Cover Story: Come Together

Energy giant Exelon is just one year into a 36-month initiative to consolidate its supply organization and drive new supply chain efficiencies, but already the savings are adding up


With Exelon's Supply Chain Transformation Initiative moving into its second year, the project has already achieved significant results, with total savings accrued to date expected to hit the goal of $120 million this year. Exelon has also been consolidating its supply base. For example, recently the supply chain organization worked with the Exelon Energy Delivery Project and Contract Management business unit to winnow its list of preferred construction contractors down to five from 15, and to cut its engineers-of-choice down to three from nine. This effort alone is expected to result in $9.5 million in savings annually, with the possibility of achieving more than $10 million in additional cost reductions due to process improvements.

Perhaps most importantly, Reidy says, the transformation has created a strategic partnership between the business units and the supply organization. That relationship will be critical as Exelon continues its drive to eliminate supply chain costs and to deal with the evolving nature of the utilities business. "The initiative lasts three years, and it is a big change, but we need to continue to change," says Reidy of the company's supply chain organization. "Maybe three years from now the way that we're structured now won't be right. The supply organization needs to continually look at itself, look at what it does and look at what it does for the business units all the time." As Adams sums it up, "You can't stop."

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