Shell: Digital Transformation in a $41bn Supply Chain

How Does Shell’s Procurement Strategy Help Them Find a Competitive Advantage While Working With 24,000 Suppliers Across 110 Countries and a $41.5bn Spend?

A central part of Shell’s procurement strategy has been to embrace digital transformation in their procurement and supply chain operations.  This includes the use of Shell Supplier Sphere, which is a fully integrated supplier relationship management platform.  It supports end-to-end supplier relationship lifecycle and performance management, and allows real-time collaboration between the company and their procurement partners.  The company also uses SAP Ariba as their standard purchasing platform, to help deliver a global spend transparency, and other digital tools like DocuSign to help streamline contracting between vendors.  Shell is also embracing artificial intelligence and data compliance to help automate operations and increase efficiency.  

The advantages of a global reach for Shell 

The global reach of Shell allows for a competitive advantage and enables it to mitigate supply chain disruption risks, while driving sustainable returns. With more than 40% of the organisation operating from centralised hubs in locations like Poland, Malaysia, the Philippines and India supported by a single digital platform, it allows the company’s procurement and supply chain professionals to work with high levels of process efficiency, standardisation, and collaboration, as well as availability across all time zones and the ability to support local or regional disruptions with greater flexibility.

Shell Powering Progress Strategy 

A part of Shell’s Powering Progress Strategy is respecting nature, which involves working with suppliers and customers to accelerate the transition towards net-zero emissions. The company's approach to their procurement and supply chain for respecting nature involves reducing waste and  promoting sustainable procurement and circularity across the whole business and supply chain.  Shell have already seen progress in this strategy, in Australia, it has been able to introduce savings in plastic and CO2 emissions by removing the plastic packaging from certain products transported from countries such as Italy and China. Meanwhile in Malaysia, it has focused on reducing waste by composting at mobility retail sites and working with suppliers to install composting machines on-site. Fertiliser, which is a by-product of composting, is then provided to customers, free of charge.

Another priority with suppliers and procurement partners is to accelerate decarbonising global supply chains.  Supply chains are playing a crucial role in driving the energy transition, promoting the early adoption of transitional technologies, and implementing plans for addressing supply disruptions. Shell is continuing to work with suppliers and contractors to push innovation together, help businesses become more sustainable together and progress towards net-zero emissions.

Read more about the importance of promoting a circular economy.

 

Make sure you check out the latest edition of Procurement Magazine and also sign up to our global conference series - Procurement & Supply Chain 2024 

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