1. Procurement Process Lean Event Value Stream Analysis of the Procurement Process at UTPA

2. Procurement Process Charter Problem Statement The sequence of procurement events could be further streamlined to reduce “friction” and improve overall process cycle time Approach We will use value stream mapping as a method to visually represent the process, identify value added activities and improve or eliminate non- value added activities Unclassified2

3. UTPA Procurement Improvement Team Unclassified3

4. The UTPA Procurement Process Purchasing + Central Receiving + Accounts Payable = “Procurement Services” Start: User Need Stop: Closed Approval Evaluate Request Pay & Close out Order Receive Part or Service Order

5. General Takeaways The procurement process is already good. This event allowed us to “see” the overall process and determine ways to provide even better service levels In a lot of cases, errors created early in the process by the users ripples downstream and causes delays in the process. We need to address the “upfront” process and educate users to enter the right information, so we significantly reduce effort processing errors. This requires explicit consideration of the communication and handoffs in the system. We saw the importance of eliminating handoffs and breaking down organizational barriers This process allows various members of different organizations to communicate and work together to “fix” problems. We think this type of process is valuable and could be used to improve more processes at UTPA. We can do this ourselves, but it will require University leadership commitment! Unclassified5

6. 6 What is a Value Stream Map? A visual representation of the process or processes utilized to deliver value to a customer VSM provides a structured approach for “seeing” the sequence of events required to deliver customer value. VSM provides a way to identify the customers of a process, and define how each step in the process impacts what the customer values. VSM provides a way of “seeing” opportunities to minimize waste and improve process performance VSM provides a way of getting people from different disciplines to see and talk about the flow of processes in a common language, and at a common level

7. Unclassified7 Philosophy of a Value Stream Seek perfection by identifying and eliminating all activities that are non-Value Added.

8. Unclassified8 The 7 (or 9) Deadly Sins of Waste 8. Human Potential (Spending Effort Doing the Wrong Thing) 9. Scatter (Inability to focus on completion of a task)

9. Unclassified9 Value Steam Map Agenda CI Training SIPOC Boundaries Voice of the Customer Set up the Current State map Walk the value stream and gather facts Day 1/2 Day 1/2/3 Complete Current State Floor Plan Spaghetti Diagram Info Exchange Circle Diagram Analyze the Current State map Time Value Analysis Brainstorming Cells and Pull Systems Inventory strategy Day 2/3 Dealing with Monuments Pacemaker Process Future State Map Rapid Improvement Plan* Improvement Metrics Out brief The Transformation Plan, or “Rapid Improvement Plan”, is the most important output of the VSA. It is the list of actions you will take to remove waste and implement change.

10. The Process in Action Unclassified10

11. SuppliersInputsProcessOutputsCustomers VendorsNeed Procurement Process GoodsUsers RequestersRequestServicesDepartments Gov’t /UniversityFundsSatisfactionVendors UT SystemsSpecs/ReqsAcceptanceState DepartmentProposalsDocumentationInsurance ContractsComplianceAudits TechnologyForms Warranty Dates and regulationsVisibility 11 UTPA Procurement SIPOC Map Start: User Need Stop: Closed Approval Evaluate Request Reconcile Close out Order Receive Part or Service Process Steps Current Procurement Process Order

12. UTPA Procurement Current State Process Unclassified12

13. Voice of the Customer – System Requirements Low Cost Minimum Time Skilled Services Low “Hassle” Compliant to Regulations Acceptance / Validation Visibility and Communication Overall Process: Capable, Reliable, Agile, Predictable, and Sustainable Procurement Process Unclassified13

14. Analyzing the Current State Unclassified14 Process Efficiencies Yields Gaps in Time between Work and Wait Times Collect Data on Current State Fill Out Travel Voucher Process Step Time and Yield Estimates Calculation Monte Carlo Simulation Modeling Defect Analysis

15. Sources of Friction Lack of Visibility Lack of Flow Choosing the Wrong Path / Routing Errors Training / Insufficient Knowledge Infrastructure – Tools Current purchasing experience is cumbersome Organizational silos (MM & Accounts Payable) Unclassified15

16. Themes in the Future State Visibility – Understanding where the information is, who has it, and the status of the process Priority – Understanding which tasks are more important than others Trigger – How to signal that work needs to be done, or that additional emphasis/priority is needed to keep the procurement moving forward Handoffs – Minimize the “in box / out box” waits from handing tasks back and forth to different functional organizations. Maximize the amount of work that can be accomplished at one time by each group. Delegate – Trust others to accomplish their jobs, and hold them accountable for success Metrics – Measure the current process to establish how well it services the stakeholder’s needs Better Tools – Improve the ability to flow work, provide priority and visibility and extract information out of the Oracle Database Organizational Efficiency – Reorganize the group to be more efficient. House complementary functions under the same organization Unclassified16

17. Procurement Process Future State Unclassified17

18. Key Changes to the Procurement Process Improved Information for Users Customer Service Center Who to call for questions How to fill out forms correctly Visual work flow Improved Website Information Improved Flow Better information in = Fewer errors and overall less delays Fewer handoffs = fewer “inbox” and “outbox” delays Fewer Errors More useful operator training Better Software Tools to do the job Fewer Organizational Boundaries – AP and MM reporting to same organization streamlines consistency of vision and message Unclassified18

19. Organizational Efficiency Combined AP and MM groups 1. Break down organizational boundaries between MM and AP Similar to UTD(?), a single “procurement services department” with responsibility from need through delivery. More manageable – fewer organizational boundaries More Communication – Shared leadership and collaboration 2. Convene a UTPA “procurement services task force” to look at restructuring procurement services organization. Look at organization and tasking. Consider the leadership skills required to accomplish this in the current AP Manager supervisor search Unclassified19

20. Modeled Improvements Unclassified20 By pushing sequential task into parallel and minimizing delays due to handoffs, significant improvements are possible in the modeled performance of the Future State

21. Rapid Improvement Plan Seitz, Dec 2006 Unclassified21

22. Progress has already begun! (Preliminary) Work Flow Process for SPO Completed LAST NIGHT!

23. Parking Lot Items Other groups can Debit department accounts (i.e. Telephone and Police Services) without department cognizance or approval Disencumber remaining funds of P.O.s to completely close out order Reconciliation process Communications – Forms should be in one place (Oracle) Unclassified23

24. General Takeaways The procurement process is already good. This event allowed us to “see” the overall process and determine ways to provide even better service levels In a lot of cases, errors created early in the process by the users ripples downstream and causes delays in the process. We need to address the “upfront” process and educate users to enter the right information, so we significantly reduce effort processing errors. This requires explicit consideration of the communication and handoffs in the system. We saw the importance of eliminating handoffs and breaking down organizational barriers This process allows various members of different organizations to communicate and work together to “fix” problems. We think this type of process is valuable and could be used to improve more processes at UTPA. We can do this ourselves, but it will require University leadership commitment! Unclassified24

25. Unclassified25 It’s up to you … “If you think that you can, or think that you can’t... …you’re right.” Henry Ford