ergon energy - Local Buy

Ergon Energy
FLEET STANDARDISATION
LOCAL BUY - Government Procurement Conference
LOCAL BUY - Government Procurement Conference
March 2011

ERGON ENERGY
►Amalgamation of 6 regional electrical boards in
1999.
►Electricity distributor to 97% of Queensland
including Torres Strait and a small portion of Northern
NSW
►Core Business
►Construction and Maintenance of electrical
distribution infrastructure (

Challenges
► Safety
► Customer expectation (both external
and internal)
► Distance (Rational/ Remote)
► Communication (including language)
► Legacy (we’ve always done it that
way/ we are different)
► Environment
► Compliance

Fleet Asset
► Approximately 2800 units
► From Mobile Elevating Work Platforms
and Crane Borer Plant to Trailers/ skid
steers/ quads to plus the usual suspects
► Annual replacement program –
approximately 450 units
► Annual CAPEX - approx $30m
Fleet Asset Profile
► Maintenance/ repairs outsourced
(approximately 700 service providers
across the state)
► Annual OPEX - Approx $10m
Light
Commercial
4x2
Light
Light Service
Commercial
Truck 4x4
4x4
Heavy Rigid
Truck
Light Rigid
Truck
Medium Rigid
Truck
Miscellaneous
Passenger
Vehicle
All Terrain
Vehicles
Crane Borer EWP Forklift
Dingo/Trench
ers
VLC
Trailers
Category 136 280 580 170 83 253 26 238 31 77 218 83 23 175 474

Delivering Annual Replacement Program
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Current Practice
Operational needs determined in consultation with Line
Management
Manual form based process
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Resulting in:
Process impediments
Inefficient planning (resource hungry)
process prone to breakdown (slow, not operational priority)
Less than efficient ordering process (inability to bulk order)
Inability to implement effective supplier arrangements (body
builders etc.)
Longer lead time than necessary
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Behaviour
does not challenge the status quo,
prone to personal influence
Maintenance of the old 6 regional board cultures and behaviour
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How is Ergon attempting to manage these challenges
faced, steam line procurement process and affect
culture change

Fleet Standardisation Project
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Objective:
Effective delivery of uniform, fit for purpose products to each role in the business.
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Outcome:
Improve the effectiveness of the business in meeting it’s customers expectations
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Outputs:
Data base detailing the specification of the vehicle/ plant required for each position
On-line approvals system to process vehicle/ plant replacement programs
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Benefits:
One business solution
Corporate Intelligence maintained in integrated corporate database
Improved planning process - quantities and specifications
Certainty in meeting operational requirements
Improve supply arrangements (reduced lead times, consistent build quality, improved supplier relationships)
Streamline acquisition process - reduction in manual effort (more time to focus on core business)
Remove emotional attachment to the vehicle – customisation

How
► Executive approval of the project (received)
► Green Field approach
► Project teams with representation from
each operational region/ division
► Line Management review and sign off on
agreed products
► Build of Standard resource Database
(Completed) - Web access to Database
► Purchase/ Build on-line approval process
(WIP)

Progress to Date
► Development of Standard Resource Database –
integrated with corporate ERP (structure)
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MEWP variants down to 5 (to meet varying roles)
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Light Service Trucks
One (1) Cab Chassis
reduction in the number of body layouts from 15 types
to 5 types
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Light Commercial Vehicles
One (1) Cab Chassis Make
Currently working on body layouts
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Passenger Vehicles
One (1) small, medium, large sedan and
One (1) wagon

Project Challenges and Learning’s
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Challenges
Gaining Executive approval for non core activity
► WOB activity involving all elements of the business -
Managing upward, across and down into the
business
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Resource Allocation (funding, expertise and time)
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Learning's
Ensure Project Team members know their
responsibilities
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Maintaining project team members commitment to
the project
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Take small steps
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Marketing - provide progress updates to executive
and ensure small successes are communicated.
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Communication/ communication/ communication

Questions