Transformational Supply Management Yields Critical Funds

Water companies have the ability to gain revenue from strategically sourcing products and services.

This is essentially what’s happening with ‘supply management’ in public water and wastewater utilities. The functions are there, but underdeveloped. Some utilities might challenge this assertion but it’s difficult to find articles or case studies that provide evidence of related achievements.

Public utilities’ procurement groups are good at applying traditional processes. When bidding or buying they follow all the steps to select the lowest bidder. This may seem a contradiction, but with finances constrained, is this the most efficient and effective way to spend a utility’s funds? Effective revenue management requires effective spending management. Low bid doesn’t assure value. Low bid isn’t strategic. At a time when operations and maintenance (O&M) personnel and the capital budget account for an estimated 85 percent of a typical water system’s expenses (according to the U.S. EPA’s Office of Water), traditional buying methods aren’t the right tool for water managers.

SOURCE: https://waterfm.com/applying-transformational-supply-management-yields-critical-funds-utility/

Taxonomy

• Resource Management
• Financing
• Enterprise Resource Planning