Energy company captures $240M in cost savings
A multinational energy manufacturer transforms procurement sourcing and spend with intelligent procurement processes.
With the global energy transition underway (the shift from fossil-based systems of energy production and consumption to renewable energy sources), a multinational energy company wanted to leverage digital technologies to enhance business processes and increase efficiencies.
In order to prepare for the digital transformation, the company needed a strategic plan. As a first step, the company launched an initiative to identify $1 billion in costs to be streamlined. Procurement was identified as one of the biggest value streams.
They turned to Accenture, a longstanding partner, to help identify where they could save $240 million (over a two-year period), as well put a plan in motion to capture it. The team used SynOps, Accenture’s platform that connects and orchestrates intelligent technologies, talent, and data and analytics, to accelerate the move to intelligent procurement processes that provided real-time insights and analytics.
The energy manufacturer identified three areas that needed improvements: category management, sourcing and spend analytics. This scope included a mix of traditional indirect spend and manufacturing operations spend across 75 subcategories. With the objective to maximize costs savings, the team put foundational tools into place, such as operational reporting and control frameworks.
Optimized the STC process by integrating automation and standardization into the sourcing pipeline.
Improved sourcing decisions by developing cost models and benchmarking that uses real-time data – resulting in increased spend data accuracy and visibility across 400 suppliers.
The energy manufacturer now has intelligent procurement processes in place which have delivered $240 million in savings and laid the foundation for further improvements. The company has also realized other business benefits:
of service level agreements were met and a 100% quality score was netted as a result of robust quality, control and compliance.
reduction in the average sourcing cycle time (from six months to three months), which contributes to better relationships with the business units to collaborate with corporate procurement.
of contract and spend compliance was increased, which positively impacted the cost savings goal.