What's the bottom line for Chevron? Chevron's office in Bakersfield, California, where e-procurement is centralized, currently handles about $80 million of product procurement costs. By replicating the Internet procurement process in offices around the globe, Clementz says, "We plan to cut $200 million out of our $10 billion cost-of-operations spending by next year."
That may seem small percentage-wise-about 2 percent of the cost of operations - but in dollar terms, it's a significant savings. Beyond replicating the process in other global offices, where does Clementz see Chevron's Internet-centric supply chain trend going?
"About 40 percent of our cost of operations goes to supplies currently, and about 60 percent goes to services," he says, "so we think there is a big opportunity to do for our services procurement what we did with the Internet and product procurement. We think this is the next step. And the key for us in all of this was to look out beyond our firewall."