Success Stories

Electric Utility Harnesses the Power of its Supply Base

Client:

A major electric utility company

Challenge:

To seek out ways of reducing costs in the supply chain

Solution:

After various studies, CSC devised a new supply chain process.

Results:

A target savings of $40 million for the client.

CSC worked with a major electric utility company to harness the power of its supply base through strategic supply techniques. Deregulation of the utilities industry had led to an increasingly competitive environment and the need to seek out ways to reduce costs in the supply chain. CSC helped the client define the role of strategic supply within the business and developed a program and organization to take full advantage of the opportunity.

Approach

The effort began with a strategic supply diagnostic. The current procurement process was reviewed and a new process for strategic supply was developed by the joint CSC/client team. A thorough company-wide spend analysis was performed and material categories with high savings potential were targeted for detailed analysis.

Following the diagnostic, an implementation program was initiated. The implementation involved the following key aspects:

Setting-up an organization and governance structure to manage all strategic supply activities going forward
Developing and delivering a training course for all team members
Putting in place a comprehensive communications plan to ensure that the organization was fully behind the initiative
Chartering a number of strategic supply teams to address the high potential material categories, once the above systems and structures had been developed and deployed

Results

Three strategic supply teams have tackled commodity groups such as transportation, wire and cable, and line construction contractors. They continue to work towards a total program savings target of U.S. $40M. The initiative is considered so vital to the business’s future competitiveness that the CEO has approved an additional six strategic supply teams and personally oversees the teams’ progress.