How Requis is revolutionising supply chain management in the energy sector
Richard Martin, CEO at Requis, discusses the firm’s cutting-edge supply chain management platform that is revolutionising supply chain visibility, accessibility and efficiency for energy companies around the world.
What is the function of the Requis platform and how does it add value for both Worley and the wider, global energy sector?
Requis is a next generation supply chain platform (SCM) that redefines how the enterprise demand chain and supply chain integrate throughout project and asset lifecycles. It’s not about demand or supply, but rather about the value that is generated across both chains. In fact, they are not actually chains, but rather an integrated network of participants who engage through Requis services centered around industry-standard data sets including asset catalogues, inventory, surplus and 3D printing. Although the term ‘supply chain’ may continue to be used, Requis is more aptly referred to as a value network platform.
Services such as procurement, vendor management and catalogue management are completely reimagined and integrated with other services such as rapid sourcing, access to 3D printing and a global surplus marketplace. All these services and more are available to the entire network of vetted Requis participants, all from one, secure platform.
The synergies with Worley are immense and, selfishly, we cannot be more fortunate in having them as a strategic investor, a trusted partner and a lead customer. Worley’s industry leadership and credibility extend Requis’s reach by providing unprecedented access to resource, energy and chemical customers who have already begun to engage with Requis today.
In a general sense, what are the key drivers and aims of enhanced SCM in the energy sector?
When I played baseball, I remember asking my coach if I should work on my hitting, fielding or running, and his answer was: yes! My point is, there are a number of priorities thrown at supply chain professionals: reduced costs, increased agility, reduced cycle times, reduced waste, reduced surplus, etc. But, based on recent customer interaction, I’ll simply state efficiency as the key driver of an enhanced supply chain.
Efficiency is driving many changes and investments in the market, and having an effective approach to supply chains is growing in importance. Understanding the inventory of your own company before going out to market can have significant cost savings and creates a much more streamlined approach to stock management. For some of our customers, stock visibility is a huge benefit from using the Requis platform. This allows companies to keep an appropriate level of stock and manage their inventory effectively.
If I had to call out another it would be competitive differentiation. If you can manage your supply chain better than your competitor, that means you can do it faster, for a higher margin, with better quality. And in response to faster, higher and better, my coach would say: yes!
What are the biggest challenges facing effective supply chain management in the energy sector, and what steps can companies take to overcome them?
I believe there are two big challenges to effective SCM in the energy sector. The first is simply making sure it is a real priority. There can be many competing priorities for a business, but ensuring the supply chain is thought about and managed is key. This is something the industry is starting to recognise. Supply chain roles are increasingly growing in importance within organisations, with more and more taking up seats in management teams and meetings.
The second is the inherent disconnected nature of the energy demand chain and supply chain. I refer to this as the Amazon problem. Where do you go when you are looking for something or need to sell something? Think of the retail space before Amazon, or even eBay for that matter. This divided dynamic leads to inefficiency from procurement through management, disposition and finally scrapping. It has led to warehouses and yards full of surplus with limited visibility. This is where the Requis platform comes in.
By connecting the players in the supply chain to the same platform with standardised asset data and services, enterprises are opening themselves up to a whole new world. Enterprises can work with their existing suppliers in what we refer to as a Virtual Private Value Network (VPVN) and/or consider new suppliers, or consider supplier or operator surplus that is in the Requis Global Marketplace. They can even have visibility into their own surplus for reuse instead of buying assets they already own. They can compare prices, they can see how a supplier or customer is rated, they can use analytics to gain insights into their procurement or supplier, and can gain insights into their sales. The benefits are extensive and significant. None of this would be possible without a supply chain ecosystem comprised of a mesh of thousands of one to one relationships.
How have new technological innovations facilitated the development of solutions that enhance visibility and traceability across supply chains?
I believe the Requis platform is a great example of new technology innovation driving enhanced visibility and traceability across the entire supply chain and throughout the entire lifecycle. One of the underlying building blocks of the Requis platform are standardised asset records. Where industry standards exist, we will look to adopt them, where gaps exist, we will seek to contribute towards the establishment of standards. Our vision is to have that asset record created at birth and have this same asset record gather information throughout the lifecycle of an asset until end of life. This would incorporate other technologies such as IoT, for example, and it would ultimately be a great application of blockchain. The result is something I’d compare in North America to the CarFax: essentially allowing you to pull the entire history of a vehicle from its initial sales tracking - geographically, operationally and commercially - even though it has had many owners. Going a step further in the Requis platform, even the details of the transaction that led to the change of ownership of an asset are fully auditable.
What do you view as the most promising emergent technologies for improved supply chain management in the energy sector?
When I think about the potential for an emerging technology, I consider the value of how the technology can optimally be applied, tempered with the probability of that scenario materialising. Flying cars had tremendous promise in the 50s. Separately, I think it’s a mistake to think of these independently or in silos, rather than think of what application or solution holds the most promise and accept that it will incorporate a combination of these technologies. I’m more interested in the problem and resulting solution then a specific technology. That said, I’m a tech geek, I’m a great believer in automation, I like things to be automatic. In that regard I’m a fan of IoT, AI and data. Requis will play a significant role in gathering asset lifecycle data and using that data to ensure enterprises are achieving a maximum return on assets by enabling them to follow the path of highest economic return.
How do energy customers, both professional and commercial, stand to benefit from increased sustainability and ethical practices across energy sector supply chains?
I think the best way to approach the question of sustainability is by considering the counter argument. By definition something non-sustainable is doomed to end, and as a result, sustainability seems like the only viable path. Attitudes are changing across the industry towards sustainability, reducing waste and elongating the life of assets and components. This new way of thinking is impacting the supply chain. For me, it’s less of a focus on circular economy or linear economy but more on how we can establish a high-visibility supply network that creates economic incentive for the participant to adopt new, sustainable behaviours.
Looking forward, how can powerful SCM platforms enable energy companies to adapt to legislative changes around the world pertaining to reduced reliance on fossil fuels?
I believe reducing reliance on fossil fuels is one of those topics that everybody nods to in agreement, but the real challenge is achieving that within other political constraints such as providing reasonable energy costs, with safe energy alternatives. Nuclear, for example, is clean and inexpensive but carries a perceived safety risk that eliminates it as an option in many countries. A platform like Requis can help by making the supply chain more efficient, driving the reduction and reuse of surplus assets globally. It can connect non-fossil fuel participants in a new value network that drives the deployment and adoption of alternative energy assets. This new value network could circumvent existing inhibitors and enable a more direct system of subsidies and incentives to reach a critical mass of clean energy production. This is an important topic, and the Requis team is motivated to help in any way we can.
Technology revolution for water retailers
In April 2017, the UK’s water retail market in the world opened for business – the single biggest change to the water sector since privatisation. This development allowed businesses, charities and public sector organisations to shop around for the best deal.
However, like any industry, this change hasn’t been without its sticking points; here, Paul Williams, CTO at Everflow Tech (pictured far right), discusses how retailers can harness technology to their advantage
Quotations could take up to a week to produce, billing software had to be manually updated and brokers were unable to manage the complete customer journey in one place – all of which took time, cost money and allowed for human error.
The more complexity that was involved in billing or quoting, the more contact end customers needed to have with their retailers, pushing up the cost to serve for every SPID. This meant retailers – ourselves included – found themselves in a situation where profits were simply eaten up by service costs.
We also note that it can traditionally be hard for retailers to stay on top of balancing what they are charging their customers with what they are being charged by the market. To further exacerbate this, the longer a change goes unnoticed, the more trouble it can be to balance the issue.
It was these issues that Josh and his (at the time) small team wanted to ameliorate, creating their own technology in the absence of anything else.
This technology evolved into our award-winning retail sales, billing and customer management platform for the water retail market, and Everflow Tech was launched as a standalone venture in 2018, selling the software externally for other water retailers and their customers to benefit from.
What retailers want
As a relatively new entrant to the world of utilities competition, the water market could be seen to be lagging behind, particularly when it comes to innovation.
In fact, as recently as 2019, Ofwat said it expected the industry to be making technological advances and to be working with a culture of innovation, collaborating with companies both within and outside of the sector.
And with cost-savings for consumers traditionally lower than for other utilities, retailers need to be offering something more – whether that’s better support, energy-efficiency advice or more accurate data.
What’s more, consumers have had a taste of the power of technology, and they’ve come to expect nothing less from retailers across the board.
Another key issue – thrown into sharp relief during the past 12 months (and counting) of a pandemic – is rising levels of arrears, which are likely to increase bad debt beyond margins that retailers originally allowed for when the market was created.
In such a low-margin industry, there is a limit to the amount of debt retailers can take on, especially as recovering costs can be a very slow process. Ofwat has signalled that this issue could be addressed as early as this year, with a mechanism for recovering bad debt to be established during 2021/22.
The market needs simple solutions to better serve the end user, and we were perfectly placed to develop those solutions. At Everflow, our software is designed for the water retail market, by the water retail market.
As well as simple billing, clear-to-understand workflows, and a revenue assurance system to allow retailers to quickly compare market charges, Everflow has also introduced a complete debt solution, allowing missed payment dates to drive late payment charges and escalations automatically.
Retailers are able to design and put out their own bill and quotes, tailoring customer journey and overall experience – whatever the circumstances.
What does the future hold?
Automation is key to any industry; we’re heading into an age of driverless cars and smart homes, and this drive for tech will filter through to our industry, and we need to catch up.
The Internet of Things – a network of physical objects connected to each other – means human error (and effort) can effectively be removed from many everyday tasks, which goes for meter readings too. However, in the 21st century, the water market is still not leveraging previously emerged technology in the form of smart meters to provide accurate billing.
Consumers are also becoming more empowered, both to ask for information and change their preferences if they don’t like what they learn. Retailers need to be armed with this information, not next week, not tomorrow, but now – and, at Everflow Tech, we’re putting that information at their fingertips.
But the retailers themselves need to speak up too, and we will always work with them to get the best ideas on what needs to be developed and when.
Our strong bond with Everflow Water, along with other key customers, means we have a direct interest in making sure our systems serve the water market in the best way they can.
For us, the goal is to make sure retailers on our platform can grow as much as possible, leaving behind laborious daily processes to focus on their own strategic growth and, most importantly, helping their customers.