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Knowledge Management

Essay by   •  May 2, 2016  •  Case Study  •  1,166 Words (5 Pages)  •  1,427 Views

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Issue(s) Identification

While reviewing procurement of  various services at  I have feeling that we do not have clear visibility on economy of spent , expertize of contractors,  efficiency of contractors, safety performance  of individual contractor  working at site,  selection of contractor.  I see some opportunity for saving, improving down time for production and having consistency on processes if we are able to achieve this visibilities.

Currently some of the activities performed by more than one contractors at different cost. Contractors are called up by operational people directly based on who helped them last for similar kind of services without knowing their expertize level, quality, safety performance and price. This results in unsafe work, high cost, re-work and sometimes production lost.

Part of the problem is we do not have any knowledge management system through which various information about process for various service , contractors expertize, cost to perform service , safety performance and be captured , accessed and analyzed when require.

Another problem I think is plant being too old, we do not have  maintenance details / history of several equipment and maintenance requirement of several equipment. This knowledge was resided as a tacit knowledge which is lost due to recent organization’s announcement for volunteer retirement. But still we have some tacit knowledge that can be captured before those personal retire.


While analyzing above issue , I think  to large extend, issue is we do not have defined process for ordering site service and our current system ( SAP ) is not fully configured  and utilized get advantage of data capturing.

At present many times, operational personal work directly with contractors of they know or of their choice to obtain quote and even some times they are asked to complete work without asking quotations.  Not using procurement personal’s expertize in obtaining quote and working with single source results in high cost and non-competitive environment

Also we do not have qualified data base for contractor’s expertize. If we have this database in place, procurement and operation can work to gather for developing long term partnership of expert contractors that can help us improving process and reducing cost.

Most of the ordered are prepared in SAP  after the fact service is completed, just to facilitate payment through SAP . Procurement department get to know about the cost after the fact work is completed , At this point procurement loose opportunity to validate / negotiate cost.

We do not have Service master setup in SAP for common and regular service we use at site.  All service contracts are done in SAP as a short text purchase order (Without  Service Code) . This prohibits us to access historical data for services done in past. Hence we do not way to compare cost with history.

Once we have service master setup in SAP, with Service code allocated to each service, We can negotiate a long term contract for high value , more frequent ordered services and have Service Agreement setup in SAP. This will save time for obtaining quote for each service call and also save money as we will be committing long term contracts.

Another benefit of having service master setup in SAP , is we will be able to pull history for analysis purpose to look for opportunity for improving efficiency of machineries.


I think is very much required to have some process in pace for service procurement and also have some technological solutions to capture information required to order services efficiently. I have explored couple of options to make this happen.

To draft and implement Service procurement Policy :  We need to bring all stake holders,  Production, Procurement, Engineering, Logestic and Finance to understand each department’s requirement.  After collecting information , a Service Procurement policy need to be drafted an presented to Management for approval. Once it is approved need to rolled out with proper training session.



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