Supply chain visibility in the energy and utilities industry

For the energy and utilities industry (E&U), time is not on their side. Equipment-heavy and reliant on an aging infrastructure, E&U clients suffer from costly supply chain disruptions as wear, tear and time take their toll. But with the right tools, tactics and collaboration, it doesn’t have to be this way. The key? Visibility.

Simply knowing what maintenance repair parts, you have in-stock, at what levels, and in which locations, can mitigate a big portion of the possibility of unexpected downtime. However, maintenance inventory optimization is only part of the solution. Visibility into other key inventory (e.g., safety equipment, parts for trucks, and raw materials for infrastructure), weather events, customer demand levels, and logistics can help prevent disruption in operations, too.

• Transformer prices have doubled, while the average lead time for delivery has at least tripled from what it was two years earlier, reaching 52 weeks in some cases.

• Many water utilities are struggling to obtain computer chips for their water trucks, as well as other vital daily supplies.

• The cost of an outage for large companies can be millions of dollars per hour of downtime. Department of Energy estimates that outages cost the U.S. economy $150 billion annually.

• Electric power companies are draining inventories as they continue to upgrade equipment, while replacements are often delayed.

• 72 percent of water utilities are facing difficulties obtaining pipes or other infrastructure components.

1. Anticipate and take action

Identify and understand the impact of external events to predict disruptions, and take actions based on recommendations to mitigate the upstream and downstream effects.

2. Improve forecasting accuracy

Develop a good understanding of materials needed for infrastructure expansion or transportation of services/goods and ensure stock levels are sufficient.

3. Automate to ensure consistent service levels 

Without real-time demand sensing combined with visibility into performance across supplier networks, increasing grid/energy demands for consumers and growing communities can lead to product excess or shortages.

4. Ensure maximum maintenance reliability

Improve maintenance crew productivity by providing the parts they need when they need them. Optimize spares inventories and consolidates across regions and distribution centers.

IBM MRO IO can reduce unplanned downtime and prevent costly outages, by ensuring on-site availability of critical materials and spares to keep round-the-clock operations running. Additionally, learn how to cut MRO inventory-related costs by eliminating inefficiencies, sharing critical spares across geographical regions, and reducing non-essential parts inventory. All of which can lead to reduction in asset downtime, maintenance budget savings, reduction in inventory costs, and an increase in service levels. See IBM MRO IO in action by reading about how Shell and IBM jointly developed and launched Oren, a global B2B mining services marketplace platform to gain more productivity in the $190 billion mining industry.

Explore the IBM Control Tower to understand how energy and utilities firms can identify and resolve critical supply chain issues faster with end-to-end visibility, advanced analytics and actionable workflows. Learn how the IBM Control Tower:

• Reduces time needed for critical supply chain disruption management from days to hours
• Optimizes performance across suppliers to accurately respond to consumer demand
• Increases equipment efficiency with better visibility into operations
• Reduces operational costs and minimizes disruptions

Bringing resilient and sustainable supply chains to life requires a consulting partner with deep ERP expertise, and knowledge of how AI, automation, IoT, blockchain, and weather combine to improve accuracy and productivity, while also reducing IT complexity, resource consumption and costs.

IBM Consulting is a global leader in supply chain consulting with a global ecosystem of
partnerships, proprietary access to IBM’s own technology, research and Expert Labs. Our industry expertise, end-to-end approach from strategy to implementation, and dedicated sustainability practice, ensures your supply chain can adapt to today’s challenges and prepare for future opportunities, while minimizing risks, reducing costs, and driving continuous improvement in both environmental and social performance.

IBM Consulting helps the world’s leading Energy and Utilities companies like Neste and Shell design and build transparent, intelligent, resilient and sustainable supply chains that enhance efficiency, and deliver tomorrow’s energy solutions.