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Chevron Drives Transformation Through Procurement

Amazon Business helps the energy giant meet its supply needs and its supplier diversity goals.

Among the largest energy companies in the world, Chevron’s operations span the globe. “We’re involved in virtually every facet of the energy industry. We explore for, produce, and transport crude oil and natural gas. We refine, market, and distribute transportation fuels and lubricants, manufacture and sell petrochemicals, and even generate power and produce geothermal energy,” says Natalia Vornic, global category manager, Maintenance, Repair & Operations (MRO) at Chevron.

 

Not surprisingly, that reach creates incredibly diverse needs in purchasing, she notes.

 

“To run our business, we procure a wide variety of goods and services, from fabrication services and equipment to consumables such as maintenance and repair products, office supplies, lab equipment, and janitorial supplies,” Vornic says.

 

The challenges in procurement aren’t simply a matter of the range of products required across the company or even the incredible scale at which those supplies can be required. Chevron also works with significant logistical challenges around delivery. The needs from various locations must be considered, including gas stations with little storage capacity requiring effective just-in-time delivery to remote locations like the Permian Basin, a vast stretch of land spanning over 2 million acres so remote that many delivery sites lack physical addresses.

 

To meet the organization’s procurement goals, Chevron has invested in digital technologies to help employees across the company rethink purchasing in a modern, holistic way. In 2018, the company began working with Amazon Business—helping bring the tools of digital transformation to purchasing, including agility and transparency, with effective spend-management controls to lower costs and reduce waste.

 

Empowering employees with better buying solutions

 

Chevron has a culture of empowering its employees to make purchasing decisions that work best for them and the needs of the stakeholders in their business units. But despite the company’s size and complexity, Vornic says stakeholders in procurement at Chevron have similar interests. “They want consistent deliveries, competitive options, and user-friendly procurement processes that help people make better and faster purchasing decisions,” she says.

 

“Amazon Business has state-of-the-art analytics, real-time sourcing capabilities, and user-friendly tools focusing on customer satisfaction and innovation,” she says. “This business relationship has increased the efficiencies in our organization by empowering users to buy the things they need quickly and easily.”

 

The ability to manage and curate reorder lists, for example, has allowed managers across Chevron’s 300 company-owned gas stations to shave significant amounts of time from the purchasing process, says Nicole Cannon, operations lead at Chevron. “We’ve been able to procure the items we need and put them on a reorder list. It also provides us with competitive pricing,” she says. “Store managers can go on Amazon Business, click through everything they need, and add them to the cart. It’s a five-minute process.”

 

Meanwhile, flexible, predictable shipping options available with Business Prime help employees get the supplies they need, when they need them, without having to worry about extra storage on site, something many locations don’t have.

 

Reliable, fast shipping has also revolutionized procurement operations in the Permian Basin, where there’s no shortage of space but very little delivery infrastructure. Shipments of supplies were something that had to be planned and approved weeks in advance. Today, says Kevin Jackson, logistics manager, Mid-Continent Business Unit at Chevron, those same shipments take only a few days and are aided by the same ability to curate lists on the front end, helping steer employees toward products they know will be approved. “It enables our employees to quickly choose from a variety of things they want, but are still within company guidelines,” he says.

"This business relationship has increased the efficiencies in our organization by empowering users to buy the things they need quickly and easily."

— Natalia Vornic, Global Category Manager, MRO Procurement Optimization, Chevron

The capabilities of Amazon Business go beyond operations. “We see a pretty significant cost advantage on most products,” Jackson says, “but the biggest thing is the morale boost for the workforce, because they’re empowered to get the things they need faster, with less red tape, and with fewer procedures.”

 

Meeting sourcing needs while advancing strategic priorities

 

“Large enterprises like Chevron need flexible, agile solutions that can address a complex set of sourcing and fulfillment demands while streamlining access and visibility,” notes Chris Costello, executive vice president at Amazon Business. “Chevron can maintain supply continuity across various types of locations by purchasing on Amazon Business, while gaining important insights around purchasing trends and cost savings.”

 

Moreover, Amazon Business helps companies use procurement to reflect the values important to them. “We’re inspired by Chevron’s commitment to supplier diversity. We look forward to working with Chevron as they advance their supplier diversity programs, and further invest in the communities they serve,” Costello says.

 

Chevron’s Vornic agrees. Chevron has opened itself up to a wider range of sellers that meet small and diverse certifications. “We’ve seen significant growth in spending with diverse sellers and small businesses at Chevron,” she says. “Amazon Business makes it easier for employees to buy from diverse suppliers and small businesses, because we can guide them to sellers with these certifications. We are pleased to see this progress and look forward to continued success.”

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