Naftogaz changes procurement system to save money

Naftogaz Group is changing its approach to organizing the procurement system. The main goal is greater transparency, standardization of approaches, and efficiency of processes. This is reported by the press service of Naftogaz. The reform was initiated by the Technical Support Division. It introduces the unified supply chain management system (SCM). In particular, the use of category management mechanisms developed jointly with representatives of the consulting company KPMG, Naftogaz noted.

The newly created team of category managers will be responsible for procurement throughout the entire product lifecycle, from standard development to physical delivery to the site. In close cooperation with planning managers, who will provide an aggregated list of products required for purchase, category managers will ensure optimal product range in warehouses, minimization of shortages, storage, and transportation conditions for products, as well as quality control of purchased products.

To increase the transparency and independence of procurement, the reform also separates the function of controlling individual procurement processes. From now on, it will be implemented at two levels – the major contract board (MCB), which is headed by the group's Chief Financial Officer, and at the group's enterprise level – the local contract boards.

The MCB consists of 5 members, including, in addition to the group's Chief Financial Officer, the director of legal affairs, the head of the strategy and Business analytics department, the head of the problematic debt management department, and the head of the contracting department as the Deputy Chairman of the Board. Local contracting councils are formed from employees of the newly created contracting department, which is subordinate to the financial director.

17:10 / 11 November 2020

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