The procurement and supply-chain functions of today’s utility are the Rodney Dangerfield of the utility cost-cutting paradigm: They don’t get any respect. Supply chains in most industries extend...
The Next Level of E-Procurement
Utilities must embrace supply chains that include planning, inventory optimization, and logistics.
on the technology, the experience and the personnel of outside agencies to perform those non-core business functions more effectively and efficiently.
The virtual utility is radically and positively changing the way the utility industry currently views supply chains and is moving the industry far beyond its fundamental e-procurement roots. Companies are no longer required to hold their own inventories all the time. They don’t need warehouses for all of their plants. And they no longer need backup parts on site all the time.
Instead the utility is seeking, through technology, to connect demand patterns from work management solution into the supply chain system and out to partners’ systems. The technology enables visibility and planning and understanding of capacity, logistics, and performance across all systems.
And the best news is that the technology that enables this transformation is not out of reach for most utilities’ investment programs. It’s typically provided by other agencies (the third party) and paid for by the savings that result from the arrangement. The technology also is Web-based, enabling widespread cooperation among vendors, customers, and management.
The integrated supply chain is far from a pipe dream. Indeed, the increased pace at which it is implemented and the faster speed at which savings flow from it are just around the corner.