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The energy sector is going through a period of unprecedented change. There is widespread motivation, shared by the majority of the international community, to act now to address global warming. This involves a shift towards renewable energy generation, reducing demand for fossil fuels and technological advances that lead to a gradual slowdown in energy consumption. Consumer behavior is changing as awareness of the impact of energy consumption increases. 

In the utilities sector, urbanisation, demographic growth and climate change have led to the need for significant investment from the private sector to modernise aging infrastructure and guarantee high quality service.

Challenges

Given the challenges facing this capital intensive, dynamic and globalised sector, with ever more limited access to resources, the major international energy companies must plan how to transform their businesses, whether this is through innovation, new business models or diversification while at the same time improving operation efficiency. 

In the B2C sector, investment control and operational excellence are key. In addition to this, the digital revolution provides the opportunity to update business models and improve operational productivity.

How we can help

Argon & Co helps its energy and utilities clients improve their operational performance, working on both the upstream (access to resources, exploration-production) and the downstream (transformation, distribution, marketing, services) value chain:

  • Cost reduction: optimisation of direct and indirect purchasing costs, cost variability, design to cost of industrial investments, optimisation of shared services and administrative functions
  • Availability improvement of facilities and equipment: asset management, maintenance process optimisation, optimisation of maintenance parts inventory to guarantee availability, mobile equipment fleet optimisation
  • Optimisation of cash: tactical planning and S&OP, implementation of inventory policies adapted to sector specificities
  • Optimisation of customer processes: pricing, contract lifecycle, billing, cash flow improvement, customer relationship and service, multichannel and digital development
  • Operational efficiency: forecasting, resource load/capacity steering, organisational optimisation (roles and responsibilities, staffing), performance steering, optimisation of mobile teams (field services), shared services
  • Change and transformation management

Energy and utilities case studies

Value creation design

environmental utilities

Value creation design

With a turnover of 17.3 billion euros and 89,000 employees, the Suez Group is a world leader in the environmental market (water and waste).

Treatment Infrastructures (Suez TI) is one of the group’s business lines. It covers the engineering, design and construction of water treatment plants.

In order to propose competitive offers, Suez TI wished to make savings on a dozen identified “products” and to anchor the Design to Value culture in the company.

Our role

  • To improve competitiveness of the products studied by 15 to 30%, depending on their maturity
  • Deploy a proven approach, based on cross-functional team brainstorms, to challenge practices and identify new, more economical design ideas
  • Accelerate decision making on the implementation of identified opportunities
  • Perpetuate the approach through the writing of a DTV methodological guide Suez TI and training/ coaching of the teams

Results

  • Five products studied incorporating four wastewater treatment plants and a reverse osmosis plant
  • 90 interviews conducted with all key players in France, Spain and Middle East in three languages
  • 18 brainstorming sessions resulting in 600 collected ideas >50 pre-selected opportunities in five months
  • An average of 25% savings identified on each product
  • Five Suez TI staff trained to be self-sufficient to continue deployment of methodology

Supply chain stabilisation

global plumbing manufacturer

Supply chain stabilisation

Reliance Worldwide Corporation is global water technology business. Its activities include the design, manufacture and distribution of branded water flow and control products, and solutions for the plumbing industry.

RWC Asia Pacific needed to stabilise operational performance post a poor SAP implementation and to set supply chain foundations in place to launch a S&OP process in line with global standards.

Our role

  • Provide interim supply chain leadership and management
  • Address current service performance issues through crisis remediation and service stabilisation activities
  • Assess the effectiveness of the current supply chain process model vs best practice and work with the team to understand process, people and system capability gaps and needs
  • Drive process and systems change through the global support group

Results

  • Addressed current service performance issues through crisis remediation and service stabilization activities, reducing back orders by 75%
  • Assessed the effectiveness of the current supply chain process model vs best practice, identifying team, process and ERP template improvements
  • Delivered a new supply chain operating model and team to enable more reliable and responsive business performance
  • Launched a new introductory S&OP Process

Make or buy strategy

industrial and chemical

Make or buy strategy

Gaz Réseau Distribution France (GRDF) is a French gas provider. It is the largest natural gas provider in France and Europe. It is a subsidiary owned by Engie, with more than 10,000 employees and a turnover of €3.5m

The development of its biomethane activities led GRDF to rethink its make or buy strategy regards to all the activities linked with the biomethane injection unit, eg. the conception, manufacturing, exploitation and maintenance of a unit.

Our role

  • To map all the detailed activities linked with biomethane injection through a series of interviews
  • Define the company’s strategic interests and analyse each activity against it
  • Evaluate the internal competition for each activity by analysing the market competitiveness against GRDFs via an RFI
  • Validate make or buy scenarios and calculate the associated savings

Results

  • A mapping of 70 activities analysed against nine strategic interests and four competitive criteria
  • Analysed the markets competitiveness based on 15 suppliers’ answers
  • Delivered a presentation of three major make or buy scenarios, and a risk analysis for each one
  • Created two roadmaps, an €8.5m return on investment estimated at the end of 2023 for exploitation/maintenance activities, and savings of 20% on the NRC for conception activities

Design to value approach

energy distribution

Design to value approach

The client is a global leader in energy, specialised in designing, developing, operating and maintaining heating and cooling systems for buildings.

Due to high price competition of autonomous solutions and strong constraints on public image, the client launched a Design to Value project on substations and networks to reduce total cost of ownership and lead time.

Our role

  • Bring expertise, know-how and methodological support to implement the Design to Value approach
  • Define project baseline: cost model, functional analysis, joint team onboarding
  • Prepare and facilitate brainstorming workshops to identify top priorities opportunities and benchmarks
  • Develop project plans for key opportunities and overall roadmap to be validated in the Steering Committee

Results

  • Total cost of ownership reduction of 15% of the whole system
  • Reduction of network creation lead time by 25%
  • Service offering refinement according to new client segmentation
  • Change management dynamics with more than 40 persons
  • Methodological Design To Value handbook build-up and training of the team in a “training by doing” logic

RFP for planning and optimisation system

utilities

RFP for planning and optimisation system

Drax is the largest power station in the UK and generates seven to eight percent of the UK’s electricity.

Drax wanted to put advanced planning processes and systems in place to optimise their planning processes. A Request for Information (RFI) carried out had created a shortlist of suppliers.

Our role

  • Provide an independent and impartial evaluation of the suppliers, including reference visits where relevant
  • Ensure suppliers have a detailed understanding of the requirements to develop feasible project plans and fixed price responses
  • Develop a prioritised list of detailed requirements for the RFP that focused on benefits

Results

  • Selected a supplier that met all functionality requirements within timelines, maximising first year benefits
  • Competitive fixed price bids due to suppliers’ view of reduced project risk
  • Over 10% improvement on initial offer through focused negotiations
  • Deferred licencing and support costs, which made up 68% of the year 1 costs until after go-live