ChevronTexaco makes the most of centralized spending
By Staff -- Purchasing, 3/21/2002 2:00:00 AM
The newly merged and historically decentralized ChevronTexaco Corp. of San Francisco is seeing results of running all its spend data through a common repository from eBreviate of Walnut Creek, Calif.
Helmut Porkert, chief procurement officer, says ChevronTexaco set three sourcing goals following the 2001 merger that created the current $100 billion company: strategic sourcing to leverage volumes, supplier management and rationalization, and procurement technology deployment and development. To date, the technology piece is helping drive the other two. For example, the company's six refineries require turnaround maintenance every year or two, which involves a large amount of contract maintenance help. Before the spend was so visible online, the number of maintenance suppliers was less of a priority than making sure there were enough workers to cover the job.
"We spend close to $100 million a year on this, so it is a big spend," Porkert says. "In the past, we had bought services from 22 maintenance companies. But after going through this sourcing process and comparing our data online, we have reduced it down to two suppliers with a double-digit percent savings. The savings were achieved in such a way that the maintenance people that work in the plants still get the same wages, so they are not losing anything." Porkert also says that compiling spend data online has made it easier to monitor the mix of ChevronTexaco's suppliers and improve its supplier diversity efforts and spend.
Porkert is concerned with both the amount and quality of the data being compiled in the new system and when it is brought in. Right now, the spend data is brought into the system only after an order has been placed. He wants to get it earlier.
"I want to have the data when we place the order," Porkert says. "So when someone places an order from a catalog, the data will go into the system immediately before the order goes out to ensure we're getting the best price for the volumes we're buying. We are now building pilots for our e-procurement system in our business units and hope to roll the system out worldwide by the end of next year."
The effects of the new centralized data system on the supply base are positive. But Porkert wants to ensure the efforts to improve supply base performance so it is monitored, measured, and maximized. To do that, specific metrics not only evaluate the progress of the effort, but set goals in areas such as excellence, safety, streamtime, and cost reductions.
"We have established metrics in procurement and are collecting data, showing it regularly to the business units and letting them sign off," says Porkert. "We try to be as clear as possible with the metrics. Identify a goal, where we are now, where we want to be in one year, and in three years, all of which is facilitated by having the data online because now we can increase the number of metrics we can use at one time. If we committed to more than three of these numbers before, we would be overloaded. Now we can get more detail in a minimal amount of time. We could have done the same thing a few years ago, but would have needed a significant number of people working on that exclusively."
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