Supply Chain leadership and it�s contribution to High

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					Supply Chain leadership and it’s
contribution to High Performance
Business – in Utilities
             Aim of this session
• To discuss how the Supply Chain opportunities in
  Utilities are not exactly the same as in other industries
  (retail, products, etc.)
• To show some of the experiences and practices from
  other industries are relevant
• To show there are other, more relevant, opportunities in
              Many ‘traditional’ supply
              chain practices are still
              relevant and valuable
• There are many supply chain practices that have been
  proven to deliver value in Utilities, but still haven’t
  achieved great penetration, for example:
   – Strategic Sourcing - savings of 10-20% in spend on materials and
     many non-contractor services
   – Electronic Reverse Auctions – can reduce the effort to achieve the
     Strategic Sourcing savings above and sometimes increase them
   – Logistics Network Rationalisation and Optimisation - can reduce
     opex costs and inventory (by up to 75%) and improve reliability of
     delivery to the point of need
               Some best practices are
               less relevant
• For example, ‘Supply Chain Planning’ is the forecasting
  and sharing of demand information across a supply
• This is less practical for utilities due to:
   – The lack of Bills of Materials (e.g. for a Sewage Treatment Works
     versus a car)
   – The lack of vertical focus in suppliers’ industries
   – E.g. The tyre manufacturing industry has a heavy focus on the
     automotive industry, each car needs 5 tyres, so it is worth establishing
     systems to share forecasted and real-time demand information
            The core business of
            Utilities is Asset
• In the automotive industry the people are located in a
  factory and all materials come to them
• Utilities people need to be sent to where the assets are
• Materials need to be sent to these remote locations at
  the time when they need them
• Information needs to be captured about the status of
  work and the state of the assets
            New technologies are
            enabling optimisation in
            these areas
• Utilities have always managed to complete their work in
  a safe manner
• However new technologies are enabling the same work
  to be completed at 15-20% lower cost
• Additional efficiencies are then achievable by having a
  more accurate schedule of work to send materials, and
  by enabling requisitioning of materials from the point of
              There are some challenges
              in achieving these
              significant benefits
• Degree of cultural and capability change required in the
  Field Force
• Getting the processes right
• Managing the challenge of intermittent connectivity
• Making best use of existing investments in back-office
   –   Work management
   –   Asset management
   –   Document management
   –   Safety
• Meeting the needs of all workforces
• Maintaining security
• Accommodating future changes in people, processes
  and technology

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