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CPO and CSCO leading Regional Integrated Procurement & Supply Chain Operations function with annual total direct and indirect spend of $500 million (incl. $200m CAPEX), $100m inventory and team of 70 to ensure effective construction, operation and maintenance of 12 power plants in European Strategic Business Unit of AES Corporation

Procurement

Supply Chain Operations

Situation

  • Procurement and Ops are not aligned. Procurement is not perceived as a business partner and contributor

  • Projects are fulfilled with delay. Lack of ownership from Procurement and work of markets in syloses

  • Alarming single/sole source situation per plants

  • Fixed costs increasing unproportionally to top line growth

  • Procurement results are not visible. Collaboration between Global and Regional functions needs improvement

Task

  • Develop long-term strategic procurement planning and liaise with operations & maintenance activities and projects

  • Improve Category Management and create Procurement Center of Excellence to develop capabilities

  • Streamline and automize Specify-to-Settle processes and support new tools and systems adoption

  • Take control on timelines, prices and SRM in the $200m Capex budget and deliver productivities to Ops costs

  • Improve financial performance of $300m direct and indirect OPEX and $100m Inventory stock 

  • Improve cross-functional communication and set up sustainable customer-focus practices at all plants

  • Improve collaboration between Global and Regional functions and align clear metrics to reflect results and set visibility

Action

  • Developed 5-year procurement plan connected to operations & maintenance multi-year plan 

  • Mapped Purchasing Categories and aligned Strategies to Ops Projects Scorecard (STACE) and Asset Management STD 55001

  • Started Shared Services Center in Sofia and centralised SBU function transiting smoothly from plants to central location following Management of Change standards

  • Delivered CI Process Improvement Project in strategy-to-plan, source-to-contract, procure-to-pay and order-to-cash

  • Adopted new cloud tools in projects planning (CAPEX Projects Web-Tool), sourcing and buying (SAP Ariba), analytics (MS BI)

  • Developed strategy and executed Long-Term Service and Parts Tender with OEMs Ansaldo, Alstom (GE), Siemens, Fuji,Wratsila

  • Managed strategy, procurement, contract, logistics and SRM for Capital Construction EPC Projects in Solar (Jordan), Wind (Bulgaria)

Result

  • Project planning, timeliness, supply risk and resource management put in place

  • Transaction cost optimised by 50% and total cycles administration by 25%

  • Maintenance Contract costs for critical and valuable assets optimised by 20%

  • Procurement contribution delivered at the rate $0,2 cent EPS and savings tracking, locking disciplined

  • New Cloud systems and tools implemented adoption rate reached 80-90%

  • Stakeholder’s alignment and satisfaction rate improved to to 85% in 12 months

  • Effective SBU cross-function collaboration reached due to RACI, OKR and One Team Approach Com regularized

  • Regional function integrated Global Procurement organisation and Global KPI Dashboard aligned

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