If nothing else, the supply chain in the utility industry differs from others in the sheer number of customers it has to deal with, and daily. But customers aren't solely external, says Rafael Soto-Amaro, supply chain operations manager at PG&E. Internal customers have to be served, and sales and operations planning and demand planning help meet their needs.
If the large number of customers sets the utility industry apart from most other verticals, says Soto-Amaro, the reality is that the industry shares some similarities with other businesses, including the need to provide high customer service, promptly and properly fulfilling orders and being environmentally responsible.
With such a large footprint as PG&E's, failure to have an integrated process to balance demand and supply is simply a recipe for disaster, he says. Obviously, a utility has end users, but it also has internal customers requesting needed materials. Lead times have to be carefully factored into the equation. "I put my money on S&OP and demand planning," says Soto-Amaro. "You need to find that sweet spot in order to balance them."
It was somewhat of a challenge that there really was no utility industry benchmark available so Soto-Amaro when he assumed control of PG&E's supply chain organization. So he sought to implement S&OP into the supply chain organization. "It was really difficult to find some learnings."
Going forward,it was determined that customers had to be prioritized. Working first with the company's top 10 users, the supply chain team was able in the first 15 months to achieve and then surpass their goals, including a 97-percent line-fill rate. Moreover, no company-wide projects were delayed in any way due to the supply chain organization, he says.
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