2017 Global SRM Research Report - Solving the value Puzzle

SRM INSPIRES AT CALTEX INNOVATION

CASE STUDY CALTEX

Caltex is on a journey to become more efficient and able to adapt to changing market conditions. It is using SRM to deliver value from untapped areas traditional procurement techniques cannot access.

ambitious targets. Procurement has long been focused on delivering cost savings as part of its contribution to these targets. However, it has proved difficult to maintain high saving levels year on year. So, in 2015, we started looking for new ways to deliver sustained value and decided to partner with our very best suppliers,” she says. “Our objective was to strengthen our relationship with them, be more transparent about our vision, our objectives, our plans and demonstrate how we can work together to unlock more value.”

Baker Hughes, GE’s industrial services company, already had what most suppliers want: a contract, in this case with Australian fuel and service station company Caltex. But Caltex wanted to give something extra. In May 2017, Baker Hughes received Caltex’s ‘Trailblaze Award’, which recognises supplier innovation, for an initiative with Caltex’s team at the Lytton refinery, near Brisbane, to improve the plant processes and output. The supplier contributed to real business improvement. But it was not the only supplier the Caltex leadership team recognised at the special ceremony during the Caltex Supplier Forum in Sydney. The food processing company Parmalat took home the ‘Serve Award’ for the highly successful Caltex- exclusive launch of Frozen Oak, a chocolate milk drink. Energy services firmWood Group accepted the ‘Win Award’ for establishing and growing a partnership arrangement with Caltex, also at the Lytton refinery. The awards were part of more than two years’ work to improve value in the relationships between Caltex and relevant suppliers, says Chief Procurement Officer Johanne Rossi. “At Caltex, we’re on a journey to become more efficient and able to adapt to changing market conditions. We’ve always had very

BECOMING THE CUSTOMER OF CHOICE FOR SUPPLIERS

Caltex’s procurement vision is to become the customer of choice of its suppliers. Although suppliers have other valued customers in a worldwide market place, the Australian firm competes for suppliers’ focus with a two- pronged strategy, Rossi says. Firstly, it is becoming easier and more convenient to do business with. Caltex has committed to reducing administrative tasks and simplifying its operational processes. For example, it is making procurement processes more efficient, stripping out tasks that do not add value for both parties.

Our objective was to strengthen our relationship with suppliers, be more transparent about our vision, our objectives, our plans and demonstrate how we can work together to unlock more value.” Johanne Rossi Caltex Chief Procurement Officer

CASE STUDY STATE OF FLUX 2017 GLOBAL SRMRESEARCHREPORT