A Fortune 500 Oil and Gas Major Achieved an Improvement in Procurement
V G • Dec 13,2024
Summary:
With advanced features like cost modeling, supplier insights, and real-time market intelligence, an AI solution enabled the company to strengthen its category strategies, effectively balancing cost, risk, and sustainability to maximize value.
Client:
A Fortune 500 Oil and Gas Major
Problem Statement:
For a Fortune 500 Oil & Gas Major, procurement inefficiencies were leading to missed opportunities and higher operational costs. The company’s approval process was highly inefficient, requiring over 70 approvals to handle data across various systems, leading to significant delays in business operations. Additionally, limited visibility hindered their ability to effectively oversee and manage contracts.
Recognizing the potential to enhance procurement Return on Investment (ROI), the company was searching for procurement and supply chain solution.
Results:
- Consolidation of 15 custom solutions into 2 systems in S2P.
- 20% increase in eSourcing adoption.
- 15% Improvement in Procurement ROI.
- Faster response to go-to-market outcome with AI and automated alerts.
- Real-time insights to drive optimal procurement performance.
AI Solution Overview:
The procurement team collaborated with GEP to streamline and digitize their processes, establishing a cohesive data model that became critical to the company’s future growth. This unified model allowed the organization to take a comprehensive view of its procurement operations, identifying new opportunities for cost savings and operational efficiencies. GEP assisted by locating physical contracts across all plant locations and digitizing them to create vendor and service provider catalogs. This enabled the company to implement catalog-based purchasing, ensuring they could procure items at pre-negotiated or contracted prices. The strategy prioritized a phased rollout, starting with sourcing to deliver immediate benefits, followed by the implementation of procure-to-pay for a seamless transition. GEP also provided in-depth insights into the client’s procurement lifecycle and go-to-market strategy.
GEP implemented its proprietary Intelligent Category Management (ICM) platform as the central tool for category managers. The ICM system consolidates all category-related tasks into a single platform, offering enterprise-wide transparency and delivering comprehensive insights, including market data and strategic guidance, for every category throughout the procurement process.
GEP’s ICM platform empowered category managers to better analyze trends, manage supplier relationships, and address category risks, enabling the company to reduce overall costs and align category strategies with broader organizational objectives. By leveraging cost modeling, supplier insights, and market intelligence, the company achieved an optimal balance of cost, risk, and sustainability. The core benefits of ICM include cost reduction, improved collaboration, enhanced sustainability, streamlined sourcing processes, and effective risk mitigation.
References:
- How a Fortune 500 Oil & Gas Major Partnered With GEP To Achieve a 15% Jump in Procurement ROI. https://www.gep.com/case-studies/thank-you?sourcenid=8555&type=case_study&source_pageurl=https%253A%252F%252Fwww.gep.com%252Fcase-studies%252Fhow-a-fortune-500-oil-and-gas-major-partnered-with-gep-to-achieve-a-15-jump-in-procurement-roi%253Fajax_form%253D1%2526_wrapper_format%253Dhtml
Industry: Oil & Gas Industry
Vendor: GEP
Client: A Fortune 500 Oil and Gas Major