Opportunity Assessment
Summary
Deecon were engaged by SGN to perform an Opportunity Assessment (OA) within the Procurement and Supply Chain function, and to support in the attraction of additional Contractors to conduct Mains Replacement works. As part of the OA, 36 recommendations were put forward by the team, including 21 Quick Wins and 15 Longer Term Strategic Improvements. These recommendations formed the basis of six implementation plans, including a Logistics Implementation Plan, and a Supplier Management Implementation Plan. Providing an actionable strategy for SGN to achieve efficiencies and realise savings. In the Contractor Attraction workstream, an initial list of 13 potential Replacement Expenditure (REPEX) Contractors was narrowed down to a shortlist of two contenders who progressed to an advanced onboarding stage.
Situation & Approach
SGN is the holding company of Scotland Gas Networks and Southern Gas Networks, a gas distributor that manages the distribution network for natural and green gas across Scotland and areas within South-East England, including South London. SGN were founded in 2005 and are required to regularly update and maintain over 44,000 miles of pipes to ensure the safe distribution of gas throughout the network.
SGN are working towards delivering Ofgem RIIO-GD2 targets by end Q1 2026 and being cost-effective, without compromising on delivery or safety. Within this, SGN were seeking to improve the efficiency of the Procurement and Supply Chain function.
Deecon supported SGN in two distinct ways:
Contractor Attraction: Onboarding additional contractors to support the Mains Replacement works that SGN are required to complete as part of the Ofgem GD2 targets. This involves replacing old iron pipes with new plastic pipes to meet network safety standards. The team held early market engagement sessions with 13 potential contractors, completed a thorough due diligence considering technical and safety requirements, and two progressed to an advanced onboarding stage.
Opportunity Assessment: Deecon completed an OA to examine the current maturity of core processes within the Procurement and Supply Chain function. The team determined the target maturity level and the corresponding savings that could be realised if these functions were to operate more effectively.
The 36 recommendations that Deecon produced included 21 Quick Win Insights and 15 Longer Term Strategic Improvements. These recommendations formed the basis of six implementation plans, which detailed how the business could action the priority Quick Wins to realise significant benefits in the short to medium term. The primary areas that were assessed included Supplier Management practices, the effectiveness of their Logistics Service and how SGN could improve utilisation of their IT spend to support the Procurement and Supply Chain function.
Results
Deecon’s analysis gave a comprehensive view of SGN’s ‘as-is’ and ‘to-be’ Procurement and Supply Chain function maturity levels, providing 36 corresponding recommendations to address any disparity
Deecon were then engaged to action the work outlined in the Logistics Implementation Plan and the Supplier Management Implementation Plan
The effective implementation of the recommendations are estimated to generate SGN savings of between 20%-25% for Logistics and 5%-10% for Supplier Management
After conducting the required due diligence, an initial list of 13 potential Mains Replacement contractors were narrowed down to two contractors who progressed to an advanced onboarding stage
