Gulf Downstream Association

Capitalizing on Transformation

Organizational Resilience
BAPCO’s Procurement Transformation Roadmap

Abstract

Organizational Change Management is a vital principle to drive the transition from a tactical cost-based
decentralized procurement function to a strategic value-added centralized role. Bahrain Petroleum
Company’s (BAPCO) Procurement and Contracts Department has adopted a transformational framework
to accommodate the Bapco Modernization Program (BMP) expansion and global supply chain
challenges. The vision is to transform the challenges into opportunities to achieve an agile, resilient, and
strategic procurement function by aligning operational practices with the overarching business
objectives of “BAPCO of Tomorrow”.

Technology and
Digitization

Organizational
Strategic Transformation
Structure
Practices Review
Flexibility

Process Control

Organizational structure

As a demonstration of the need of flexibility to streamline the business demands and cope with the
expansion of BMP, the department is undergoing through a total divisional structure revamp and
competency empowerment. Competency Analysis in cooperation with the global audit firm (KPMG) had
taken place to identify the knowledge gaps and develop the human capital with the assistance of
 Gulf Downstream Association
Capitalizing on Transformation

Training and Development Department. In addition, the assessment emphasized on the necessity to
restructure the purchasing divisions into MRO, Direct and Service categories to better address the
increased requirements and consolidate volumes. Last but not least, the department is in the process of
building a state-of-the-art warehouse facility based on the anticipated volume of materials post BMP
commissioning, which will take into consideration lease options for contractors to serve the initiatives of
Just-In-Time (JIT) deliveries and VMIs.

Technology and digitization

This technological driven initiative focuses attention on bridging the current system and process gaps to
attain a sustainable automized workflow. Projects such as the implementation of Warehouse
Management System (WMS) and automation of low value transactions lie at the core of this plan. The
WMS includes the introduction of barcoding, advanced vendor managed inventory control, and
automized re-ordering. Furthermore, the project takes lead to provide the stakeholders with e-
catalogues for general services and goods orders as well as P-card solutions for low value purchases.

Best practices from outside oil & gas industry

As a main sourcing strategy, the department is working to build comprehensive framework agreements
with the rest of National Oil and Gas Authority (NOGA) Holding companies for the purpose of structural
efficiencies, consortium purchase and sharing of best practice. This example is grasped from the Gulf
Health Council practice. Additionally, to optimize value creation and streamline of auction processes,
BAPCO is undertaking a project to cooperate with a specialized auctioning entity to widen the purchase
base and improve competitiveness.

Process Control

The department has initiated knowledge sharing sessions with the various company divisions to ensure
strategic alignment and integrity as well as enhancing the relationship with Bahrain Tender Board. The
main objective is to remove any identified duplications / redundancies throughout the value chain.
Examples include implementing contract life cycle management solutions and optimizing the approved
vendor list via market intelligence and supplier management tools.