Baker Hughes provides oil and natural gas industry products and services worldwide for drilling, formation evaluation, well completion, and production.
Operating in more than 90 countries around the globe, Baker Hughes divisions are organized in two segments that share common opportunities in developing and delivering technology solutions during distinct phases of oil and gas development.
Baker Hughes constantly re-evaluates its North American fleet of 5,750 Class 1-8 vehicles, used for sales, servicing customer well sites, and transporting product to customers. To better gauge customer satisfaction, the company’s Strategic Sourcing Fleet Commodity Team conducts regular focus groups of its customer base: the company divisions.
Divisions Help Set Strategic Sourcing Decisions
Divisions are involved in strategic sourcing decisions through their participation on Baker Hughes advisory boards and driver focus groups.
Brenda Davis, strategic sourcing commodity manager, fleet & temporary services for Baker Hughes Business Support Services, helps lead and facilitate the sourcing process and advisory boards. Once the process is in place, she tracks program compliance and reports on supplier performance.
Davis and a staff of three source all products and services for fleet and temporary staffing services, and manage the company’s fleet from acquisition to disposal.
“Part of my responsibility is to build supplier relationships and ensure our suppliers are performing to negotiated service levels,” Davis said. “So we stick around through the entire process.”
Davis’ customers are the company’s divisions.
“We are in a shared-services environment, reporting to corporate, and supporting all divisions in the U.S. and Canada,” she said. “Our goal is to source products and services that meet the overall good of Baker Hughes. During a sourcing initiative, we consider more than just price; we consider all the different attributes of an agreement — service, technology, quality, etc.”
While leasing light-duty vehicles from Donlen Corp., Baker Hughes leases and owns medium- and heavy-duty vehicles. Each division chooses whether to lease or own heavy-duty vehicles based on lifecycle cost analyses.
Suppliers include Ford, Peterbilt, and International Truck and Engine Company. Replacement cycles are five years/125,000 miles for light vehicles, and set on a case-by-case basis for medium- and heavy-duty vehicles.
Drivers Provide Input on What’s Working
The company’s Strategic Sourcing Team asks company division customers to provide feedback on sourced products and services, including fleet products and services. The Customer Account Services Team in Baker Hughes Business Support Services requests customers at random to participate in quarterly focus groups to ensure their satisfaction with all services and products. Focus groups typically involve 10-15 participants, all from different divisions.
“Our focus groups provide feedback that enables us to continuously improve our processes and service levels,” Davis said. “Our goal is to ensure we provide our divisions the products and services they need to do their job.”
After a focus group meeting, Davis addresses each issue raised regarding fleet products and services to determine possible process gaps and necessary improvements. She then provides feedback on action items and new products and initiatives.
According to Davis, focus groups offer an opportunity to identify and quickly resolve a myriad of issues. Often, they provide information that explains why certain processes have been implemented. At other times, stakeholders provide information the team uses to improve its processes, creating a win-win situation.
As a shared services organization, part of Davis’ responsibilities is to ensure customers get what they need to perform their jobs.
Baker Hughes also conducts company-wide employee surveys. If Davis receives a completed survey with a below-average score, she utilizes the Customer Account Services Team to conduct a focus group on those specific items rated below average.
“Our Customer Account Services Team is a liaison between all functional areas in our Shared Services group and our customers,” Davis said. “They are the conduit for info from our divisions to us, and they allow us to use them to conduct focus groups. They help us determine if Strategic Sourcing is meeting customer expectations.”
Through the focus group format, Davis has been able to resolve issues quickly, as well as implement process improvement ideas. “In a recent focus group, I learned that a dealer in a remote area was no longer going to accept our current method of payment,” Davis said. “This would have meant that we had to travel 100 miles to the nearest service center. I was able to contact the dealer and put in place a new procedure to ensure current service levels.”
Advisory Boards Help Source Products and Services
The company also relies on advisory boards to ensure divisional business requirements are fully considered in product and services sourcing. The advisory boards also communicate issues, implement programs, and report on completed improvements.
“They provide divisional support and research, decision-making, and two-way communication,” Davis said.
The boards provide information on business requirements, help clarify processes, review and approve key documents, participate in negotiations and implementation of programs, and communicate improvement opportunities.
By consensus, they also recommend suppliers for the product or service.
“Everything is done by consensus,” Davis said. “Advisory board members can recommend removal of a supplier or a change in scope based on a business case, and they also play a key role in any benefits that are realized.”
The boards are composed of divisional representatives. The fleet advisory board can consist of drivers, managers, and finance and safety associates. Each board is created based on the product or service being sourced. “We want to make sure we have the key stakeholders involved,” Davis said. “Generally, we have one rep per division, but we also invite subject-matter experts to attend.”
The advisory boards meet on a quarterly basis or as required to discuss service levels, process improvement ideas, and to review metrics even after the sourcing initiative has been completed.
Because of their success, Davis said Baker Hughes will continue to use focus groups and advisory boards in the future. “They are working so well, and they continue to help us ensure that we’re meeting our customers’ expectations,” she said.