector 187 A&D statistics 188 The keys to successful specialist consultant collaboration 189 The value of specialist consultants 192 Project development and execution process 193 A&D outsourcing collaboration: Case studies 195 ix 258 Further Reading Hawkins, DE (2006) Corporate Social Responsibility: Balancing tomorrow’s sustainability and today’s profitability, Palgrave Macmillan, London Hawkins, DE (2006) The Bending Moment: Energizing corporate business strategy, Palgrave Macmillan, London Hawkins, DE (2013) Raising the Standard for Collaboration: Harnessing the Benefits of BS 11000 collaborative business relationships, The BSI Standards Limited Hawkins, DE and Shan, R (2005) Sun Tzu and the Project Battleground: Creating project strategy from ‘the art of war’, Palgrave Macmillan, London Humphries, A and Gibbs, R (2010) Collaborative Change: Creating high performance partnerships and alliances, SC: CreateSpace Independent Publishing Platform, Amazon International Standards Organization (ISO) (nd) ISO 44001: Collaborative business relationships standard, The BSI Standards Limited Lank, E (2005) Collaborative Advantage: Organisations win by working together, Palgrave Macmillan, London Lipnack, J and Stamps, J (1997) Virtual Teams: Reaching across space, time, and organizations with technology, John Wiley & Sons, New York LOGIC (2018) Leading Oil and Gas Industry Competitiveness: Part of Oil & Gas UK Industry Association, Aberdeen and London Partnership Sourcing Future Connections Partnership Sourcing Vision 2010 Springer, ML and de Bock, J (2005) Sustainable Logistics and Supply Chains: Integral approach, European Commission, Brussels Springer, MJS (2014) Enabling Horizontal Collaboration, Briefs in Operational Research series, Springer, New York Tate, W (2009) The Search for Leadership: An organisational perspective, Triarchy Press, Devon Tompkins, JA (2003) No Boundaries: Break through to supply chain excellence, Tompkins Press, NC Waller, A (2018) Collaboration Across Supply Chains: Case studies on working together for sustainable business performance, Kogan Page, London Useful websites Association for Project Management: https://www.apm.org Association of Cost Engineers: https://www.acoste.org.uk/ Chartered Institute for Procurement and Supply: https://www.cips.org.uk East of England Energy Group(contractor trade association): https://eeegr.com/ Energy Industries Council: https://the-eic.com Institute for Collaborative Working: www.instituteforcollaborativeworking.com/ Further Reading International Institute for Advanced Purchasing and Supply: www.iiaps.org/ Northern Offshore Federation Energy (contractor trade association): https://www.nofenergy.co.uk Oil & Gas Technology Centre: https://theogtc.com/ Oil & Gas UK: https://oilandgasuk.co.uk/ Robert Gordon University, Aberdeen: https://www.rgu.ac.uk/ Royal Institution of Chartered Surveyors: https://www.rics.org/ 259 260 THIS PAGE IS INTENTIONALLY LEFT BLANK 261 INDEX A&D see acquisitions and divestments Stage Life Cycle Model see CRAFT Stage Life Cycle Model ability and leadership 16–18 acquisitions see acquisitions and divestments; mergers and acquisitions acquisitions and divestments (A&D) Africa case study 199–200 consultants 189 Envoi case study 187–204 failure 202–204 marketing 190–192, 203–204 North Sea case study 195–199 outsourcing 195–203 planning 190 project development and execution process 193–195 statistics 188–189 success 200–202 action planning 72–74 ‘ACX’ case study 165–186 background 166–167 business interface 182 capability building 178–179, 181 demand planning 174 gap analysis 171, 175–176 initial assessment 168 key contracts 174–175 leadership 167–168 new vision 180–186 Pareto analysis 175–178 phased benefits 183 structural building 178–180 structured methodology 169–180 value realization 184 adoption of ISO 44001 57–59 Advanced Registration/Capability Profiles 112–114 Africa ‘ACX’ case study 165–186 Envoi Case study 199–200 alignment, stakeholder engagement 63 alliances 19–20, 60, 145–155 AMI see area of mutual interest analysis contractor landscapes 31–35 issues 70–71 reputation 71, 77–78 risk 11–13 arbitration 14–15 architectures of stakeholders 67–68 area of mutual interest (AMI) assessment internal 44–45 leadership 16–18 reputation 71, 77–78 risk 11–13 attitude and leadership 16–18 attractiveness profiling 28–31 attributes of relationships automation in IT procurement 243–245, 250–251 basic supplier capability Gantt charts 112–114 benchmarking 58, 119–120, 126, 128 benefits of ISO 44001 57–59 Team Marine case study 151–153 best practice pharmaceuticals supply 238 UK oil and gas 99–129 big data, oil and gas exploration 228 biomedical life sciences case study 231–240 background 232 good supply practices 238 methodology 233–235 perceived challenges 233 results 235–239 bottleneck relationships 24–25 business interface, ‘ACX’ case study 182 bystanders 69 capability building, ‘ACX’ case study 178–179, 181 capability Gantt charts 112–114, 124 Captain project case study 157–164 consortium 161–164 drivers 158–161 fast track approach 161–162 funding 160–161 obstacles 158–159 capturing feedback 121–125 categories of stakeholders 61–62 262 Index Central Communities Investment Fund (CIF) 209 certification 59 challenges see obstacles checklists, readiness 9–10 CIF see Central Communities Investment Fund client/contractor landscape of UK oil and gas 90–93 clients perspective of 23–25 profiling 28–31 collaborative frameworks 19 principles 38–41 see also CRAFT Stage Life Cycle Model commercial risk 131–141 see also risk commodities planning & forecasting 211–212 commonality 57 competitive tendering 134 compliance, food aid case study 209–210 composite rates 135, 137 confidentiality 63 consortia, Captain project 161–164 consultants keys to success 189 value of 192–193 continuing relationships 50–52 contracting debriefing and feedback 105–106, 114–128 FPAL 100–102, 108–128 industry mutual hold harness deeds 104–105 LOGIC model forms 102–104, 115 master deeds 106–107 negotiation 134–135 performance profiles 114–128 pre-qualification 108–128 remuneration mechanisms 135–138 tendering documentation 104 UK oil and gas reforms 102–128 contractor landscape analysis 31–35 contractors consortia 161–164 perspective of 26–27 risk 138–139 core/strategic relationships 26–27 corporate social responsibility (CSR) 6–7 corruption 210 Cost Reduction Initiative for the New Era (CRINE) 95–97, 145–155 costs, UK oil and gas 95–97 CRAFT Stage Life Cycle Model 37–54 exit strategy activation 52–54 internal assessment 44–45 ISO 44001 integration 40, 195 knowledge 43–44 operational awareness 41–42 partner selection 46–47 principles 38–41 staying together 50–52 value creation 50, 195 working together 47–49 CRINE see Cost Reduction Initiative for the New Era critical relationships 23–25, 174–175 cross-partnership development areas 20 CSR see corporate social responsibility culture 10, 13–16, 153–154 customer journey 251 customer profiling 28–31 day rates 135, 137 deal psychology 191 debriefing in UK oil and gas sector 105–106 default risk management 139–141 demand planning 174 Democratic Republic of the Congo (DRC) case study 207–221 background 207–208 challenges 209–210 commodities planning, forecasting & funding 211–212 distribution 217–219 needs 210–211 transportation 208–209, 213–216 warehousing 217 deselection of suppliers 112 desired reputation 78 development relationships 26–27 development of stakeholder engagement programmes 64–75 digital procurement 241–255 automation 243–245, 250–251 KnowledgeBus/KnowledgeKube 245 online marketplaces 250 Probrand 241–245 Progora 242–243, 246–254 public sector 251–254 transformation 249 universities 253–254 digital transformation 249 direct negotiation 134 disengagement 15, 52–54 disputes 14–15 distribution collaboration 217–219 DRC see Democratic Republic of the Congo drivers of collaboration 60, 94–99 Captain project case study 158–161 Team Marine case study 146–150 Index embedding procurement 252–253 engagement levels of 78–80 objectives 71–72, 74–75 platform selection 80–82 relationship building template 85 relationship management 6–7 reputation risk response plan 84 road map template 86 stakeholders 55–87 action planning 72–74 ‘ACX’ case study 168–178 development process 64–75 evaluation plans 74–75 generic guide 65 identification 66–70 issues analysis 70–71 key performance areas 74–75 mapping 68–69 minimum requirements 62–63 objectives 71–72, 74–75 pharmaceuticals case study 233–239 quality standards 63 relationship/health reviews 69–70, 75–77, 83 environments and stakeholders 62 Envoi case study 187–204 African project 199–200 North Sea project 195–199 project development and execution process 193–195 European Utilities legislation 97–98 evaluation plans, stakeholder engagement 74–75 exit strategy activation 52–54 exploitable relationships 26–27 exploration and production (E&P) ‘ACX’ case study 165–186 Captain project 157–164 Envoi case study 187–204 failure 11, 139–141 acquisitions and divestments 202–204 project marketing 203–204 failure mode analysis 235–238 fast track approach, Captain project 161–162 feedback data capture 121–125 on failed bids 105–106 performance profiles 114–128 Field Trial Programmes in OGTC 226 First Point Assessment (FPAL) 100–102, 108–128 capability Gantt charts 112–114, 124 performance profiles 114–128 purposefulness 110–111 fit-for-purpose structures 47–49, 169–180 Flightshare 106 floating production, storage and offloading vessels (FPSO) 161–164 fluctuations in oil prices 93, 94 followers 69 Food for the Hungry case study 207–221 background 207–208 challenges 209–210 commodities planning, forecasting & funding 211–212 distribution 217–219 needs 210–211 transportation 208–209, 213–216 warehousing 217 FPAL see First Point Assessment FPSO see floating production, storage and offloading vessels funding, Captain project 160–161 funnel concept, tendering 123 gap analysis, ‘ACX’ case study 171, 175–176 gas and oil sector 89–130 ‘ACX’ case study 165–186 big data 228 Captain project 157–164 client/contractor landscape 90–93 collaboration drivers 94–99 contracting 102–128 CRINE initiative 95–97 debriefing and feedback 105–106 duplication elimination 106–108 FPAL 100–102, 108–128 industry context 89–93 industry mutual hold harness deeds 104–105 LOGIC model forms 102–104, 115 operating costs 95–97 performance profiles 114–128 perform and pay 129 Piper Alpha disaster 98–99 planning 101–102 pre-qualification 108–128 robotics development 228 sector dynamics 92–93 Supply Chain Code of Practice 99–129 Team Marine case study 145–155 Technology Centre case study 223–229 good supply practices 238 governance, public sector 252 governance frameworks, stakeholders 67–68 guaranteed maximum price (GMP) contracts 135–136, 138 health reviews, stakeholder relationships 69–70, 76–77, 83 helicopter transportation 91–93, 106 263 264 Index Helimet 108 high-level structure, ISO 44001 39 humanitarian relief case study 207–221 background 207–208 challenges 209–210 commodities planning, forecasting & funding 211–212 distribution 217–219 needs 210–211 transportation 208–209, 213–216 warehousing 217 hybrid payment regimes 135–136, 138 Icomm Technologies 243 ICW see Institute for Collaborative Working identification of stakeholders 66–70 IMHH see industry mutual hold harness deeds impact risk assessment 13 incentivized contracts 135, 138 indicators for collaboration indirect negotiation 134 industry context for UK oil and gas 89–93 industry mutual hold harness deeds (IMHH) 104–105 influencers 69 initial engagement 46–47 Institute for Collaborative Working (ICW) 38 integration, stakeholder engagement 63 intellectual property 59 internal assessment 44–45, 168 internal partnering case study 165–186 see also ‘ACX’ case study ISO 44001 37–54 benefits of adoption 57–59 certification 59 high-level structure 39 principles 38–41 value gains 60, 195 see also CRAFT Stage Life Cycle Model issues analysis 70–71 John Shaw drilling rig 160 joint alliance steering groups 139–141 joint relationship management plans (JRMP) 49 joint ventures 19–20, 60 JRMP see joint relationship management plans key contracts, ‘ACX’ case study 174–175 key performance areas (KPAs), stakeholder engagement 74–75 knowledge, CRAFT Stage Life Cycle Model 43–44 KnowledgeBus/KnowledgeKube 245 KPAs see key performance areas landscape analysis 31–35 leadership 16–18, 45, 139–141, 167–168 leading oil and gas industry competitiveness (LOGIC) 94–95 model forms 102–104, 115 tendering documentation 104 levels of engagement 78–80 leverage relationships 24–25 liability 104–105 limiting risk 135–138 liquidated damages 140 LOGIC see leading oil and gas industry competitiveness Lord Cullen Enquiry 98–99 lump sum payment 135–136 M&A see mergers and acquisitions management fees 135 mapping stakeholders 68–69 marketing acquisitions and divestments 190–192, 203–204 failure 203–204 Master Deeds 106–107 memorandum of understanding (MOU) Mercato 242–243, 246–254 mergers and acquisitions (M&A) MOU see memorandum of understanding negotiation 134–135 non-intrusive inspection (NII) technologies 228 nuisance relationships 26–27 objectives of stakeholder engagement 63, 71–72, 74–75 obstacles biomedical life sciences/ pharmaceuticals 233 Captain project 158–159 humanitarian relief case study 209–210 Team Marine case study 150 Official Journal of the European Communities (OJEC) 97–98 OGTC see Oil and Gas Technology Centre oil and gas sector 89–130 ‘ACX’ case study 165–186 big data 228 Captain project 157–164 client/contractor landscape 90–93 collaboration drivers 94–99 contracting 102–128 CRINE initiative 95–97 Index debriefing and feedback 105–106 FPAL 100–102, 108–128 industry context 89–93 industry mutual hold harness deeds 104–105 LOGIC model forms 102–104, 115 operating costs 95–97 performance profiles 114–128 perform and pay 129 Piper Alpha disaster 98–99 planning 101–102 pre-qualification 108–128 price volatility 93, 94 robotics development 228 sector dynamics 92–93 Supply Chain Code of Practice 99–129 Team Marine case study 145–155 Oil and Gas Technology Centre (OGTC) 223–229 background 223–224 current programmes 226–228 value creation 224–226 oil price fluctuations 93, 94 OJEC see Official Journal of the European Communities online marketplaces 250 operating costs, UK oil and gas 95–97 operational awareness 41–42 opportunistic arrangements 19 opportunities 11 organizational thinking trends 38 outsourcing 59 acquisitions and divestments 195–203 Envoi case study 187–204 pan-industry collaboration 89–130 see also oil and gas sector parent company guarantees 140 Pareto analysis 175–178 partner fit triangle 20–21 partnering 19–21, 46–47 drivers 60 humanitarian relief case study 211–219 internal 165–186 joint steering groups 139–141 negotiation 134–135 pricing mechanisms 135–138 risk 131–141 partner selection 46–47 PDEP see project development and execution process performance bonds 140 performance feedback profiles 114–128 benchmarking 119–120, 126, 128 data capture 121–125 perform and pay 129 personnel on board (POB) monitoring 107–108 perspectives 23–35 clients 23–25 contractor landscape analysis 31–35 contractors/suppliers 26–27 customer profiling 28–31 pharmaceuticals case study 231–240 background 232 good supply practices 238 methodology 233–235 perceived challenges 233 results 235–239 phased benefits, ‘ACX’ case study 183 Piper Alpha disaster 98–99 planning acquisitions and divestments 190, 200–202 UK oil and gas reforms 101–102 POB see personnel on board monitoring port operations coordination 214–217 positioning collaborative 18–20 of stakeholders 68–69 post-license award, challenges 158–159 pre-qualification 108–128 pricing mechanisms 131–132, 135–138 probability of risk 13 Probrand 241–245 procurement automation 243–245, 250–251 customer journey 251 digital, case study 241–255 embedding 252–253 KnowledgeBus/KnowledgeKube 245 online marketplaces 250 Probrand 241–245 Progora 242–243, 246–254 public sector 251–254 strategic 253 transformation 249 universities 253–254 procurement and supply chain management (PCSM) 165–186 demand planning 174 gap analysis 171, 175–176 key contracts 174–175 KnowledgeBus/KnowledgeKube 245 Pareto analysis 175–178 see also ‘ACX’ case study profiling, customers 28–31 Progora 242–243, 246–254 project development and execution process (PDEP) 193–195 public sector procurement 251–254 purchasers, UK oil and gas industry 100–102 265 266 Index readiness checklist 9–10 reimbursable contracting 135–136 relationship building template 85 relationship health 69–70, 76–77, 83 relationship management plans (RMP) 44, 49 relationship reviews, stakeholders 69–70, 75–77, 83 relationships attributes 8 continuing 50–52, 59 contractor landscape analysis 31–35 customer profiling 28–31 disengagement 52–54 drivers of 60 fit-for-purpose structures 47–49 indicators 8 leadership 16–18, 139–141 management 4–7 negotiation 134–135 partner fit triangle 20–21 partner selection 46–47 positioning 18–20 pricing mechanisms 135–138 risk 11–13, 131–141 supply chain management 34–35 types of 23–28, 60, 134 reputation analysis 71, 77–78 reputation risk response plans 84 retention monies 140 risk 131–141 assessment 11–13 contractors/suppliers 138–139 core concepts default/failure protections 139–141 joint steering groups 139–141 limitation 135–138 relationships 11–13 risk reward schemes 135, 138 RMP see relationship management plans road maps, stakeholder engagement 86 robotics development 228 routine relationships 24–25 rules of disengagement 15 SCCoP see Supply Chain Code of Practice schedules of composite rates 135, 137 SCM see supply chain management sector dynamics, UK oil and gas 92–93, 94 selecting partners 46–47, 80–82 shapers 69 Share Fair 102 single sourcing 134 skills shortages 11 sole sourcing 134 spend management Progora 246–248 public sector 251–252 stakeholders architectures 67–68 categories 61–62 engagement 55–87 action planning 72–74 ‘ACX’ case study 168–178 development process 64–75 evaluation plans 74–75 generic guide 65 key performance areas 74–75 minimum requirements 62–63 objectives 71–72, 74–75 pharmaceuticals case study 233–239 platform selection 80–82 quality standards 63 relationship building template 85 reputation risk response plan 84 road map template 86 environments 62 identification 66–70 issues analysis 70–71 levels of engagement 78–80 mapping 68–69 relationship/health reviews 69–70, 75–77, 83 reputation analysis 71, 77–78 staying together 50–52 steering groups, joint 139–141 strategic procurement 253 strategic relationships 26–27 structural building, ‘ACX’ case study 178–180 structured methodology, ‘ACX’ case study 169–180 success acquisitions and divestments 200–202 consultant collaboration 189 factors for 14–15 Team Marine case study 153–154 suitability assessment 17 suppliers capability Gantt charts 112–114, 124 perspective of 26–27 risk 138–139 Supply Chain Code of Practice (SCCoP) 99–129 benchmarking 119–120, 126, 128 contracting 102–138 debriefing and feedback 105–106, 114–128 industry mutual hold harness deeds 104–105 key stages 111 performance feedback profiles 114–128 Index perform and pay 129 planning 101–102 pre-qualification 108–128 supply chain management (SCM), role of 34–35 supply chain perspectives 23–35 arrangement forms 23–28 clients 23–25 contractor landscape analysis 31–35 contractors/suppliers 26–27 customer profiling 28–31 supply chains, definition supply/service arrangements 18–19 sustainability 47–49, 59 target setting 50 Team Marine case study 145–155 background 146 benefits 151–153 drivers 146–150 obstacles 150 reasons for success 153–154 technological development Captain project 159 Oil and Gas Technology Centre 226–228 TechX accelerator, OGTC 226 tendering competitive 134 feedback on failure 105–106 funnel concept 123 performance feedback 114–128 pre-qualification 108–128 UK oil and gas reforms 104 termination 140 Texaco, Captain project 157–164 third sector case study 207–221 background 207–208 challenges 209–210 commodities planning, forecasting & funding 211–212 distribution 217–219 needs 210–211 transportation 208–209, 213–216 warehousing 217 transportation helicopters 91–93, 106 humanitarian relief case study 208–209, 213–216 trust 14, 59 UKCS see United Kingdom Continental Shelf UKOOA see United Kingdom Offshore Operators Association United Kingdom Continental Shelf (UKCS) oil and gas sector 89–130 big data 228 Captain project 157–164 client/contractor landscape 90–93 collaboration drivers 94–99 contracting 102–128 CRINE initiative 95–97 debriefing and feedback 105–106, 114–128 duplication elimination 106–108 FPAL 100–102, 108–128 industry context 89–93 industry mutual hold harness deeds 104–105 LOGIC model forms 102–104, 115 North Sea exploration case studies 145–164, 195–199 operating costs 95–97 performance profiles 114–128 perform and pay 129 Piper Alpha disaster 98–99 planning 101–102 pre-qualification 108–128 robotics 228 sector dynamics 92–93 Supply Chain Code of Practice 99–129 Team Marine case study 145–155 Technology Centre case study 223–229 United Kingdom Offshore Operators Association (UKOOA) 94 unit rate contracting 135, 137 universities, procurement 253–254 value creation 50, 60 acquisitions and divestments 187–204 ‘ACX’ case study 184 consultants 192–193 Envoi case study 187–204 Oil and Gas Technology Centre 224–226 vertical relationships clients perspective 23–25 contractors/suppliers 26–27 volatility of oil prices 93, 94 voluntary sector warehousing 217 weather information 108 website design 250–251 wheel of collaborative involvement 34 win–win approach 15–16 working together 47–49 267 268 THIS PAGE IS INTENTIONALLY LEFT BLANK 269 THIS PAGE IS INTENTIONALLY LEFT BLANK 270 THIS PAGE IS INTENTIONALLY LEFT BLANK 271 THIS PAGE IS INTENTIONALLY LEFT BLANK 272 THIS PAGE IS INTENTIONALLY LEFT BLANK ... Collaborative Principles for Better Supply Chain Practice Value creation up, down and across supply chains Norman K McLennan iv Publisher’s note Every possible effort has been made to ensure that the information... explore the ‘art of the possible’ – the collaborative principles that will unlock better business practice and enable value creation – up, down and across supply chains The ‘art of the possible’ theme... rationale for collaborative business practices across supply chains and why collaboration can be the jewel in the crown for organizations 02 Collaborative arrangements: Different supply chain perspectives,