1 Reply Latest reply on Aug 27, 2012 3:23 PM by SundarK

    Creating complex breakdowns for Drilling Fluids and Cementing

    Anoop Thakur Apprentice



      I am using Ariba Sourcing Pro's RFP in the Oil and Gas sector for complex tenders such as Drilling Fluids and Cementing.In such tenders, apart from the commercial comparison there is quite a bit of analytics and a number of unknowns that are involved. For eg, Say for cementing, there is something called a "Spacer" that is required which is a mix of certain chemicals. Now for vendor A, these certain chemicals could be C1, C2 and C3 while for Vendor B this might be C4 and C5 only. So the number of line items is based on the technology of the supplier and is not known upfront.


      Additionally, to complicate things, even the quantities are not fixed before the RFP is floated as the quantity is based on certain parameters of the ingredient Chemicals themselves.Greater the specific gravity of the chemicals, the lesser is the quantity.


      Now finally, to further complicate things, different vendors have different minimum order quantities.


      Also, I want to evaluate the total bid basis of my well program (number  of wells to be drilled) and not against the line items for which the vendorrs have quoted.


      Appreciate if you can help me in modelling


      Thank you An

        • Re: Creating complex breakdowns for Drilling Fluids and Cementing
          SundarK Expert

          Hi Anoop - Ariba customers in Oil and Gas have used Ariba Sourcing to execute complex tenders like Well Services. While some of these categories creates tremendous challenges, the projects can be executed with some level of creativity using functionality that are part of Ariba Sourcing. I would suggest using the following set of options to structure the RFP's:

          1. 1. Structure the project into multiple phases - RFI phase, RFP phase, Final round (total basis for the well program)

          a)      RFI phase, gather information from suppliers on process, raw materials used (eg: Cementing - Spacer )

          b)      Structure questions to understand their capabilities, capacity, technology know-how so that you can use this information to structure your RFP in the next stage

          c)      RFP phase - This is where some level of creativity comes into play.

          i.          Case where exact quantity is unknown. -  Collect cost breakdown information for Unit quantity

          ii.          You may also elect to use the different lot structure combinations to get aggregated cost for apples to apple comparison

          iii.          In cases where you expect alternative materials or chemicals, turn on Alternate bids.

          iv.          For the chemical example, you can use alternative bids to get standardized quotes (apple to apple comparison) but ask the supplier to provide alternate quotes based on the different types chemicals used.

          v.          Minimum Order quantity for a certain item or service being procured can be collected as a separate attribute per supplier

          vi.          You can use the Formula builder and build different TCO formula for evaluation based on chemicals types, minimum order quantities etc.

          vii.          Finally you can also customizable bid sheets to collect very detailed information and yet look at aggregated information at line level within Ariba Sourcing.

          2.  Collect all generic supplier information through supplier profile questionnaire which would help in utilizing this information as part of Bid Analysis

          3. List out all the variables and award scenarios/business constraints that is being as part of the overall analysis process so that you can start incorporating creative ways to model using Ariba Sourcing.

          Hope this helps,