For the past two-and-a-half years, Enbridge has been working on revamping its supply chain by implementing new strategies that will help it achieve its overall vision. “Supply Chain Management [SCM] vision is to acquire goods and services in an ethical manner to satisfy Enbridge demands in alignment with the market environment, while providing competitive advantage,” Director of Supply Chain Management Patrick Etokudo says.
The Alberta, Canada-based company has established itself as a leader in the safe and reliable delivery of energy over the past 65 years in North America. Enbridge operates the world’s longest, most sophisticated crude oil and liquids transportation system with about 15,795 miles of crude pipeline across North America. “We deliver an average of 2.2 million barrels of crude oil and liquids every day, with a 99.999 percent safe delivery record over the past decade while moving nearly 14 billion barrels of crude,” the company says.
Enbridge transports 53 percent of Canadian production bound for the United States, which accounts for 15 percent of the total U.S. crude oil imports. Moving close to 100 separate commodities, including more than 10 types of refined product, the company is the largest single conduit of oil into the United States. “It’s the quality of our strategic planning and the fact that we execute extremely well that have allowed us to deliver on-time and quality work every single time,” Etokudo says.
As the leading pipeline operator in both Canada’s oil sands region and the Bakken formation in Canada and the United States, Enbridge is engaged in the largest capital program in its 65-year history. It is making $44 billion in commercially secured growth investments across its business segments.
“To link growing producing regions to the best markets and to provide refineries in Canada and the United States with reliable North American crude oil, we’re moving ahead with a range of initiatives to provide producers increased transportation capacity of crude oil and in particular for growing supplies of light crude oil,” the company says.
A fully integrated supply chain is vital to the company’s continued success and planned growth, which is why reshaping the supply chain and getting the team focused on one vision was the mission for Etokudo when he came aboard the company in 2012. “We focused around a vision for the supply chain by considering what is it we want to achieve or where we want to get to,” he says. “Behind that vision is a set of strategies and a three-yearly roadmap that will achieve that vision.”
The first step was ensuring the right people were in the right positions. “I inherited a big group of employees and we had to do an assessment of the people who work in the SCM to identify the skills and competencies that we had,” Etokudo explains. “Part of the assessment was identifying people that rightfully belonged in other roles.”
During the assessment process, some employees were moved into new positions that were more suitable for their skills and Etokudo says he believes that having a talent pipeline to fill critical positions was crucial. “I’m working on getting young people interested in supply chain roles and encouraging them to stay with it,” he says. “We’ve created, and will look to create more, student positions for them to work at the company and drive that interest for them.”
To make sure Enbridge is on the right path to attain its vision, fully integrating all of its business units’ supply chains is necessary. Etokudo has implemented a 13-person category management team in the Major Projects Business Unit that oversees strategic sourcing and supplier relationships. “I think that by itself has been a big change for the supply chain,” he adds. “We have ideas generated through category management being utilized during planning sessions and our vice presidents sit at the table when decisions are being made.”
In 2013, an enterprise supply chain council was created that is composed of senior SCM leaders from each of Enbridge’s business units. The council operates as a self-governing group that shares best practices to implement initiatives company-wide and agrees to work together to overcome any challenges.
A benefit to having a fully integrated supply chain and a major goal for Etokudo is to be able to transfer staff between supply chain groups without any learning curves necessary. To achieve this means every supply chain employee needs to follow the same standards. “Getting people at the same level is going to be how we manage our supply chain across the board,” he adds.
Enbridge selects its suppliers in a traditional two-step approach by pre-qualifying applicants and ultimately selecting them through a proposal process. The suppliers invited to the process are not always the same companies because, as Etokudo says, that could breed complacency and lead to risks in the business. “If you always rely on the same suppliers without revalidation you could lose sight of what’s happening in the marketplace and be taken for a ride,” he notes.
One of Enbridge’s core values is integrity and Etokudo says the supply chain is the poster child by which it can be measured within the company. Enbridge now looks for that same level of integrity from its suppliers. “We have started a vendor audit program, which is not very popular because vendors are used to doing business without that level of scrutiny,” he explains. “We have a strong compliance code at Enbridge and are now checking on our suppliers from time to time.”
To keep positive relationships with its suppliers, Enbridge has hosted four vendor forums over the past two years where the company’s top 100 suppliers are invited for open discussions. “We set targets for ourselves based on the outcomes of those forums and strive to deliver to those targets,” Etokudo says.
Mapping the Future
In November, the SCM leaders reviewed the progress made and refreshed its strategic roadmap accordingly to meet the vision for the new supply chain over the next three years. “What we need to do to achieve that vision is becoming fewer and fewer, but the full integration of the supply chain is still a big deal,” he says. “The supply chain should be the comparative differentiator for Enbridge. According to Dr. Martin Christopher of the Cranfield School of Management, when companies compete, it’s really their supply chains competing.”
Enbridge will continue to develop a fully integrated supply chain across all its divisions and implement the right policies, systems and processes to guarantee that continues into the future. “We need to have shared processes and best practices across the company,” Etokudo says. “We need one view of the supply chain and one view of Enbridge to the supply market.”