We work with our clients to address pressing issues around emerging technologies and renewables, networks and capital investment logistics, as well as analysis on market and regulatory reform, to help them capitalise on new opportunities.
Power Company Surges Ahead
When a power company was entering a new regulatory period, the CEO posed the challenge to deliver on the required outcomes at a significantly reduced cost.
Entering a new regulatory period, a utilities business had approval for a substantial increase in both its operating and capital expenditure.
However, guidance from the CEO and Board was to deliver on the outcomes promised in the regulatory submission and at a significantly lower cost.
A challenge to achieving this goal was that the procurement function was perceived as uncommercial, focussed on process rather than outcomes and was not well regarded across the organisation.
Analysis of the company’s external spend identified significant latent value across the supply chain. Poor practices were also identified in relation to supplier management especially as it related to the management of quality issues in key equipment.
Extending its remit into reviewing internal efficiency, the team also identified opportunities for cost reduction in the supporting corporate functions.
Significant upside could be captured by developing and implementing a professional procurement capability to support the delivery of the capital program as well as to drive efficiencies through the business.
Resources were recruited to bring a professional, commercial approach to procurement.
This was enabled by a procurement framework focussed on delivering outcomes rather than simply following a process.
Over the first four years, $190m in contracted benefits were secured by the team.
Integration with the network delivery team supported the delivery of the capital program, especially in the development of strategic supplier engagement models for delivery of more complex programs.