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Modernizing the supply chain: How bp is working differently to 'Reimagine Energy'

When business procurement catches up to the convenience of how we buy things at home, it has positive impacts across the organization.

The last decade has seen a seismic shift in the way work gets done, with an exponential acceleration over the last year. Digital innovations have emerged across nearly every sector. For those tasked with extreme challenges, such as delivering hundreds of different items to remote locations in the middle of the Gulf of Mexico, digital solutions are making life easier.

There’s been plenty of attention in the media on bp’s recent announcement that it is aiming to be a net zero company by 2050 or sooner and help the world get there too. It’s a monumental task, and in order to achieve it, the organization is evolving. It is pursuing more efficient production, building new partnerships to better align with its values, and innovating every day to continue to drive down emissions.

Allocating resources for better outcomes

bp is one of the largest energy companies in the world. For large companies like this, procurement can be complex. Making processes more efficient and reliable can have a huge impact and create major value.

bp’s enterprise procurement needs fall roughly into two categories: highly-engineered equipment, which can take months to source, and more common consumable items—items it needs quickly and at scale. Both categories once required bp’s procurement team to negotiate supplier contracts and individual purchase orders. Regardless of whether it was an advanced piece of machinery or a simple pair of safety glasses, there was a contract or a PO for it. The same people using highly specialized engineering knowledge to procure industrial drilling equipment might also be tasked with buying AA batteries or a pair of gloves.

This consumed employees’ time and directed valuable human resources to tasks that shouldn’t require them. “We need to focus on the larger strategic items and put our resources and brainpower towards getting the best outcomes on those. But we also need these smaller things—things that are smaller from a dollar value, perhaps, but not from an importance perspective,” explains Justin Burnett, Vice President of Materials Management and Warehousing at bp.

bp teamed up with Amazon Business to consolidate many individual procurement contracts into one partnership. Now, instead of spending weeks working out a single contract for common commodities with an exclusive supplier, it has reduced its reliance on contracted suppliers and gained efficiency by purchasing on Amazon Business, where there are hundreds of thousands of suppliers in a single location. Employees can buy what they need in an environment most of them are already familiar with from their personal lives, and the procurement team gets more time to focus on sourcing essential products for advanced operations. They’ve seen notable time and cost savings on the back end, too, reducing the number of invoices that have to be processed from 500 a month to less than 10.

“Reimagining energy requires us to work differently. Being efficient in our production and operations is critical to advancing our net zero ambition, and we can’t do it alone. Partnering with Amazon Business makes a lot of sense because they are leaders when it comes to getting the right item on time at the most competitive price,” says Burnett.

Meanwhile, in the cloud, machine learning is paying attention to all of this. Data analysis powered by Amazon QuickSight, an Amazon Web Services technology, is automatically tracking purchases, analyzing spending and trends, and offering insights on user-friendly dashboards. As more data accumulates, repetitive purchasing can be automated, optimizing costs and processes, and driving efficiencies across the business.

“It’s exciting to think about where these technologies might take us,” Burnett says. “I can see a day when AI might tell us what we need before we need it, drastically cutting down the time we spend on planning and scheduling.”

Through digitalization, and by partnering with like-minded providers, bp is driving down costs, operating with greater efficiency, increasing employee satisfaction, and having a tangible impact.

This story was produced by WIRED Brand Lab for Amazon Business.

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