News & Research: Client Successes

Case Study: Materials Management Leading Practice Assessment

A major, integrated electric utility in the Northeast requested that ScottMadden conduct an independent assessment of current best practices in supply chain organization across leading companies.

• Utilities today face increasing demands to reduce operating costs, while maintaining or increasing reliability and customer service. Meeting these demands means examining every opportunity to drive operating efficiency and improve performance. One way to help achieve these objectives is to optimize asset management, including the utility's MRO inventories
• The electric utility's supply chain management team requested that ScottMadden conduct a high-level assessment of the company's current materials management practices. The objective was to compare the company's practices to available best practices and identify opportunities for improvement. The assessment was conducted separately for both the Generation business unit and the T&D business unit
  
  

• ScottMadden maintains a proprietary database of more than 300 leading practices in the area of materials management. This database was used to compare the electric utility's current practices to supply chain leading practices
  
• The results were summarized into leading practice adoption (LPA) scores for each of the following areas:
  • Inventory management
    • Planning and replenishment
    • Parts management
    • Inventory optimization
    • Obsolescence and investment recovery
  • Warehouse management
    • Facilities and layout
    • Receiving and put-away
    • Picking and issuing
    • Packaging and shipping
    • Returns and reverse logistics
  • Transportation management
    • Inbound transportation
    • Outbound transportation
• These scores were analyzed and served as the basis for the team's recommendations

• Sorted and prioritized individual practices and focused on those with the greatest performance gap as well as the greatest potential for positively impacting future operations
• ScottMadden recommended that the client implement these high-impact best practices. The client subsequently integrated these changes into its improvement plans for the following year