APTIM Revamps Their Way to Better Procurement
People. Process. Tools. Sometimes referred to as the golden triangle, it's an old concept that optimises the relationships between people, processes and the tools required to get the job done. APTIM is using this age-old strategy to propel its supply chain and procurement transformation journey.
By ensuring the right people, with the right mindsets are given the right tools, APTIM is working to fix what's broken, and leveraging technology to optimise where it makes sense, and getting to better procurement in the process.
Punit Shah, VP of supply chain and procurement officer at APTIM, walks us through.
Digital Transformation; Setting the Pace and Challenging Mindsets
"Private equity ownership has a very unique and a much faster-paced ask and requirement as compared to a traditional oil and gas firm whose structure and identity had a few iterations in recent times, owing to changes in ownership. In terms of establishing a base to grow from, the two backgrounds present quite a stark contrast.
"It took a lot for the company to bring those two together, but right now, our approach is to bite off as much as we can chew. We want to take small steps but make sure that they are: a) consistent with the strategy, b) they're relevant to the business in size, scale and scope and c) we can continue to build on that. We don't want to do something we have to backtrack from or restart because we didn't think of something further downstream. And so it's a very cautious and slow but deliberate approach.
"We started by ensuring we had the right people with the relevant backgrounds and skillsets to execute in the areas that are our responsibility. In order to do that, we needed to define what that breadth and depth of the supply chain realm and scope would be. Once we got there and got the right people in the right structure, the next step was going through documenting our processes and making sure that we were rigorous about it. This ensured everybody was working off of the same framework. Then we looked at bringing in tools where it would increase efficiencies by making it easier for people to execute on those processes."
Redesigning better ways of doing things requires a diverse group of people, a wealth of experience, and most importantly, it requires flexible mindsets. "One really unique thing about APTIM is that we are very diverse in the sense that we are both diverse in the industries we serve and in multiple geographies. I've been in larger companies that don't have as wide a breadth of scope as APTIM does. We are in a lot of different areas, and so management, in general, is very accommodating and are very in tune with diversity and inclusion. They're very encouraging and employee-focused because, at the end of the day, our product is our service, and so the company really does value their people," says Shah.
He continues, "That flexibility supports people to be able to perform and stay focused on work and their function more than the traditional thought processes, where it was believed you have to have an office and a set work schedule. Having flexibility around all of those things has made us a lot more successful."
"This industry has been traditionally very resistant to change. It's in our DNA. They're known to be entrenched in the way that they've done work. One of the things I found is working well is that we're trying to foster the thought process with our teams that your experiences are great and they make you what you are, and we value what you've learned, but you need to understand that not only are you allowed to, but you're expected to take those learnings and translate them into something that's more relatable to this business.
"Experience is fantastic, but its true value lies in being able to scale it and applying it to your circumstances. I want you to use your experience and knowledge to assess our situation and then tell me what's relevant and how we can make this business better. I think that's what really sets our supply chain team apart."
"Personally, I think a healthy company needs to be looking at growing and promoting talented employees. These days, people have multiple options, and a company owes it to an employee to support their growth and inversely, as they grow, the company does too. We are also one of the industries that are experiencing a talent gap and are very much exposed to the ageing workforce phenomenon. And so, one of the first things that I established when I came in was an effective mentorship and succession plan, as it relates to a career ladder and a path that ensures room for growth and career advancement. It's a mutually beneficial event and one that is strategically important to us."
Process: Revamping Policies and Procedures
Shah then looked at reviewing, refining and tweaking procedures and policies, ensuring all functions are designed to best support the varied industries APTIM services.
As Shah tells it, "In an ideal world, I would have liked the change management approach to be top-down, bottom-up. You want to approach it from both sides if you really want long term change to take effect. We've gone through significant gyrations at our top level, and there's been a lot of changes in leadership. So we're still waiting for the long term vision to settle down. But in the meantime, the business can't stop or wait. So, for now, our approach is to work from the bottom-up.”
"Our strategy is to take a look at what processes we have or need to have in place in order to execute our function and what portions of that present an opportunity for automation or enhancement to where we can take that piece and make it a little bit better and then build on it.”
"When we are efficient and put in proper checks and balances in place and set control mechanisms and standardisation, of processes, this allows us to reduce waste and execute more effectively on our work for our clients."
"As a significant portion of what we do is project-based and often works on a cost-plus structure, our improved efficiencies get passed on to our clients. In the last 12 months, we've seen multiple instances where we improved what we were doing, and we showed it to the client, and in the end, it brought more business because we were able to show that we're not here just to bill you and leave, we are here to partner with you, we're invested in your business."
Tools: Leveraging Tech with a Common Sense Approach
"We're now using Microsoft's existing ecosystem of tools to manage more of our workflows. Microsoft is one of the bigger, leading-edge companies when it comes to innovation, and they’ve seen over the years the focus on supply chain and ERP systems, and they’ve really made significant strides and putting in investments and growing that out,” says Shah.
“We’re really just at the beginning of our relationship. We’ve picked up a few projects that are small in scale but very critical to our work process, like automating the requisitioning process. If we can do it from a tool that exists with consistency, which has a stable platform, we won’t need to integrate other systems, which is a huge win. So that presents a very attractive option, and we’re very actively exploring that.
“It amazes me that a company the size of Microsoft gives us the preference and the treatment that they do. The relationship is mutually beneficial. They’ve been willing to listen to our issues, and they’re willing to invest in where we are as a company. They’re investing time and effort in understanding what our priorities are. And they’re not forcing solutions onto us. They’re allowing us to take the lead and supporting us in our path forward, and I have a lot of respect for that.”
Intelliwave Technologies provides new solutions to the construction industry to help increase “Time on Tools” for craft labour and improve site safety and have been an integral partner in APTIM’s success in finding better ways of doing things.
Shah expands, “As we were previously almost a hundred per cent manual when it comes to material management, Intelliwave Technologies is really bringing in a whole different dimension into the way we execute jobs. They bring a very niche and specific offering and have developed a tool specifically for material management, everything from managing your inventory and warehousing to receiving and allocating material to your job site, which on a construction site, depending on your scope of construction, can be extremely complex. We can have thousands or even millions of parts, and all of this ultimately is dollars. So if you're not watching it, you could risk losing it.”
"Ballooning inventory erodes margins, so we took it another step further and looked at how we could improve the planning on our jobs—for instance, leveraging smart technology for better inventory management. We can now see how much material we have and where. We can plan ahead and see if we have an upcoming shortage, and then we can take actions to prevent that shortage. We can also report and track where there is product damage, which allows us to then go back to a vendor and recover some of those costs.
"We've also taken the approach of developing work processes with Intelliwave and bringing them in to understand our business and have them give us suggestions and provide their expert view on what can and cannot be done. Intelliwave Technologies have been with us at multiple job sites, and they've been alongside us through all of our challenges, and they've earned our trust along the way. We share values, and we have a shared vision of where we want to get to. So it's a really healthy relationship based on a mutual understanding."
Indirect Procurement Savings
Shah tells us how APTIM has managed to take control over indirect spend and capture cost savings.
"Indirect in the traditional sense is indirect spend that's not going into your end product. Well, our end product is our project. And so indirect for us really is more of our corporate and overhead and it includes everything from your travel to your office buys, your benefits providers, insurance companies and so on. In the APTIM world, in broad terms, Supply Chain has the responsibility for managing the outward dollars as they're being spent, but we share a responsibility with multiple functions to define what that is and who you want to spend it with.
"We don't want to dictate things, but we want to look at how we can make more strategic decisions. So we work with the functional group to determine the appropriate vendor base, and then we help manage the spend. In general, the approach has been to better define some of these categories and apply some supply chain disciplines to them, such as going through a rigorous RFP and taking a category management approach and applying the seven steps strategic sourcing process. We were typically very focused on and used to operating within that Gulf coast Baton Rouge area, so the value was in getting players to the table that were outside our usual geography.
"Prior to the transformation, everything was done in pockets with no aggregate view on spend. We've now established programs and have signed some contracts with key companies. We've also put in structure to protect us from liabilities and risk. And we've locked in pricing. So now we have a very clea reference for capturing savings from where we were to where we are. We've come a long way, and now we can rinse and repeat."