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Optimizing Inventory at Gas Utilities; What Do the Benchmarks Tell Us?
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* Aga
* Inventory Management

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ATLANTA - Jan. 8, 2014 - PRLog -- Eric Schoeniger, writer for American Gas magazine, recently spoke with Andy Flores (, partner and supply chain practice area leader at ScottMadden, Inc., about optimizing inventory as a part of supply chain management.

The following transcript provides an excerpt from the December 2013/January 2014 issue of American Gas, published by the American Gas Association. To access the article “By the Numbers,” please click here (

“Asset-intensive companies manage their asset inventories to optimize operations and minimize costs,” says Mr. Schoeniger. “That inventory includes all the materials and supplies to support their operations, from construction to repair and maintenance. The value of inventories at gas and electric utilities grew 7 percent over the past two years, according to Federal Energy Regulatory Commission data. Annual inventory carrying costs ranged from 12 percent to 14.4 percent.”

“ScottMadden and Oniqua MRO Analytics surveyed asset-intensive industries on behalf of the Utility Materials Management Benchmarking Consortium. Those industries included four segments: gas and electric utilities; oil, gas, and petrochemicals; mining, metals processing, and fabrication; and suppliers and support services. Among nine metrics commonly used to gauge inventory-management performance, utilities rated themselves highest in four categories but lowest in five others,” says Mr. Schoeniger. An overview of the global, cross-industry inventory management and optimization benchmark study can be found here (

“Three practices contribute most to improving inventory-management efficiency, according to ScottMadden, continues Mr. Schoeniger. “First is assigning responsibility for inventory optimization to corporate or business-unit specialists as opposed to warehouse-level specialists. Second is better integration of inventory-management and asset-management systems. And third is the use of inventory-optimization systems.”

“Utilities have room for improvement in these areas, especially in the use of solutions for optimizing inventory,” Mr. Flores told American Gas. “Two thirds of utilities assign responsibility at the corporate or business-unit level, and 70 percent have integrated inventory and asset management. Only 28 percent use inventory-optimization solutions such as demand forecasts and optimization algorithms,” added Mr. Schoeniger.

About the Author
Eric Schoeniger is a writer and chief creative officer of Cadwalader Communications, based near Philadelphia. He has 25 years of experience writing about business, information technology, life sciences, and energy. Mr. Schoeniger has consulted to leading organizations such as Deloitte, Ernst & Young, SAP, and Unisys, and his writing has appeared in special advertising sections in Bloomberg Businessweek, The Wall Street Journal, and other publications. He contributes regularly to American Gas magazine, produced by Leverage Media for the American Gas Association.

About ScottMadden’s Energy Practice
Since 1983, we have been energy consultants. We have served more than 300 clients, including 20 of the top 20 energy utilities. We have performed more than 2,400 projects across every energy utility business unit and every function. We have helped our clients develop strategies, improve operations, reorganize companies, and implement initiatives. Our broad and deep energy utility expertise is not theoretical—it is experience based.

About ScottMadden, Inc.
ScottMadden is the management consulting firm that does what it takes to get it done right. Our practice areas include Energy, Clean Tech & Sustainability, and Corporate & Shared Services. We deliver a broad array of consulting services ranging from strategic planning through implementation across many industries, business units, and functions. To learn more, visit | Twitter ( | Facebook (!/ScottMaddenInc) | LinkedIn (

Media contact:
Mary Tew

Mary Tew
Source:ScottMadden, Inc.
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Tags:Supply Chain, Optimizing Inventory, Aga, UMMBC, Inventory Management
Industry:Energy, Multimedia
Location:Atlanta - Georgia - United States
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