View attached explanation and answer. Let me know if you have any questions.SUPPLY CHAIN: ARAMCO VS SABIC1Supply Chain Management: Saudi Aramco VS SABICStudent’s NameProfessor’s NameInstitutionCourseDateSUPPLY CHAIN: ARAMCO VS SABIC2Supply Chain Management: Saudi Aramco VS SABICSaudi AramcoThe world’s major oil producer is Saudi Aramco. The corporation is primarily stateowned and is headquartered in Dhahran, Saudi Arabia. Saudi Aramco holds the world’s secondbiggest confirmed crude oil reserves and the world’s largest proven natural gas reserves.Saudi Aramco manages the Master Gas System, the world’s most extensive singlehydrocarbon network. Its activities comprise natural gas exploration and crude oil, production,and processing, refining, natural gas fractionation, petrochemical manufacture, and petroleumproduct distribution and natural gas (Kavthankar, A., & Perepu, 2021). Saudi Aramco maintainsa pipeline, bulk plant, air refueling station, and terminal network. In the Kingdom of SaudiArabia, the firm also runs power plants and related transmission and distribution systems.SABICSABIC is a global firm that produces a wide range of chemicals. It has operations in over50 countries, and its headquarters are in Riyadh, Saudi Arabia. Saudi industries are located in theeastern province of Jubail and the western province of Yanbu. SABIC is a global leader inethylene glycol, methanol, ethylene, MTBE, polyethylene, engineered plastics, and theirderivatives (Al Mudhayan et al., 2019). SABIC’s most strategic business segment,petrochemicals, accounts for most of the corporation’s general output. SABIC’s four divisions arepetrochemicals, specialties, agricultural fertilizers, and minerals.Supply Change Management IssuesAramco:Supplier: The Aramco supply chain is truly global. That is why there is a manual for anysuppliers coming along in the future. The Supplier Network Collaboration site is another handySUPPLY CHAIN: ARAMCO VS SABIC3feature (SNC). Purchase orders, tracking of inventories, supplier approvals, analytics,agreements, and terms & conditions are all seen by suppliers (Material Supplier Guide, n.d). Thatfacilitates the display and management of the movement of products/services, information, andfinances between Aramco and its suppliers. The suppliers, however, are experiencing severalchallenges. So as to enhance their local purchase from Saudi manufacturers and theirSaudization, foreign firms operating in Saudi Arabia are required to apply IKTVA (In-KingdomTotal Value Add) (doing business with Saudi Aramco). If a company fails to fulfill the Aramcoprocurement and localization quota, it will be barred from participating in the oil giant’s supplychain (Olawuyi, 2018). Suppliers have also reported problems with Aramco making payments.As a result of exchange rate discrepancies between the quoted currency and the currency inwhich Aramco is ready to pay (SAR, UDS, Euro, or Japaneseized Yen), they are delayed inreceiving payment (Material Supplier Guide).Purchasing: International businesses’ reliance on Saudi manufacturers has increased by threesince the introduction of IKTVA. Aramco utilizes the buying cycle, although the process is timeconsuming due to the company’s meticulous scrutiny of each stage to guarantee compliance withIKTVA (Material Supplier Guide, n.d).Logistics: Aramco has four different logistical strategies when dealing with its suppliers.However, only a Saudi citizen representative of the su…
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