Ease of Doing Business: From Concept to Reality
By: Tim Cummins, IACCM
“As a services company, we must be innovative to compete.” That’s the view of Anthony Aming, Enterprise Business & Applications Architect at Baker Hughes, a major provider to the oil and gas industry. There are innovation groups throughout the company and it is one of these that emerged as the winner for ‘Internal Collaboration’ in the recent IACCM / Procurecon ‘Collaborate to Innovate’ Awards program. | |
Anyone in business understands the importance of getting paid – and the frustration that this can often entail, especially when dealing with large corporations where no-one seems to be responsible. Suppliers also appreciate customers who are well organized and communicative, avoiding last minute ‘panics’ and crises. These characteristics go beyond pure ‘ease of doing business’; they have a direct impact on efficiency and costs.
In order to achieve these positive behaviors, an organization has to display internal collaboration – and that is what Baker Hughes did when they developed a real-time monitoring and management system to increase visibility into areas such as DSO and inventory levels. This project has resulted in visibility throughout the business into the status of payments, levels of inventory, typical lead-times and frequency of change orders. And the consequence for suppliers is that they are getting paid on time and there has been a major reduction in unplanned or ‘rush’ orders.
“People throughout the business now have dashboards that show current status and performance. They also have auto alerts and clear escalation procedures to ensure good performance,” Anthony explained. “This has delivered savings to the supplier – but also to us, because we now optimize inventory in ways that conserve cash, but also prevent costly delays or panic purchases.”
The project was not without its challenges, but these were primarily related to people, not the technology. One of the biggest obstacles was making sure that data was entered accurately – and this required a concerted effort to educate and show the business benefits. “Process changes take time,” Anthony observed.
The benefits that come from driving cross-business initiatives of this type are many – and this project has reduced costs, increased on-time deliveries, and improved supplier relationships. “It has allowed us to reach a place where suppliers want to help us. It has taken us beyond the contract and brought more sophistication to our supplier relationship management.”