2.1.4.3Supply Chain

Management approach

SBM Offshore’s supply chain activities are a key contributor to Quality and Operational Excellence in its projects and operations. The Supply Chain department’s ambition is to provide the best value to SBM Offshore’s overall goals and objectives. SBM Offshore expects its suppliers to act responsibly, in line with the Code of Conduct and its Supply Chain Charter. The latter provides expectations and guidance to address environmental, social and governance related impacts – in line with SBM Offshore’s material topics.  The supplier qualification process adopts a risk-based approach in assessing suppliers for SBM Offshore’s business needs as well as screening for environment and social risks such as climate targets and human rights. 

In order to achieve these ambitions and standards, SBM Offshore has set the following targets for its supply chain activities.

  • Strengthen the performance of the Supply Chain function on a global scale to include all areas of business.
  • Incorporate a strategic mindset into tendering activities.
  • Optimize resource management and include regional talent to retain a Product Lifecyle approach.
  • Continually seek environmentally sound solutions.
  • Digitize and modernize ways of working using current tools/systems.

To address the above, SBM Offshore defined six pillars in 2022 that enable Supply Chain to continue to address the above topics. The supply chain organization contributes to SBM Offshore’s strategy as described in section 1.3.2 and is part of the Global Resources and Services organization explained in section 1.3.3.

2023 performance

The supply chain organization has continued developing further around six strategic pillars described below to enhance the resilience of the function as a whole.

Supply Chain Excellence

Strengthened the performance of the function on a global scale to include Projects, Operations and non-Project-related business with the following activities:

  • Implemented a new inspections process for main and sub-suppliers on projects for effective quality control to minimize non-conformity and carry-over work in the construction yards. 
  • Implemented new global supplier qualification process to reduce time taken to qualify while adopting a global risk-based approach towards the qualification of new suppliers.
  • Diagnosis of a global supplier performance assessment methodology and process which will drive SBM Offshore towards a more automated and efficient solution.
  • Implemented revamped post-order management processes to remove inefficiencies and address the three key aspects of cost, quality and schedule.
  • Driven key global issues such as data capabilities, human rights and sustainability goals within the Supply Chain community.

Strategic Sourcing

  • Strategic early engagement with suppliers combined with development and implementation of new ways of working during the proposal phase of SBM Offshore’s projects to enable a structured, transparent and strategic approach to Supply Chain inputs into its tenders.
  • Joint product workshops with key suppliers on supply chain efficiencies, new technology and energy transition initiatives.

Product and Lifecycle Focus

  • Optimized resource management on SBM Offshore’s projects to maximize utilization of skill-sets, for example by using its piping procurement hub in India and incorporating in-house quality control personnel into project organization.
  • Further alignment with the Product Line organization with dedicated capabilities for FPSOs, and renewable projects, and strengthening post-order management capabilities.
  • Partnership with an industry leader in predictive inventory management to achieve >90% inventory accuracy in warehouses supporting SBM Offshore’s operating fleet.

Energy Transition

  • Worked with key suppliers to co-develop technologies for carbon capture.
  • Analyzed scope 3 emissions disclosures from product manufacturers for SBM Offshore’s FPSOs and worked with them to explore avenues to reduce GHG emissions.
  • Supported renewable product focus for development of new energy projects.
  • Tracked CO2 emissions for international freight shipments for SBM Offshore’s operating fleet.

Regional Development

  • Utilized regional supply chain skills and market knowledge by continuing to develop local talent in Bangalore (India), Rio de Janeiro (Brazil) and Shanghai (China).

Digital Transformation

  • Major contribution to the design and implementation of SBM Offshore’s global ERP system.
  • Worked with the external supply chain community to support digital-twin objectives.
  • Modernized data management and reporting tools to increase reporting accuracy and monitor performance across all aspects of Supply Chain’s support to the business.

Performance Measurements:

  • 884 new suppliers were qualified in 2023 of which 100% have signed SBM Offshore’s Supply Chain Charter.
  • 90.4% of the new suppliers qualified were screened for Human Rights.
  • Approximately 68% of reduction in supplier qualification duration since October 2022 using the new supplier qualification process and modernized digital tools.

future

Supply Chain will continue its evolution towards a value-added globalized function to achieve and maintain high standards of performance across all areas of its business including, but not limited to, supporting human rights, climate change measures, digitalization, quality assurance and quality control, resource and talent management across all SBM Offshore’s centers, enterprise management systems, supplier performance and qualification assessments, and energy transition measures.