Outline of Contents

1
Outline of Contents

• Context and Objectives
• Interview Results
• Recommended Approach Deliverables
• Project Timeline
• Project Team Skills Structure
• CompanyA Credentials
• Company Overview
• Supply Chain Practice
• Exploration Production Practice
• Supply Chain Performance Assessment Tool
• Business Integration Methodology

2
Recommended Approach Deliverables

• Our approach is highly targeted to assessing,
  identifying, valuing, and prioritizing the right
  initiatives for CompanyB to tackle over the
  course of the next 2 5 years. Further, we will
  define all key organizational elements required
  to successfully implement and sustain the plan.

Key CompanyA Differentiators
Key Activities
Key Deliverables

• Assess CompanyBs current materials and
  Req-to-Pay Operations
• Identify desired To-Be vision, qualitatively and
  quantitatively
• Modify To-Be vision wrt to key internal
  initiatives and business process projects
• Finalize End-State vision shared with key
  stakeholders
• Identify KPIs for measurement of future
  organization
• Build a business case for change
• Document End-State vision as a series of
  prioritized initiatives people, process, and
  technology
• Define the governance structure required for
  change
• Secure stakeholder ownership
• Prepare organization for Phase II

• Opportunity inventory valued and stage gated
  re baseline, existing process initiatives, and
  existing systems initatives
• To-Be Materials and Req-to-Pay process vision
• Prioritized and recommended strategic projects
  targeted at delivering maximum value to CompanyB
• Valued business case
• Capability Release Plan Implementation Schedule
• Governance and leadership definition
• Stakeholder commitment

• Holistic Business Integration Methodology
  targeted at lifecycle change management of
  people, process, and technology related
  initiatives
• Supply Chain Performance Assessment tool that
  supports activities with best practices,
  benchmarks, KPIs, deliverable templates, etc.
• The worlds strongest Supply Chain dedicated
  organization, 7000 people strong, that is solely
  focused on improving client supply chain
  operational results
• Dedicated EP professionals focused on materials,
  projects, maintenance, production, and financial
  processes
• The strongest SAP organization in the world (per
  SAP)
• Unparalleled experience in CompanyBrelevant
  initiatives and projects e.g. Global Req-to-Pay,
  Well Engineering Forum, CompanyB Globalization,
  Polaris, etc.

3
Recommended Approach Deliverables
Our review will encompass all materials processes
except Strategic Sourcing across the four major
operational disciplines for the Gulf of Mexico
TLP and non-TLP assets will be studied during
this review. Highlighted below are some of the
more critical areas of potential value
Logistics and Receiving (Goods and Services)
Warehouse and Inventory Optimization
Invoice, Payment, and Reconciliation
Project Planning Budgeting
Performance Management
Requisitioning
Capital Projects
Needs Identification
CAPEX Economic Structures
Service Entry Analysis
Integration with Contract Procurement
Verification and Matching
Coordinate Performance Management
Finalize Scope, Cost, Schedule and Funding
Well Engineering
Manage Material / Service Catalogues
Material Tracking And Tracing
Integration with CAPEX / OPEX Planning
Group Reporting Strategy
Approval and Payment
Inventory Valuation
Requisition Mechanics
ERP Planning Assistance
Integration with Contract Procurement
Integration with AP and AR systems
Supplier Performance
Production
Integration Activity And Planning
Inventory Valuation
Approval Authority And Routing
Replenishment and Consumption
Integration with Contract Procurement
Integrated Reporting Capability
Standard Global Process
Integration with Planning and Maintenance
Transportation and Shipping
Compliance / Reporting
Maintenance
4
Recommended Approach Deliverables
As mentioned previously, CompanyA will utilize
two key assets in addition to our Supply Chain,
EP, and CompanyBexpertise Our Business
Integration Methodology and Our Supply Chain
Performance Assessment
The SCVA facilitates gathering quantitative data
and qualitative Information to find supply chain
opportunities and to build the business case
A Strategic Advantage is achieved by utilizing a
proven approach to delivering value.
The Business Integration Methodology incorporates
a Value Delivery life cycle with CompanyA tools
and capabilities to accelerate improvement
delivery. BIM facilitates achievement of
expected outcomes through a holistic strategy,
people, process, and technology approach.
The Supply Chain Value Assessment is grounded in
the Planning phase of the Business Integration
Methodology. It is the first part of an
enterprise-wide program focused on delivering
value from the supply chain, not just identifying
it. Included in this knowledge asset are KPIs,
best practices, benchmarks, analytics,
deliverable templates, etc.
5
Recommended Approach Deliverables
Taking all feedback into consideration, we
recommend an approach that brings together
CompanyA Supply Chain Process re-engineering
capabilities with an evaluation of known
initiatives to yield a fit-for-purpose business
plan.
Materials Management Process Reengineering
Assessment and Capabilities
Evaluation of known Initiatives Constraints
13 week Effort

• STARs Maintenance Management
• MRO / HSE Category Review
• EP Standardization and Globalization
• Global Requisition-To-Pay Process Design
• EP Blueprint (SAP and BW) Polaris
• Asset Integrity
• Well Engineering Portal

Fit-For-Purpose 2-5 Year Business Plan

• Utilizing a fact-based/analytical approach to
  identify high value opportunities
• Incorporating best practice and benchmark
  information
• Leveraging CompanyAs Industry and experience
• Supply Chain Leveraging proven tools and
  frameworks to gain speed and depth

Deliverables
Capability Release Plan
Business Case
Supply Chain Value Assessment
Prioritized Opportunities
See Appendix for more details on deliverables
6
Recommended Approach Deliverables
By expanding the Business Integration Methodology
to include CompanyB specific requirements, we
will ensure a comprehensive and tailor made
solution.

• Steering Committee I Project Approval and Go
  Forward Decision

• Steering Committee II Present Final Plan

• Workshop I-III Stage Gate Reviews Opportunity
  Validation

• Steering Committee II Present Recommendations

7
Within the prepare step, our primary objective is
to clearly understand CompanyBs expectations and
to scope, structure and organize the assessment
accordingly.
Recommended Approach Deliverables
Determine Assessment Scope and Approach
Understanding Sponsor Goals and Expectations
Onboard Team and Initiate Assessment

• Tasks
• Finalize staffing (CompanyA and CompanyB)
• Finalize staff roles and responsibilities
• Conduct Project kick off meeting
• Identify key participants interview recipients
• Schedule interviews and site visits
• Deliverables
• Project work plans
• Interview schedule

• Tasks
• Finalize scope, timelines, milestones and
  deliverables
• Develop quantitative data collection requirements
  and strategy
• Develop data gathering materials
• Deliverables
• Scope and approach documents
• Understand strategy to developing business plan
  economics

• Tasks
• Conduct initial interviews with CompanyB key
  representatives
• Develop Executive presentation for CompanyB
  Committee Review
• Conduct meetings with CompanyB Executive sponsors
  for Go Forward Approval
• Deliverables
• Initial business situation observations /
  business drivers
• Executive presentation (s)
• First pass understanding on scope, approach,
  goals, and deliverables

8
Additionally, during this stage of the initiative
we intend to engage the business to better
understand Shells key business priorities
Recommended Approach Deliverables
Guiding Questions
SCVA Methods and Tools

• Approach Roadmap- Data request forms-
  Templates- Research requests- Interview
  questions- Access-database templates
• - Potential interviewee list
• - Project schedules
• Assessments- Standard templates- Business Case
  Frameworks
• KPI definitions- Level 1 (high level
  diagnostics)- Level 2 (more detailed)- Level 3
  (detailed diagnostic within each functional area)
• Suggested analytics by business process area

• Business Situation/Value Drivers
• What are the Shells key business priorities?
  Projects? IT-enabled capabilities required?
  What is the competition doing?
• What potential performance gaps are suggested by
  industry / internal / Firm-wide benchmarks and
  what are the going-in hypothesis on the to-be
  business operating model?
• Based on these potential gaps, what value chain
  elements and value drivers are the focal points
  for the project?
• What quantitative and qualitative data and
  analysis will be required?
• What is the going-in perspective on the clients
  capacity for change?
• Project Kickoff
• What refinements to work plans and data
  collection strategies are needed?
• How will CompanyB and CompanyA team members work
  together? Who owns what aspects of the
  work/analysis plan?

9
Project Timeline
10
Project Team Skills Structure
Well Engineering
Projects
Production
Maintenance

• CompanyB 0-1 FTE
• CompanyA 2-3 FTE

• CompanyB 0-1 FTE
• CompanyA 2-3 FTE

Extended Team Members
3-5 Company A (PT)
Company B Functional Business Unit Reps
12-15 CompanyB (PT)
11
Clear roles and responsibilities ensures
appropriate focus is given to the effort while
efficiently utilizing the time of the combined
project team
Project Team Roles and Time Commitment
Time Commitment
Position
Role
Governance Board

• Remove project obstacles and barriers
• Serve as focal point in communications for
  leadership, project teams and stakeholders
• Approve scope and commercial arrangements

5
Project Management

• Manage project scope, quality, activities and
  deliverables
• Develop business case
• Manages and mitigates assessment risks to Program

75

• Arrange and conduct interviews and site visits
• Collect and analyze data
• Assess current supply chain performance
• Identify performance gaps
• Develop opportunities and recommendations

Core Team
Company A 100 BP 75
Subject Matter Experts

• Provide skilled knowledge within area
• Identify specific business requirements and
  issues
• Support stakeholder enrollment and communication
  efforts in their BUs
• Leverage CompanyAs relationship with the
  Procurement Centre to take advantage of their
  knowledge of BP and expertise in procurement and
  supply chain practices

5-10, or as needed
12
Project Team Skills Structure
Further to the CompanyB experience, we will bring
key personnel from the engagements outlined below
as well as assist CompanyB with critical
initiative connectivity and rationalization
Company B Process Globalization
Well Engineering Process Portal
TOE
Asset
MM Strategic Plan
Global Req to Pay
Blueprint
OP Req to Pay
MRO/HSE/ IAE/PVF
Polaris
STARS
Direct Impact Indirect Impact Participation No
participation
Please see appendix for overview of project and
ACVS role
13
For the initial phase, we recommend a joint
program management structure which will generate
involvement from many different parts of the
CompanyBs organization while assuring commitment
and progress.
Project Team Skills Structure
CompanyB Role
CompanyA Role

• Drive successful project process
• Provide objective advice
• Challenge thinking
• Bring perspective/expertise

• Sponsor progress/direction
• Review/discuss options and trade-offs
• Make decisions

Project Sponsorship

• Lead project within Client
• Assure access to data
• Organize/ manage resources
• Provide push where necessary

• Organize and manage
• Drive day-to-day activities
• Facilitate on-time and on-schedule delivery

Project Management

• Provide best thinking
• Assist in defining current supply chain
  performance
• Participate in defining opportunities/scenarios

• Facilitate workshops
• Provide best practices
• Provide point expertise knowledge
• Challenge thinking

Subject and Business Experts

• Participate in data collection analysis
  preparation of discussion documents
• Access to internal information
• Actively participate in formulation of options,
  presenting to management

• Structure/manage data collection and analysis
• Document As-is
• Facilitate team work, communication
• Structure/prepare discussion documents
• Generate To-Be and Value Opportunities

Project Team Experts
14
Project Team Skills Structure
We have selected a team with a balanced mix of
supply chain skills complemented with key EP and
CompanyB relevant knowledge
Core Team
Extended Team Members
15
Company Overview The CompanyA Vision is To
become one of the worlds leading companies,
bringing innovations to the way the world works
and lives.

• Five Global Market Units
• covering a broad range of industries

Communicationsand High Tech
Financial Services
Government Services
Products
Resources (Energy)
Our Cross Market Unit Service Lines support our
efforts
Supply Chain Management

• We are publicly traded on the NYSE with a market
  capitalization of 19.2 Billion.
• We have 110 offices in 47 countries.
• We employ more than 75,000 people worldwide.
• We deliver World Class solutions and services to
  more than 6,000 clients.
• 23 of the top 25 most profitable companies in the
  world are our clients.
• CompanyA's clients include 86 of the Fortune
  Global 100 and more than half of the Fortune
  Global 500.
• Our revenue in 2002 is more than 13.1 billion.

Solutions Engineering
Solutions Operations
Finance and Performance Management
Human Performance
Technology Research and Innovation
Customer Relationship Management
Strategy and Business Architecture
16
Exploration Production CompanyA has a long
history in helping our Upstream clients maximize
the value across all segments of the business
17
Supply Chain Practice - CompanyA is the largest
and most successful Supply Chain Consulting
organization in the Marketplace delivering value
to clients through an unparallel set of
capabilities
Supply Chain Practice

• Scale and breadth of experience
• Extensive Thought leadership
• Globally integrated with depth in all industries
• Investment in leading edge capabilities and
  offerings
• People Enablement
• Unsurpassed client base and references

Average annual growth of 17.5 from FY00 FY03
18
CompanyAs Supply Chain Management practice has
unparalleled depth and breadth to serve industry
leaders and market-makers globally.
Supply Chain Practice Scale and breadth of
Experience

• 7,000 professionals with supply chain experience
• Over 37 countries
• Network of businesses and resources consulting,
  technology, outsourcing

• Strategic insight
• Process design
• Hands-on operational experience
• Deep implementation and technology skills
• Proven BPO experience

Global Scale
Comprehensive Capabilities
Client
Renowned Industry Expertise
Functional Depth and Breadth

• Supply Chain Transformation
• Supply Chain Planning
• Sourcing and Procurement
• Manufacturing and Design
• Fulfillment

• Decades of focus and market-making across all
  industries

19
Our supply chain work is distributed across all
major industries and geographies, with 1.6
billion in revenue in FY03.
Supply Chain Practice Scale and breadth of
Experience
Industry View
SCT 13

• Chemicals
• Energy
• Forest Products
• Metals and Mining
• Utilities

Fulfillment 19
Practice Area View
Mfg Design 12
Supply Chain Planning 32

• Automotive
• Health Services
• Industrial Equipment
• Pharma Medical Products
• Retail Consumer
• Transportation Travel Services

Sourcing Proc. 24
EMEAI 40
Americas 51
Asia Pacific 9
Asia 9
EMEAI 45
Geographic View

• Communications
• Electronics High Tech
• Media Entertainment

Americas 45

• Banking
• Capital Markets
• Insurance

20
CompanyA has the functional depth and breadth to
help clients leverage traditional as well as
next-generation to build high-performance supply
chains.
Supply Chain Practice Leading-edge capabilities
and offerings
Practice Area
Primary Offerings
Description

• Supply Chain Performance Assessment
• Process Engineering
• Operating Model Design
• Supply Chain Transformation
• Supply Chain Academy

Helps clients rapidly transform their supply
chains to create differentiation and sustainable
competitive advantage targets a significant
increase in supply chain performance as a key
competitive factor.
Supply Chain Transformation

• Supply Chain Solutions Delivery
• Supply Chain Collaboration
• Intelligent Supply Chain

Helps clients develop and implement strategies
that improve cost efficiency, increase business
effectiveness and create synergies and
collaboration across companies.
Supply Chain Planning

• Procurement Transformation
• Strategic Sourcing
• eProcurement
• Procurement Outsourcing (BPO)
• Auction Services
• Private Exchanges Strategy and Delivery

Helps clients design and implement strategies
that transform buying and selling with
differentiating sourcing and procurement
strategies, processes, technologies and
organizations. Additionally, provides business
process outsourcing services.
Sourcing and Procurement

• Product Lifecycle Management
• Service Management/Spare Parts/Warranty
  Management
• Manufacturing Transformation
• Six Sigma

Manufacturing and Design
Helps clients develop collaborative design
capabilities, innovative manufacturing programs,
leading-edge outsourcing approaches, and alliance
relationships to accelerate speed-to-market,
speed-to-volume, and time-to-profit.
Fulfillment

• Integrated Fulfillment
• Managed Supply Chain Services (BPO)
• Silent Commerce (RFID)
• International Cargo Security, Shipment Visibility
  and Identification
• Collaborative Transportation Solutions

Helps clients plan and implement innovative
solutions to traditional "block-and-tackle
challenges in areas such as warehouse management
and operations, distribution network design,
packaging, transportation management, customer
fulfillment and customer service.
21
Our Supply Chain Rapid Response Center integrates
client experience with distinctive CompanyA
assets to make our people and our clients more
powerful.
Supply Chain Practice - People enablement
Inputs
Outputs
Operating Unit Relationships

• Client workshops
• Internal/external research
• Practice areas
• Solution Centers
• Centers of Excellence
• Training

• Tools
• Subject matter expert lists
• Packaged points of view
• Technology architecture
• Supply Chain Value Assessment
• Communications architecture
• Services
• Workshop coordination
• Proposal development
• Knowledge capture and cleansing
• Call center support
• Customized research
• News scans/market watch

CoEs
SupplyChainRRC
SCPA
KCN
Academic Alliances
KM
Training
Integrated Marketing
SC Univ.
Results
Our people are more powerful and effective.

• Winning proposals
• Follow-on work at clients
• Client relationship building

• Marketplace visibility
• Improved access to best project work

• Greater client awareness of CompanyAs supply
  chain capabilities

22
Supply Chain Performance Assessment
Supply Chain Performance Assessment

• The SCPA is a suite of tools designed to help our
  clients achieve insight into their supply chains.
• The SCPA framework incorporates and applies
  CompanyA thought leadership on emerging and
  leading practices in supply chain strategy,
  structure and operation.
• All SCPA knowledge capital is stored in a central
  repository which includes methodology extensions,
  analytical tools, sample deliverables, KPI and
  metrics, best practices and benchmarks
• Provides a quick, fact-based insight into high
  value opportunities
• Unbiased outside party assessment of Supply Chain
  capabilities
• Understanding of where deeper analysis is
  required
• Preliminary projections on potential business
  benefits
• Identifies Quick Wins opportunities to begin
  early value capture
• Management understanding of magnitude of change
  required
• Focuses on improving our clients position in the
  marketplace.

23
Supply Chain Performance Assessment
Our Supply Chain Performance Assessment toolkit
is adaptable to ensure we address your needs in a
rapid and robust fashion
IndustryTrends
Business Impacts
Supply ChainCapabilities
Key PerformanceIndicators
LeadingPractices
Value Propositions
What capabilities must I have?
What are the leaders doing?
What affects me?
How will the trendsaffect my business?
How do I know how well I am doing?
How much is changing worth?

• SCPA connects Business Objectives, Supply Chain
  Capabilities and Key Performance Indicators
  together to produce fact-based improvement
  opportunities
• Leading Practice analysis is used to guide
  identification of opportunities. Standard
  benchmark analyses are not objectives of the
  SCPA.
• Focus on finding value opportunities across
  operations.
• Facilitates gaining consensus on current
  capabilities, setting performance level targets
  and improvement opportunities.

• Our SCPA is not generic. It is customized to
  each clients industry, situation and business
  objectives.
• However each approach can draw upon a common set
  of KPIs, analytical techniques and insights
• Specific analytical tools and methodologies are
  available for individual functional areas.

24
A SCPA spans the functional core of the supply
chain, and considers key strategies across the
supply chain - the scope can be tailored to meet
Your Companys specific requirements.
Supply Chain Value Assessment
- Supply Chain Performance Assessment Scope -
Integrated Demand and Supply Planning
Physical Infrastructure
Customer Service Support
Sourcing Procurement
Warehousing Distribution
Manufacturing
Transportation
Product and Process Development
Performance Management
Product/Material
Cash
Information
Principal Scope
LimitedScope
25
The SCPA includes a number of methods for data
gathering and analysis in order to rapidly
integrate inputs from a wide range of people and
to reach consensus on the outcomes
Supply Chain Performance Assessment
Management Interviews
Survey Questionnaire
Audience All senior management selected
operations personnel, functional and product
managers. Purpose To gain first hand knowledge
of current procurement and logistics
capabilities, strengths, weaknesses, levels of
awareness, process models and areas of
improvement. Outcome Comprehensive
understanding of current performance and possible
opportunities within each function.
Audience Personnel from across all operations,
including senior management, sourcing,
procurement, warehousing, distribution and
supporting services. Purpose To provide an
internal assessment of procurement and logistics
performance compared to best practice and to
provide a means to identify what the "required"
level of performance should be for each
functional area. Outcome An agreed assessment
of procurement and logistics capability relative
to best practice.
Customer Interviews
Leading Practices
Audience Key internal and external customer
personnel responsible for reviewing and managing
the operations using logistics services Purpose
An assessment of how the customers perceive the
services, performance levels, relationship and
cost, and gain insight into their needs and
competitive alternatives Outcome A perspective
of the customer needs and identification of key
issues
Audience Both management and operations of each
functional area Purpose An assessment of
performance measures across functional areas,
their visibility in the business and an
identification of the most appropriate measures.
Identification and comparison of leading
practices. Outcome Assessment of current KPI
awareness, quantification of internal KPIs and
processes and comparison to selected external
leading practices and benchmarks.
Quantitative Analysis
Workshops
Audience Management and operations personnel
from individual businesses and across the
organization. Purpose Multiple workshops will
be held throughout the review with differing
opportunities which include establishing
awareness of the project, agreeing current
capabilities, setting target levels, identifying
opportunities, and gaining consensus on
opportunity areas and strategies. Outcome
Comprehensive buy-in across the organization for
the recommendations of the review.
Audience Management personnel and nominated
analysts from each functional area Purpose
Analyze current operations to illustrate current
level of performance, cost breakdown, etc to
identify key issues and areas of improvement.
Outcome Fact basis to support final
confirmation of current capabilities,
determination of target levels and identification
of potential opportunities.
26
Supply Chain Performance Assessment Sample
Deliverables
The quantitative component compares your key
operational and performance metrics against
internal and external best practice.
Illustrative
By comparing the organizations KPIs internally
and with best practice . . .
. . . an estimate can be made of the benefit
potential that can be obtained through supply
chain improvements.
OVERALL SUPPLY CHAIN - WHEEL OF FORTUNE
ON TIME DELIVERY ()
100
90
80
PRODUCTION COST PER TON
CAPITAL PRODUCTIVITY ()
70
On Time Delivery
Forecast Accuracy
60
50
40
30
20
10
SUPPLIER MANAGEMENT COST ()
TOTAL DISTRIBUTION COST PER TON
0
WIP
Inventory turns
INVENTORY TURNS
FORECAST ACCURACY ()
EQUIPMENT DOWNTIME ()
Equipment Availability
Scheduled Maintenance
27
Supply Chain Performance Assessment Sample
Deliverables
The assessment also takes into account the
different perspectives of each function to
identify varying levels of satisfaction or
understanding.
Illustrative
Toward World Class
Process
Organizational
Technology
Capability
28
Supply Chain Performance Assessment Sample
Deliverables
A high level business plan will be developed for
identified opportunities
Projected
Quick Win
Potential Project Benefits
Illustrative
Benefits m
Benefit Range
Benefit Category
Baseline m
Low
High
Working Capital

• WIP/other inventory reduction
• Finished goods inventory reduction
• One time cash flow impact
• Increased sales
• Reduced cancelled orders
• Reduced obsolescence
• Reduced inventory carrying costs (_at_cost of
  capital)
• Reduced discards
• Distribution costs
• Transportation costs

40 150 1500 20 10 150 20 100 30
20 50 20 100 30 25 100 20 50
2-6 3-15 1-2 2-3 1-2 5-10 10-20 3-
5 1-3
0.8 4.5 5.3 15 0.4 0.1 7.5 2 3 0.3 33.6
2.4 22.5 24.9 30 0.6 0.2 15 4 5 0.9 80.6
Revenue
Costs
Recurring Annual Total