How to improve your SCM process with automation and analytics

Large O&G organization has a very inefficient contract management process that lead to decline in contract compliance and hence loss of millions of dollars in inaccurate procurement and key personnel doing repetitive tasks.

The Challenges

A large O&G organization required people with Supply Chain and data experience as well as experience working with multiple global vendors to help generate and maintain existing contracts in SAP systems. This organization also had challenges regarding contract compliance due to procurement done outside of negotiated contracts.

There was an existing process to manage contracts, but the process was inefficient. Many repetitive tasks had to be done on a daily basis. Management felt that neither the process nor data were reliable. It was also identified that many items were still procured through limit POs where there was no line item detail and therefore, it was difficult to keep track of contract compliance. Some of the effects generated by the identified are:

  • Key contract management personnel spending too much time on repetitive manual tasks on a monthly, weekly and daily basis, not focusing on activities related to reducing spend or making process more efficient.
  • Creating a high risk of having wrong/outdated pricing due to high use of Excel
  • Key SCM stakeholders and management had little trust in the system and data due to constant issues found with data discrepancies. This caused users to “go rogue” and work outside the system.
  • Enroute’s Solutions

    The goal of the project was to bring in a team that could not only adhere to current procedures, but make recommendations in order to make the contract management process more efficient. Another goal was to increase contract compliance by providing helpful insights to contract managers in order to make any required decisions and/or process changes.

    A team of data analysts worked side by side with category managers (global and regional) and did activities such as:

  • Perform an analysis of all Vendor and Contract data to identify data gaps and define actions based on identified opportunities.
  • Maintain and update any contracts according to their review dates. (Including daily updates for chemical price books).
  • Generated a tool that identified potential similarities between free text items and items within contracts based on the vendor being used.
  • Created reports that enabled contract and category managers to help reduce costs, improve efficiency and enforce procurement through proper contracts.