Date Added: Jan 2010
Implementing advanced supply chain capabilities (for example, cross-functional planning or collaborative forecasting) at a public utility has always been challenging. One reason is that utilities in general have had very little incentive to embrace advanced supply chain concepts because their regulated, monopolistic industry has been very accommodating of poor performance. Most of inventory (especially items capitalized upon receipt, such as transformers) can be immediately added to the asset base, thus supporting the case for increasing the rates customers pay. Utility does not periodically take a charge for obsolete inventory, but carries the material for decades.