January 10, 2019

EDF Energy Case Study / Webinar: How to Mitigate Against Risk and Remain Compliant

Risk management and compliance at EDF Energy

EDF Energy Case Study / Webinar: How to Mitigate Against Risk and Remain Compliant

In this webinar Greg Brown, Head of Supply Chain Governance & Performance at EDF Energy, provided a rare insight into how the energy giant manages risk and compliance over its supplier base.

This was followed by an introduction to HICX and an overview of what we learned during the project with EDF Energy, presented by our CEO, Costas Xyloyiannis. You can watch the informative webinar to your heart’s content below.

Greg Brown: “At times it can feel like we’re five separate businesses with five different sets of compliance requirements. We’re facing an increasingly-complex compliance landscape. It seems like new regulations or initiatives are being introduced every few months that we need to respond to.”

“From a supply chain perspective we’re supported by about 5,000 suppliers, with a churn of about five percent per year. We’ve got a single ERP; we use SAP, and have been on a journey over the last decade or so, migrating each of the different business areas onto a common platform, which gives us some advantages and improves the ease with which we can assimilate and analyse our data.”

“We use a variety of asset management systems to manage the different plant systems, and some of the peculiarities of the integration have a bearing in terms of some of the ways we need to configure our other IT assets.”

“One of those assets – we’ve got a single supplier information and management portal, HICX. We implemented HICX back in 2014 and use the supplier information management portal to support our supplier onboarding process across all of our business units, to enable continuous monitoring of the compliance of our supplier base.”

Overall framework for managing supplier risk

“We’ve got our six better energy ambitions, which set out EDF Energy’s short and long-term objectives for improving our social, economic and environmental performance. By meeting these we expect to deliver on our ‘better’ plan, which is to create better lives, better experiences and better energy and to do so in a sustainable and responsible way.”

“And below these, as a business and from a supply chain perspective, we need to manage a variety of risks to deliver against these objectives. The size and relative importance of these risks changes on the nature of the unit being supplied or the nature of the activity being performed.”

“As an example of that, the profile of health and safety risk will change enormously when considering people working within our call centres, for our customers’ businesses, or some of our contractors potentially working to maintain plants at some of our power stations.”

“Similarly, the risk associated with a breach of Payment Card Industry Data Security Standards (PCI DSS) is only really a risk to our customers’ businesses. The underlying IT infrastructure through which we process credit card transactions.”

Supplier Relationship Management (SRM) framework

“We recognise as an organisation that our approach, and the extent to which we give consideration to some of the items identified within the grey box below the risks, needs to be tailored to meet the needs and risk appetite of our individual business units.”

EDF Energy supplier risk

“So how do we do that? The boxes in blue at the bottom – effective governance, processes which consider and are proportionate to the risk and value of individual activities, suitably qualified and experienced people and increasingly with integrated processes enabled through technology. And then the last point is just to reflect that we manage these risks throughout the supplier lifecycle from initial registration and onboarding through to final closure of individual contracts.”

“I’m going to talk a little bit more about how we implement that in practice. From a strategy perspective, we need to work out which risks we’re going to manage and how we direct our finite resources to manage them.”

“We do this through a supplier relationship management (SRM) framework, through which we segment our suppliers to understand their importance to us from a risk perspective, and this then goes on to inform our supplier relationship management approach with our key strategic suppliers.”

“We’ve got a view of the supplier segmentation for EDF Energy overall, but also within our HICX portal we maintain segmentation that’s specific to each of our business areas, which enables a bit of a hybrid approach to supplier relationship management. So each of the business areas can maintain their own framework in parallel to the overall business approach.”

Giving control to the customer

Costas Xyloyiannis: “It’s not one-size-fits-all – especially when you’re trying to centralise something which has many variables, many differences by business unit, by what you’re spending, [etc] – so once you move away from typical transactional processes like procure-to-pay (P2P), you realise that it’s very non-standardised when you go across industries.”

“The way we were able to be very successful here was by taking the idea of Lego blocks. Yes, there are things out of the box which you can use, but customers are able to change things, to adapt things, to evolve things throughout that journey. Here we’re talking about business-driven considerations. It’s something which customers can go in and adapt and change over time.”

The above excerpts are just a fraction of what was discussed during the webinar by Greg and Costas, so make sure you watch the whole thing now in order to benefit from these expert insights.

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