Procurement - Marco Longoni

ERG PROCUREMENT "ONECOMPANY" : AN EVOLVING ROLE

We have met Marco Longoni, Head of Procurement at ERG, to ask him about the important changes introduced and the challenges being faced by his team.

How is Procurement supporting the transformation undertaken by ERG?

In developing and consolidating its new role as leading market operator in the production of electricity from renewable sources, wind, water, natural gas and recently also solar energy, ERG has concurrently undertaken a corporate and organizational consolidation in line with its new mission and industrial dimension. It launched the "OneCompany" project that led to redrawing the Group's corporate and organizational structure to suit the new business model. In this respect, ERG has also set up a new centralised unit to handle the purchasing processes for buying goods and services, whether of business or corporate nature: "Procurement OneCompany", as the enabler of all the negotiation levers of the purchasing process and of economies of scale.

In particular, how is the Procurement's approach evolving?

Our ambition is to make the role of Procurement evolve from the traditional "purchasing" activities to those of "strategic procurement" by introducing new organisational and management logics: from the handling of individual purchase contracts to the cross-departmental one of purchasing categories through category management, from the handling of the "vendors' list" to Vendor management issues, strategic sourcing applying intelligence to costs and the supply market. A new proactive role in the management of the vendors' list, also introducing new innovation logics (for example, "innovation days" and interfunctional company workshops), technological, development and risk management support.

And what about the role of the Buyer?

Also Buyers will have to evolve and improve their skills in line with the new management model: from reasoning in mere "contract" terms to focusing on purchasing categories, monitoring them across the company, and then drawing up plans and making decisions: for example suppliers' pooling, unbundling supply chain, development of framework agreements, and many other optimization levers to be used. A shared company need to take a leap in quality as far as Procurement is concerned, as a strategic lever to be competitive, in particular in the current competitive renewable energy market scenario.