Aramco’s Procurement and Supply Chain Management (P&SCM) is a highly complex operation that has been steadily boosting its harnessing of data, automation, and predictive capabilities to continually improve and streamline processes.
Aramco's Procurement and Supply Chain Control Tower in Dhahran.
In Dhahran, the cutting-edge Procurement and Supply Chain Control Tower shows how far Aramco’s Procurement and Supply Chain Management (P&SCM) has come along its Digital Transformation journey.
Mohammad A. Al Shammary, senior vice president of P&SCM, is keen to discuss the strides taken to digitally streamline processes and get the full data-driven picture, freeing employees to concentrate on critical tasks.
Mohammad A. Al Shammary
A Journey
This journey started years ago, but it’s far from over, and Al Shammary speaks about staying ahead of the digital curve.
“There is so much information and data, so much analysis, so much data that is raw. And data is power, if you know how to use it.”
— Mohammad A. Al Shammary
Harnessing that power is the mission of P&CSM across a network of suppliers that spans more than 80 countries. P&SCM’s growing palette of digital solutions has rapidly achieved over 99% automation for some of our critical procurement processes.
Enabling Supply Chain Resilience
“We are trying to make sure that accurate information is at our fingertips when we need it, to be able to make informed analysis and reduce mistakes, because in procurement, a small number can make a big difference,” says Al Shammary.
The first major step toward achieving this was adopting the automated e-marketplace in 2018.
“The e-marketplace starts with the supplier himself, and it gave us visibility of the whole process, and now we know at all times where an issue is at.”
— Mohammad A. Al Shammary
Another key feature is the virtual bid box, which meant bids no longer had to be physically delivered. This came in handy during the pandemic.
“It minimized a lot of issues that we had with our suppliers and contractors,” he says.
And while he is proud of our pioneering culture and drive to improve through the use of new digital tools, it doesn’t end there.
The Procurement and Supply Chain Control Tower
After automating the system, the next question was how to forecast for the future and anticipate what’s coming.
“That’s when we moved our focus to the Control Tower, because we wanted something to take us from digitization, to digitalization.”
— Mohammad A. Al Shammary
Seeking a system that had the ability to act on its own to provide a set-up, solution, and performance measure, the ambitious Robotic Process Automation (RPA) was introduced.
With hundreds of purchase orders per day, RPA has allowed P&SCM to streamline processes. What once took up to 70 days for high engineering procurement can be completed in 30 to 40 days.
“That’s digitization,” adds Al Shammary. “Employees can now focus on the very important items that require a human being.
Another key function is an alerting system that warns when a contract is about to expire or a procurement has been canceled.
This minimizes already canceled procurement items making their way into Aramco’s inventory.
“You won’t find a control tower elsewhere that has … procurement, logistics, inventory and warehouse management,” says Al Shammary. “To have these four elements under one roof is unique.”
Gartner digital-maturity assessors would appear to agree, giving P&SCM a 5/5 mark for Aramco, which was placed among the top global energy companies.
Digital Twin
Another new digital method is Digital Twin, essentially a replica of the entire procurement process as a simulation.
The tool analyzes historical data to more accurately predict future customer demand by considering market intelligence information and supply chain global dynamics. It also assesses special risks by region in terms of instability or upheaval.
P&SCM has applied for four patents with a view to commercializing the Digital Twin in procurement, and has plans to extend it to logistics, warehousing, and other processes.
Al Shammary said this is the next step in a long journey for which Aramco has been preparing for years in training and education.
“We are really looking forward to this new era,” he said.
— The Arabian Sun: February 20, 2024