SATORP: Digitalizing procurement for a sustainable supply chain
Explore SATORP’s journey with SAP
SATORP is one of the most advanced oil-refinery and petrochemical complexes worldwide, with a commitment to the highest standards of health, safety, and the environment. Its procurement department was managing large-scale competitive bidding using an e-mail based process, so the business decided to adopt a digital infrastructure. SAP Ariba solutions enable SATORP to centralize its procurement communications, thereby improving the control, accuracy, and efficiency of the overall procurement cycle.
| Industry | Region | Company Size |
| Oil, gas, and energy | Al-Jubail, Kingdom of Saudi Arabia | 1,500 employees |
reduction in material sourcing time.
reduction in supplier onboarding time.
faster placement time for purchase orders.
Procurement and Supply Chain Manager, Saudi Aramco Total Refining and Petrochemical Co.
Addressing a heavy demand for materials and services by streamlining operations
Saudi Aramco Total Refining and Petrochemical Co. (SATORP) is a joint venture between Saudi Aramco and TotalEnergies that manufactures refined products. It aspires to be the Middle East and Asia’s leading performer in refining and petrochemicals with a passion for the environment. Its mission is to achieve this by being reliable and cost-efficient in its business and conforming to the highest safety, health, environment, and quality standards. Above all, SATORP values people, partnership, pride, and professionalism.
Previously, SATORP was using e-mail correspondence in all procurement processes and exchanging messages for technical and commercial inquiries. The company was also relying on documents being physically stored, which proved to be time-consuming and more difficult for traceability and auditing. The procurement department was fulfilling a heavy demand for materials and services and had accumulated a backlog of outstanding procurement requests, which had built up over the past few years. All procurement requests are urgent and difficult to manage without a standard process.
Measuring and maintaining supplier and contractor performance was challenging. Supplier onboarding was an issue due to the lengthy procedure of submitting documentation with e-mail, so developing a smooth process was a priority for SATORP management. The company wanted to enhance its buyers’ day-to-day activities and productivity so they could focus on value-added tasks, such as supplier qualification and effective negotiations. In addition, the need to have an online bidding portal (to replace the ordinary bid box) was identified early on as a key requirement of any new automated process.
SATORP worked to find a solution for its procurement processes that would reduce the mass of communications for the department and require less manual intervention while offering flexibility and confidentiality.
Procurement and Supply Chain Manager, Saudi Aramco Total Refining and Petrochemical Co.
Digitalizing procurement by automating processes
SATORP’s digitalization road map identified a clear business case for digital procurement (see the figure below). The company selected SAP Ariba solutions to digitalize the procurement process and centralize the large volume of communication and documentation. The company implemented the SAP Ariba Sourcing, SAP Ariba Supplier Lifecycle and Performance, and SAP Ariba Contracts solutions as well as the cloud integration gateway capability (in SAP’s Saudi Arabian data center). By gradually enabling more features, the business enhanced its use of the solutions. For example, pricing is now communicated at the same time as pricing approval requests in the new process, rather than being sent separately by e-mail.
The company uses the software to manage direct spend in both materials and services, and it has now deployed the SAP Ariba Procurement mobile app to use for sourcing-related approval workflows. This enables the management team to approve procurement requests quickly and intuitively through the system while on the move.
Prior to the integration of SAP Ariba solutions with SAP S/4HANA, bid figures and documentation were entered in the ERP system manually, which was challenging, time-consuming, and prone to human error. As the process is now fully automated, there’s no manual data entry, so errors are avoided, data is accurate, and process efficiency is increased.
SATORP engaged SAP Services and Support for help with the implementation, including the supplier outreach service for the top 250 suppliers. The supplier enablement and self-service capabilities allow supplier self-service registration, a task previously handled by the procurement department. The company conducted training sessions to get buy-in from the procurement department and suppliers.
Procurement and Supply Chain Manager, Saudi Aramco Total Refining and Petrochemical Co.
Increasing control, confidentiality, accuracy, and efficiency
SAP Ariba solutions improve SATORP’s procurement system by introducing automation, standardization, and online collaboration – digitalizing records from more than 1,600 suppliers. Deploying SAP Ariba gives the company more control, confidentiality, and accuracy in bidding transactions and the procurement cycle.
Streamlining communication and documentation helps avoid miscommunication and eliminates paperwork and e-mails. The implementation strengthens supplier relationships due to the increased security, reliability, and efficiency of communications. Documentation management has also been enhanced, and the audit process can be managed efficiently due to the comprehensive data being readily accessible and held in one place.
The solutions are the major contributor to significantly reducing the procurement cycle compared to other bidding processes. SATORP reduced its material sourcing time by 43%, its services sourcing time by 30%, and its supplier onboarding time by 60%. This enables the procurement department to manage a greater number of purchase orders (POs).
Whereas it used to take days to perform bid analysis and come up with award recommendations, SATORP has automated bid analysis and introduced price ranking. With only one click, employees can identify the lowest price of each line item, even if there are 10 or 20 bidders, and the order recommendation is concluded automatically. The reduction in manual data entry and analysis improves the employee experience, saves time, and enables cost savings for the organization.
The main KPI for measuring the procurement cycle is on-time placement, which is the length of time from receiving the purchase request to placing a PO. With the help of SAP Ariba solutions, the procurement cycle has improved by a factor of 1.5.. The company has increased supplier registrations, from 1,300 to more than 1,600 suppliers onboarded online. Productivity has also grown, with employees now handling one-and-a-half times the workload with the same full-time equivalent in terms of the volume of price quotation requests to PO award.
Procurement and Supply Chain Manager, Saudi Aramco Total Refining and Petrochemical Co.
Driving improved decision-making and digitalization
SATORP plans to build on its use of SAP Ariba solutions to capture cost savings and assist in decision-making. Adopting further reporting features will help the company make procurement and commercial decisions around spend analysis, agreements, and more.
Not only do SAP Ariba solutions allow SATORP to manage its supply chain better, but they also serve as an enabler for its future and goals. This includes digitalization and ensuring fair competition for vendors. To this end, SAP Ariba helps promote a high standard of ethics and commercial confidentiality in the bidding process.