Capgemini Implements i2 - A Success for Toronto Hydro
With the amalgamated strengths of six former municipal utilities, Toronto Hydro is the second-largest distribution utility in North America.
With the amalgamated strengths of six former municipal utilities, Toronto Hydro is the second-largest distribution utility in North America, delivering almost 25-billion kilowatt hours of electricity to over 650,000 customers and serving a population of almost 2.5 million.
Toronto Hydro required the installation of a Strategic Sourcing enabling package and a Content Management tool, both of which would facilitate continuing harmonization initiatives and interface with the existing Oracle ERP systems.
“The collaborative team from Capgemini, i2 and Toronto Hydro completed the project
on time and under budget - with outstanding results.”
Jeff N. Clark, Vice President, Supply & Services.
Client Profile
The deregulation of the electricity industry in Ontario has forced utilities to transform from monopolies to full-fledged competitors. The recently enabled competition has become the impetus for generating new ideas, developing new products and improving customer relations.
Toronto Hydro Corporation is a prime example of a forward-thinking utility, strategically positioned to become a key player in the deregulated North American energy marketplace. Toronto Hydro Corporation is the parent company under which two subsidiaries operate:
Toronto Hydro Electric System Ltd., a monopoly-based company, operates a safe, reliable and efficient electricity distribution system
Toronto Hydro Energy Services Inc., a competitive corporation, provides customers with fully-integrated energy solutions, from the sale of electricity and other energy products to services designed to improve energy efficiency.
Business Issues
After amalgamation, Toronto Hydro began a series of harmonization initiatives aimed at cutting costs and optimizing operations. Consolidation left the Corporation with as many as six distinct inventory pools, each with its own coding system. Toronto Hydro wished to standardize the various product codes and systems, thereby eliminating functional duplication and drastically reducing inventory.
Toronto Hydro saw an opportunity to reduce procurement costs by making its supply chain more efficient and economical. Capgemini was chosen to participate in the initiative because of its demonstrated success in technology implementations, its team-building skills and its tradition of providing well-rounded business solutions. The project was a joint venture by Toronto Hydro, i2 Technologies and Capgemini.
Solution
“The i2 tools have allowed us to realize the potential savings from our amalgamation. The consolidation and consistency of our legacy-parts content enable both immediate process efficiencies and our planned e-Commerce initiatives.”
Vice President, Supply & Services
Members of Capgemini’s cross-functional team were drawn from three service lines: EEA/ERP, Supply Chain and Technology Consulting.
Phase I of the project was the implementation of i2 Technologies’ eSource, a Strategic Sourcing enabling package. It provides a technology-enabling infrastructure that significantly reduces material costs and inventory. eSource incorporates a best-practices data model and it enables processes such as commodity management, supplier rationalization, and material consolidation.
The software also includes the functionality to analyze supplier performance, corporate spending, inventory and demand. It is a comprehensive analysis tool that facilitates the generation of reports at management level. Capgemini’s team members helped to:
- coordinate project planning
- assess site readiness and develop a production environment
- customize the software to suit Toronto Hydro’s needs
- conduct integration tests
- train users and user-support personnel
- rollout the final product.
Phase II was the implementation of i2 Technologies’ eOperate, an electronic catalogue of parts and products. It incorporates a custom data model, including a set of properties to completely define products from a ‘form-fit-function’ perspective. eOperate provides various search capabilities, as well as functional-comparison and functional-duplicate analyses. The implementation of eOperate forced a data-cleansing initiative and the creation of a catalogue hierarchy. The project team conducted a gap analysis of the capabilities of eSource and eOperate on one hand and Toronto Hydro’s business requirements on the other. Capgemini’s team helped to customize the software to mirror these business flows. For example, the software did not offer ‘off-the-shelf’ interfaces with Oracle.
The project team developed these interfaces from scratch. Although Toronto Hydro personnel were trained in i2 software, they also required training in the customized packages. Capgemini’s team helped to conduct this additional training. From an architectural viewpoint, eSource and eOperate are complex solutions, each based upon an Oracle database structured into an object-oriented package with a customizable data model.
Benefits
Jeff N. Clark, Toronto Hydro Electric System’s Vice President, Supply & Services, expects to see immediate results from the implementation. eSource, for example, includes a supplier-performance component which enables procurement to track and compare vendor delivery and quality. This solid base of information will assist with negotiations and help to generate favorable supplier contracts. The functional-analysis component of eOperate has the potential of creating immense, one-time savings through inventory reduction. It also provides decision support for the optimal management of plant assets and MRO-related spending. Toronto Hydro anticipates that the implementation of eSource and eOperate will save the Corporation ten times as much as the cost of the implementation over a five-year period.
Written in cooperation with Toronto Hydro Corporation
