SHARED SERVICES: Reframing Supplier Governance and Relationship

At SABIC we maintain a highly internationalized and interlinked supply chain with complex global operations. Every year, we raise expectations and accountability, and in 2021, our global supply chain delivered approximately 33 million tons of products to around 12,000 customers in over 130 countries – working in close collaboration with over 500 logistics service providers worldwide.

To manage such intricate operations and ensure we are moving towards our goal of becoming the preferred world leader in chemicals, we have adapted our business operations and implemented new ways of working to ensure optimum efficiency across our supply chain operations.

During the challenges of 2021, our supply chain infrastructure proved resilient and our people demonstrated their adaptability. Service levels were improved and efficiencies were achieved through the efforts of cross-functional teams, with targets met, inventories well-managed and products consistently delivered.

We are also committed to continually seeking opportunities to enhance the efficiency, agility and reliability for our customers. This includes our efforts to explore the full potential of digitalization and Artificial Intelligence to eliminate errors, and drive waste and delay out of our supply chain. 

What is SABIC’s Shared Services function? Shared Services is a platform that increases our corporate focus and adds customer value. It allows SABIC to better manage and control costs, provide better services and leverage information more effectively. Process standardization, as an important element, has allowed SABIC to benefit from economies of scale on transaction-intensive processes using the same tools, techniques, practices, and economic measures.

Critical to the seamless operations of our supply chain is our Shared Services function, which supports all aspects of our business, and effectively enables communication with our affiliates. By helping all our businesses act as one cohesive unit, the Shared Services function improves efficiency, reduces costs and delivers better services to our customers. The importance of Shared Services within our supply chain management was emphasized throughout 2020 and 2021, as we reflected on our operations during the coronavirus pandemic, and found new ways to manage our supplier relationships across our supply chain.

What is Supplier Relationship Management? Supplier Relationship Management (SRM) is the end-to-end approach used to manage external vendors in a transparent, organized, and integrated way.

Our Shared Services function is helping us manage external vendors by integrating new ways of working throughout our business. In order to stay ahead of changes within the industry, and maintain a strong relationship with our suppliers, we developed our SABIC Global Supply Chain Excellence Framework, which covers all aspects of supply chain governance. The framework drives operational excellence and guides the development of management tools and procedures. A key part of this is our Supplier Relationship Management (SRM) program that ensures suppliers are properly segmented with a customized interaction model for each segment. Most importantly, the program ensures that our suppliers adhere to our rigorous requirements for EHSS, code of ethics, and quality, in addition to providing us with the best value at the total lowest cost of ownership.

Shared Services has led the evolution and adoption of integrated operations across our business. Because of this transformational approach to our business, we are now in the best position to respond and plan for changes and operate with resilience and agility throughout our supply chain network.