NNPCL Vendor Management PDF

NNPC Limited SCM Processes and Procedures 16.0 Vendor Management This process defines the standards that NNPC Limited uses to manage its relationship with vendors. Objectives The objective of Vendor Management process is to ensure: Value-driven vendor performance. Mutually beneficial vendor relatio...

NNPC Limited SCM Processes and Procedures 16.0 Vendor Management This process defines the standards that NNPC Limited uses to manage its relationship with vendors. Objectives The objective of Vendor Management process is to ensure: Value-driven vendor performance. Mutually beneficial vendor relationship that drives operational success in NNPC Limited is maintained and strengthened. Maintenance of a repository of technically competent contractors in the various work areas for use in its contracting activities. • • • 16.1 Vendor Management Policies S/N Description 1. Vendor Registration a. Any Nigerian registered company (Contractors, Vendors and Suppliers) who wish to conduct business with NNPC Limited are expected to register with NNPC Limited through the authorized online portal (www.nnpcgroup.com). b. Develop and maintain a pool of technically and financially competent Vendors, Suppliers and Contractors of all categories and clear definition of services and capabilities. c. NNPC Limited shall undertake market research to inform the development and maintenance of its own Vendor database. d. NNPC Limited shall develop and maintain a Supplier database. e. NNPC Limited shall categorize Contractors, Vendors and Suppliers based on Area of specialisation and other categories as it deems fit (portfolio matrix). 2. Supplier Information NNPC Limited shall only procure goods and/or services from suppliers who have been approved in the Supplier Database. New suppliers shall be uploaded into the database. Occasions may arise where it is necessary to discontinue a supplier from providing goods and/or services to NNPC. All deactivation decisions shall be reviewed and approved by SCM. 125 NNPC Limited SCM Processes and Procedures 16.1 Vendor Management Policies S/N Description Annual reviews of suppliers will be conducted and suppliers who have not participated in tender process within three years may be deactivated from database and new registration must be completed should NNPC Limited require the services of the supplier in the future. 3. Supplier Verification and Qualification The supplier shall complete a Quality Assurance questionnaire on the vendors registrations portal. The questionnaire shall allow the supplier to summarise their capabilities against the following key areas: a. Quality Management System. b. Quality personnel and qualifications. c. Product quality validation requirements. To ensure that the outcome of this process is reliable and credible, the following Critical Success Factors (CSF) must be considered: a. Existence of clearly defined assessment criteria. b. Transparent and objective assessment process. c. Line acceptance of the process of vendor registration. 4. Vendor Performance Management Suppliers will be subjected to periodic Performance Evaluation to update Supplier classification, monitor, and assess Supplier's performance and compliance to the company's standards, and improve key processes of Supplier that may be related to NNPC Limited 's operations. Supplier's performance will be evaluated based on the following criteria: a. Price - competitiveness, fair pricing/ low profit margin, provides cost reduction options. b. Quality - provides products that meet the company's quality requirements, low percentage of defective/rejected products. c. Delivery - delivers the correct quantity at the right time, flexibility in changes of schedules, provides updates on progress or problems. d. Service - value-added services, timely response and resolution, willingness to share information. e. NNPC Limited shall list as defaulters on the system, Suppliers exhibiting: i. Non-performance ii. Misrepresentation iii. Any reason as NNPC Limited deems fit where justifiable. 126 NNPC Limited SCM Processes and Procedures 16.1 Vendor Management Policies S/N Description f. NNPC Limited shall not transact with any owners or directors of companies listed as defaulters or who have formed a new entity while still on Defaulters List. g. NNPC Limited shall not do business with Suppliers who are on the Defaulters List. 16.2 S/N 1. Vendor Management Procedures Responsible Party SCM (N-5/6) Description Job Aid Supplier Information Management ERP Create and manage supplier database. 2. SCM (N-5/6) Segment the suppliers, monitor, control and assess supplier performance. ERP 3. SCM (N-5/6) Perform a risk assessment and formulate a list of countermeasures. ERP 4. SCM (N-5/6) Supplier Verification Verify office location through tenancy agreement, receipt for payment of rent, registration of business premises with the LGA, utility bills etc. 5. SCM (N-5/6) Cross check information on personnel as contained in the completed questionnaire with company records e.g., payroll, personnel data (letter of employment etc.). ERP 127 NNPC Limited SCM Processes and Procedures 16.2 6. Vendor Management Procedures SCM (N-5/6) Scrutinize all documents submitted and ensure that they are authentic, current, and valid for intended purpose. ERP Note: Ensure that the line of business for which registration is being sought is covered by relevant permit and the company’s incorporation documents. 7. SCM (N-5/6) Verify claims of previous experience. Ensure that previous experience is relevant to line of business being considered. 8. SCM (N-5/6) Ensure the company has an acceptable policy manual/management system in line with NNPC Limited’s standards. 9. SCM (N-5/6) Ascertain the highest value of any single contract done within the last two years for the purpose of appropriate vendor classification. 10. SCM (N-5/6) Obtain approval to engage vendor from SCM (N-4). 11. SCM (N-5) Vendor Performance Management ERP Set key performance indicators (KPIs). 12. SCM (N-5) Schedule review meetings with the vendors. 13. SCM (N-5/6) Monitor vendor performance. 128 NNPC Limited SCM Processes and Procedures 16.3 S/N 1. 16.4 Vendor Management Input & Output Documents Document Description Type Frequency Source Recipient Vendor Information Form Input As required Vendor SCM (N-5/6) Vendor Management Indicators S/N Performance Measure Key Performance Basis of Measurement Timeframe Target 1. 1 Accuracy of Supplier Information Verification Number of material errors, omissions, and misrepresentations in the verified documents. As required Zero error 2. 2Timeliness of Supplier Verification Latest date for completion of request. As required Two weeks 129 NNPC Limited SCM Processes and Procedures 130