Accenture has helped FirstEnergy, a leading U.S. diversified energy company, develop its Cash Flow Improvement Program (CFIP) that is expected to help deliver $453 million in cost savings over the next three years.
The project, currently being implemented, was launched in April 2015 to capture both immediate and long-term savings to help drive competitiveness and improve the agility of operations. With the support of Accenture Strategy, FirstEnergy conducted a 12-week analysis of savings and operational improvements that focused on cost savings in supply chain, finance, customer care, transmission and distribution and power generation.
The CFIP program is an enterprise-wide effort to help improve cash flow through reduced expenses in both company operations and the generating fleet, with a particular focus on sub-critical fossil-fuel power plants and lower fossil fuel and fuel-related commodity expenses. Employee attrition across the company and a more selective hiring program also are helping drive cost savings.
The project identified more than 100 cost-reduction opportunities, with about 65 percent of the savings expected from lower operating expenses and 35 percent from lower capital expenditure and nuclear fuel expenditure improvements over a three-year period.
“Accenture is a key team member with FirstEnergy, and its recent work on our Cash Flow Improvement Process has been critical to the success of this project,” said Chuck Jones, president and CEO of FirstEnergy. “I set a very demanding schedule and financial targets, and the project exceeded the targets and was delivered on time.”
“Our support of FirstEnergy’s leadership team is helping the company overcome the impact of lower prices for natural gas and electricity,” said Jack Azagury, senior managing director for Accenture North American utilities practice. “FirstEnergy dedicated an outstanding and very senior team to this effort, which allowed our combined team to have a material impact on the company’s financials and competitiveness within a short period of time.”