EDF Energy: Centralize, enrich, comply, & syndicate

Context

EDF Energy, one of the UK’s largest energy companies and the largest producer of low-carbon electricity, struggled with rationalizing their supplier master, causing redundant efforts and a lack of visibility of their supplier information.

EDF wished to centralize their supplier master, enrich their data, ensure compliance, and syndicate supplier information to the appropriate systems.

Challenges Faced

Lack of data consolidation

According to Greg Brown, EDF’s head of procurement directorate

What we wanted to do was to harmonise the master data where it existed in duplicated form without impacting our internal business…”

“The de-duplication of information within the provider, without having an impact on internal business transactions, was probably the biggest challenge’’. “We invested a lot of time getting that right. We would find outstanding purchase orders with one supplier but then find that the supplier in question had been closed down in favour of another supplier which was exactly the same thing – but how do you manage that? It has to be right first time or it’s wrong and you’re left with it.”

Lack of supplier oversight

For EDF, it had become critical to be able to monitor supplier compliance. However, to achieve this, there was a need to optimize the master data within SAP to get the requisite supplier oversight.

For Greg Brown, EDF’s head of procurement directorate, being able to get insight into the supplier compliance issues, and the risk issues, were even more important than the financial considerations.

The Solution

Supplier Data Management

By leveraging HICX’s master data management, EDF now have a single source of truth with automated real-time data collection and validation which ensures no duplicate supplier data is entered.

For legacy data, Greg Brown’s advice is “You’ve got to be prepared to invest in cleansing your own data because you can’t outsource that.”

Dedicated supplier portal

Historically, I’m very aware we were sending out things like health and safety questionnaires with each business unit asking for the same stuff but in a slightly different way. This was obviously adding massively to the burden within the supplier organisations,”

Now, with HICX supplier portal, EDF suppliers can upload appropriate insurance documents or health and safety certificates such as OHSAS 18001 and then these will be visible across the group. This is simpler than email or written questionnaires, and allows the company to immediately analyse responses according to whatever other metadata is stored about the suppliers – category, spend, risk, or anything else.

Risk Categorization

With HICX, EDF were able to develop a category risk matrix which automatically calculated risk of each supplier which was then used as part of the qualification process.

EDF has over 1,600 product service categories which carry risk in relation to areas such as human rights, the environment and anti-corruption. The categories of risk depended on the particular supplier and the environment into which the goods are delivered. All of this is now automated for EDF and calculated in real-time during the onboarding process to determine which actions and authorisations are required.

Benefits

EDF Energy is using the system as a way of engaging with suppliers electronically about any particular initiative that it’s considering. The system delivers substantial time savings and has helped foster collaboration and synergies between EDF and their suppliers by providing a common basis for discussion.

A spin off benefit identified by Greg Brown was

The opportunities that come from the consolidation and enhancement of data can have a healthy impact.”

With HICX real-time validation, through third-party data punch-outs, the accuracy of the data maintained.

HICX’s supplier risk management platform ensures that risk is determined and calculated for every supplier, enabling EDF to anticipate business impact and make informed decisions in real time.