Sourcing

The energy utility supply base historically has been a built-in shock absorber on rate increases, a place where continuous improvement could occur and price concessions extracted. Today, however, as we move into the top of the cycle for utility infrastructure build-out, the supply market has turned on utilities with a vengeance. The twin shocks of rising commodity prices and emerging labor scarcities have all but eliminated the “low-cost bid” era. Utility project managers everywhere are asking: “How do we explain these budget increases?”

Oliver Wyman has assisted many companies in addressing these business challenges in the areas of:

Leveraged procurement
Value sourcing
Supply integration
Supplier relationship management
Process workouts
BenchmarkingOrganization design
Post-merger integration

Recent engagement examples

Supplier relationship management: Oliver Wyman assisted two merging utilities in rethinking sourcing strategies and supplier relationship management programs across the combining companies. Results led to the identification of $75M+ in pro forma savings across T&D and corporate center purchase categories.

Supply chain strategy: Oliver Wyman has developed sourcing and inventory strategies for literally the entire utility spend tree, yielding significant operating cost savings.