Founded in 2017 as a joint venture, GP General Procurement Company Limited (GenPro) is an independent procurement company. GenPro's objective is to negotiate framework supply agreements with international ship suppliers, ensuring BSM’s customers benefit from optimal prices for maritime products and services worldwide. In addition, the company actively advocates for the establishment of more sustainable supply chains.
Published on 18 Apr 2024
Initially representing a joint fleet of over 800 vessels, GenPro swiftly emerged as a pivotal player in the maritime procurement landscape. Today, the alliance has expanded to five additional member companies and GenPro's global buying power now extends to representing a fleet of more than 1000 ships.
In this interview, GenPro Director Clara Chan shares her insights on the advancements of recent years and her perspective on the imminent challenges confronting the maritime procurement sector.
Q: How do you save money for your clients?
Clara Chan: Until today, GenPro has negotiated more than 290 framework supply agreements, covering all major vessel related cost categories associated with the operations of maritime business offshore and onshore.
The savings our clients enjoy are achieved through competitive pricing, annual volume discounts where applicable and specified quality standards in our terms and conditions. Furthermore, the extent of these savings depends on trading patterns, contract utilisation rates and other particular conditions.
Our cost-saving calculation assesses our GenPro contracted prices against the prices in purchase orders prior to our involvement. We monitor the competitiveness of our agreements by analysing statistical data for key cost areas and market intelligence gained from strategic tenders or continuous price benchmarking.
Overall, we achieve an average of 7% in savings where certain vessel types, for example container ships, can benefit from up to 10% savings for OPEX categories subject to GenPro agreements.
Q: What is the next big challenge in procurement?
Clara Chan: With more companies adopting environmental, social, and governance (ESG) metrics, pro-environmental behaviour is evolving into the norm, increasingly permeating supply chains. This means that clients have an interest in improving the sustainability in their supply chains and make them more transparent and traceable. This is where GenPro comes in, too. In addition to mandating full compliance with all regulations, we started in 2020 to place a growing emphasis on supply chain sustainability.
Our plan is to provide supply chain transparency through strategic partnerships with clients and suppliers. For a start, we focus on our first-tier suppliers who provide to the vessels. The intention is then to move on to the second-tier and third-tier suppliers, the manufacturers.
Q: How do you achieve greater supply chain sustainability?
Clara Chan: Genpro employs a multifaceted approach. We utilise audits, scorecards and training webinars to ensure a compliant and sustainable supply chain.
Our audits evaluate factors such as working conditions, labour practices and environmental compliance. By examining these aspects, Genpro helps companies identify areas of improvement and potential risks within their supply chains.
In addition, we have established the Sustainability Balanced Scorecard (SBS) to measure a supplier’s status, compliance, commitment and performance towards sustainability.
Our webinars serve as a knowledge-sharing platform, providing companies and their suppliers with valuable insights into industry best practices and emerging trends in sustainability. One example is the introduction of our Lube Service Desk. In addition to our reports which are tailored to clients’ purchasing profiles, we host, in cooperation with lube oil majors, interactive webinars addressing clients’ specific areas of interest and sharing market intelligence specifically related to the marine lubricants sector.
Based on our evaluation, we provide our suppliers with customised plans to enhance their compliance and sustainability performance.
We share the audit and scorecard results with our clients. This transparent evaluation gives them a clear idea of how suppliers operate allowing for informed decision making. At the same time, it incentivises both sides to adopt more sustainable practices.
Q: How do clients utilise the results you provide?
Clara Chan: Clients can choose the suppliers based on the audit and scorecard results. We observe that some client segments tend to be more advanced than others when it comes to more sustainability in the supply chain. Our last report showed Lubes to be in the lead while Shipyards have the most room for growth when it comes to sustainability readiness.
GenPro calculates its clients’ compliance and sustainability readiness as well to see which supplier categories they need to improve. © BSM
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