Thursday 20th Oct 2016 - Logistics Manager

Energy boost for electricity distributor

Electricity distributor UK Power Networks has improved on-time, in full performance from its suppliers and boosted customer service after moving to Wesupply’s outsourced B2B web-based platform to manage its procurement cycle.

UK Power Networks owns and operates the network of underground cables and overhead lines which distribute electricity in London, the east of England and the South East.

The company undertakes the infrastructure build and maintenance work between the pylons of the National Grid and the domestic or commercial end user. A fast and efficient supply of materials to its 3,500 field engineers and project managers is critical to maintain service levels to customers.

UK Power Networks has an annual logistics spend of around £100 million and wanted to simplify the communication of purchase orders to suppliers by moving away from time consuming manual processes.

The company needed to improve performance to ensure it hit its set targets, so in 2008 embarked on its Inventory Visibility Project.

Nigel Rouse, head of logistics at UK Power Networks, says: “What we were looking for was a web-based supply chain approach, an invoice matching and communications solution that could manage the life-cycle of an order right through to payment.”

Key to the transition to Wesupply’s OneTime system was that it interfaced with UK Power Network’s main SAP system so that the whole sales cycle and procurement cycle were integrated.

Rouse says: “The more information you’ve got, the more firm you can be about planning when a customer is going to get their goods…The advantage of Wesupply is that it’s a flexible solution and a low-cost process relative to the configuration complexities of a mainframe system.”

Initially the plan was to automate purchase order management for the company’s top 35 material suppliers, representing about 80 per cent of transactions by value and activity, but further suppliers can be brought into the system as the supply base changes.

Wesupply is also now in the process of implementing a dashboard of supplier KPIs that will enable UK Power Networks to monitor supplier performance, driving improvements in the on-time, in full performance of suppliers, which will help the company upgrade its own on-time in full ratings to customers.

The process works as follows: A purchase order raised by UK Power Networks is sent by the system to a supplier. The supplier will then send back an acknowledgement with notification of the exact quantity to be sent and the scheduled date of delivery. Prior to goods being dispatched by a supplier an Advanced Shipment Notice (ASN) is sent to UK Power Networks. When the goods are received at UK Power Networks they are checked against the ASN to ensure that everything that was shipped has been received and a goods receipt note is generated by the system and sent to the supplier. Finally, the supplier can create and send an invoice online via Wesupply using the data used from the ASN.

Wesupply’s web-based platform is designed and built to understand messages – rather than just deliver them. It can, for example, send alerts to suppliers to remind them that goods need to be dispatched or notify UK Power Networks’ inventory planners if a supplier’s ASN indicates a shortfall in supply.

In addition to generating alerts and checking for mismatches in data, the set of dashboards and supplier KPIs that are being installed will offer an insight into each supplier’s performance.

“Subscribing to the Wesupply service has enabled us to collaborate closely with our suppliers. Not only does this help our suppliers to manage cost based on accurate and timely orders, but it also helps us to provide an even better service to our customers,” says Rouse.