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Advanced Purchasing Skills

Petrochemicals, Derivatives & Related Raw Materials

Module 1 (3 hours and 30 mins)

15 minutes Overview of the course and class introduction

1 hour & 30 minutes Understanding the petrochemicals industry and markets

  • Key petrochemical value chains and their inter-relationship
  • Market Intelligence

15 minutes Break

10 minutes Pre-session interactive poll

1 hour & 5 minutes Analytical approaches to purchasing (part 1)

  • Opportunity Analysis – a tool for identifying and
    ranking opportunities based on return, effort and
    probability of success
  • Examples of formulas used in petrochemicals
    purchasing

15 minutes Summary & Conclusion

Module 2 (2 hours and 45 mins)

1 hour & 15 minutes Analytical approaches to purchasing (part 2)

  • Price history vs. market or formula
  • Cost Models, price forecasting and margins

15 minutes Break

1 hour Analytical approaches to purchasing (part 3)

  • Contract Model – legal & mathematical
  • Price versus total cost

15 minutes Summary & Conclusion

Module 3 (3 hours)

15 minutes Interactive live poll

1 hour Strategy development: Spend classification and Risk Management

  • Spend Classification
    • Strategic, Critical, Tail spend
  • Risk management
    • Internal vs External Sourcing
    • Hedging
    • Global vs Regional
    • Contract vs Spot
    • Supplier viability & natural disasters
    • Strategy alignment via supply/sales agreements

15 minutes Break

1 hour Strategy development: Strategic sourcing and improving supplier cooperation

  • Strategic Sourcing to insure the lowest cost.
  • Improving supplier cooperation

15 minutes Interactive poll

15 minutes Summary & Conclusion

Module 4 (3 hours)

1 hour & 30 minutes Execution

  • Alignment with strategy
  • Tracking to plan
  • Purchasing procedures
  • RFQ (Request for Quote) process
  • Supplier development = competition; Supplier Score
    Cards with weighting that reflects impact on cost
  • Quarterly supplier meetings – to provide feedback
  • Negotiation

15 minutes Break

30 minutes Evaluation – Performance metrics

  • PPV – tracking to budget – short term performance
  • YoY price inflation / deflation vs. index – longer term
    performance
  • Price – volume – mix analysis
  • Individual metrics aligned

25 minutes Class insight exchange

20 minutes Summary & Conclusion