Talking Supply Chain: Managing Your Energy Costs

Traditionally, businesses signed up with their local energy provider to procure the necessary energy to operate their facilities. It was never a procurement function, but rather one of convenience.

That has changed in recent years, and now organizations need an energy strategy as part of their procurement process.

“Signing with whoever you want to sign with is a fairly recent development,” explains Bob Wooten, executive director of Tradition Energy, which provides energy procurement solutions. “Just over 20 years ago we started seeing the electricity markets here in the U.S. and over in Europe deregulate or liberalize, meaning that [you have a choice].”

Wooten, along with consultant Mark Trowbridge, joined Talking Supply Chain podcast host Brian Straight to discuss the energy market, and what companies should look for if they want to “shop” their energy procurement process in search of controllable costs.

According to Wooten, because the process was traditionally straightforward, many organizations still do not understand that they have options to lower or better control their costs.

“If you go back into the 80s and 90s, from a retail consumer standpoint, you didn’t have a choice and so you had people like facility managers that were just managing this function and it wasn’t a matter of procurement,” he says. “There was no strategy to it. It was just making sure that you were paying your bills to the local utility. Fast forward to where these markets are deregulated and you have a choice in many cases. The same people are still managing that and, so they haven’t fully embraced the fact that you can strategically procure these commodities.”

Listen as Wooten and Trowbridge walk listeners through the steps to secure their energy futures.