Presentation is loading. Please wait.

Presentation is loading. Please wait.

SA LGAP Procurement Development Programs - NPP Presentation

Similar presentations


Presentation on theme: "SA LGAP Procurement Development Programs - NPP Presentation"— Presentation transcript:

1 SA LGAP Procurement Development Programs - NPP Presentation
Driving Change SA LGAP Procurement Development Programs - NPP Presentation Chris Newman PMMS Consulting Group

2 Procurement Development Activity across Australia/NZ
QLD State Government QGCPO change program Gold Coast Council – Capability Development and Contract Management NSW State Government Accreditation process with 7 Departments $1bn Savings Program Procurement Capability Assessment / Development SA Local Government Roadmap Program Regional Opportunity Analysis NSW Local Government Roadmap Program with LGP Procurement Leadership Program Social Procurement Guidelines Sydney Metro Councils (16) Joint Procurement Development Program VIC State Government CIPSA Certification Federal Government State Government NZ Government Agency assessment Local Government Federal Government Contract Management Development VIC Local Government Procurement Excellence Program Contract Management Guidelines and Training

3 SA LGA Procurement Roadmap Pilot Program
Based on PMMS Procurement Capability Analysis (PCA) methodology – undertaken with over 300 organisations Capability Assessment benchmarked against over 140 Victorian, NSW and South Australian Councils 7 Councils participated in the Pilot Metro Regional West Torrens Loxton Waikerie Salisbury Wattle Range Burnside Mount Barker Murray Bridge

4 Why the focus on procurement ? The benefits
Drive efficiency and financial sustainability Improve probity and process Support council strategic objectives Delivering services, projects and capital works programs Regional/ Local Economic development Sustainability and Social objectives Act as an enabler of broader reform Capital works and budget planning Project management and delivery Regional and Sector Collaboration 7bn across/50% of spend

5 Procurement Maturity Model
5

6 Procurement best practice ‘dimensions’
BENEFITS Council objectives Sourcing & Collaboration STRATEGY Triple Bottom Line Supplier management PMMS – Brief overview – do not spend too much time but get across broad capability required Our experience tells us that for procurement to be successful it not only needs to be aligned to councils business objectives but also supported by : Competent procurement professionals providing clear leadership for the procurement process Thorough understanding of the supply markets we use and the suppliers we buy from X-functional team working that enable structured decision-making Sourcing strategies designed to achieve sustainable value for money outcomes The model shown here has been widely used to illustrate the 8 building blocks or dimensions needed to develop a successful Procurement team At the base of the pyramid there are five “core” or foundation elements that need to be in place to support and implement individual sourcing strategies. This is followed by 3 elements that focus on the Strategies needed to deliver results With our foundation elements are in place then we have the infrastructure required to not drive change and work collaboratively with internal stakeholders to put in place sourcing strategies that will help to contain cots, reduce supply side risks and improve business performance Process & Governance Strategy & Organisation FOUNDATIONS Technology People & skills Leadership & Influence Dimensions of Procurement Excellence

7 Procurement Roadmap Process
Data Capture Consultant Analysis Roadmap Workshop Roadmap Review Procurement Roadmap Process Senior Mgmt Presentation Roadmap Implementation Kick-Off Workshop 1 2 3 4 5 6 Final Program Workshop 7 8 1.5 Hours 3-4 weeks 1-2 weeks 1 day 2-3 weeks 2 hours Half – Full day 6/12/24 months Background Process overview Data analytics pack Capability assessment Stakeholder questionnaire Documentation review Opportunity analysis Spend analysis Best practice comparison Single council Review analysis findings Validate opportunities Draft strategy and roadmap Preparation of Roadmaps Distribution to Key Stakeholders for review Presentation to Senior Management Team Brining together participating councils Sharing of roadmaps, issues and opportunities Identification of collaboration opportunities Regular reviews of roadmap progress Tracking at 6,12 and 24 monthly reviews What it is All Council Project Leaders/ Teams PMMS Council Project Team Key Council Stakeholders PMMS Support PMMS Council Project Team Key Council Stakeholders PMMS Council Project Team Key Council Stakeholders PMMS Project Leaders GM and Senior Management Team PMMS All Council Project Leaders/ Teams Key Council stakeholders PMMS All Council Project Teams Key Council Stakeholders Who Attends PMMS Outline the roadmapping process What is involved Why we are here today

8 Procurement Roadmap Direction, Roles and Procedures
Phase months Phase months Phase months Direction, Roles and Procedures Communication , Training and Annual Planning Supplier Engagement and Strategic Opportunities Build Roadmap into Council Strategy/ Action Plan Establish Procurement Steering Group Finalise procurement processes, documentation and templates Incorporate Procurement into key processes - Budget, Records, Corruption Prevention Plan Introduce Leadership Training and Induction Develop program for introducing purchase cards Develop business case for procurement resource Review application of Finance System for data and procure- to-pay model Develop Procurement Portal on Intranet site Staff Training Program Develop contract management processes and systems Review current contract coverage and plan for new panel contracts Develop Annual Procurement Plan and Quarterly Reports Develop Supplier Education Program to assist local businesses Develop Category Coding Structure Undertake Procurement Audit as part of internal audit program Develop Triple Bottom Line Procurement Define contract management roles and undertake training Audit compliance to preferred supplier contracts Develop procurement skills development/ training plan Hold supplier forums assist local businesses Review Stores processes and opportunities Incorporate Disposal of Assets into procurement procedures Develop and implement Cost Savings Tracking Register PMMS To give you a clearer picture of what we are aiming to achieve by the end of today …..this is an example of a Roadmap document that was used to present to a councils Senior Management Team and to get their endorsement and support for the changes required to improve Procurements contribution This High-Level overview is supported by a more detailed spreadsheet with specific actions and with names assigned to those who will be responsible for completing each task. Each Roadmap has 3 Phases with a high level description of which each Phase is intending to achieve RRC’s will be on hand to provide on-going support through the early stages of implementation …..and each council will have access to the wealth of data and support that is available through the e-hub and other DPCD initiatives that were explained earlier

9 Procurement Roadmap Example PMMS
To give you a clearer picture of what we are aiming to achieve by the end of today …..this is an example of a Roadmap document that was used to present to a councils Senior Management Team and to get their endorsement and support for the changes required to improve Procurements contribution This High-Level overview is supported by a more detailed spreadsheet with specific actions and with names assigned to those who will be responsible for completing each task. Each Roadmap has 3 Phases with a high level description of which each Phase is intending to achieve RRC’s will be on hand to provide on-going support through the early stages of implementation …..and each council will have access to the wealth of data and support that is available through the e-hub and other DPCD initiatives that were explained earlier

10 Spend analysis is used to identify procurement opportunities

11 Total Procurement Spend
High levels of decentralisation particularly in regional councils, but still common in some netros Much higher % of metro councils with a central department Very few Procurement strategy documents in place Only a few annual procurement plans

12 SA LG - Procurement Capability Self-Assessment Summary
High levels of importance assigned to most areas of procurement Not a substantial difference between perceptions of importance by Regional and Metro Councils Except in Regional collaboration seen as less important by regional councils (perhaps because of G6 and they don’t do it) Perceptions of effectiveness levels are fairly consistent between metro and regional councils (somewhat surprisingly) Except in Probity and Compliance Management and Regional collaboration Regional collaboration is very low in regional areas Substantial difference in perceptions of importance vs effectiveness. This is a positive finding because it provides an impetus for change Key differences in: Acjieving Cost Savings Streamlining Administration Probity and Compliance Management Training and Education Effective Contract Management Providing Quality Procurement Data Effective Management of Categories of Spend Interesting that Tender Process Management is seen to be done well by both regional and metro Triple Bottom line low in importance and very low in effectiveness particularly in regional areas

13 Key Opportunities Regional Collaboration Centre-led Procurement Models
Spend analysis and market intelligence driving decision-making Increasing contract coverage – panels/ supply contracts Innovative sourcing models Savings – Procurement delivery of efficiency dividends Strengthened Contract and Supplier Management Streamlined and managed low-value transactions Technology – Better use of existing systems/ e-procurement/ panel management

14 Why Participate? Creating a ‘burning bridge’ to support your work using Council’s own data and benchmarking Engaging and committing the GM and Senior Management Establishing organisational ownership of procurement development (incl: engineering) Providing a Business Case for: A genuine Centre-led procurement model Raising the seniority of procurement roles Additional resourcing in procurement teams A new focus on strategic procurement Providing a step by step achievable, measurable Plan (Roadmap) for development Creating momentum and enthusiasm!

15 Key Benefits (From Participants):
Engagement and participation from client business units Developing a plan for continuous improvement An action plan with achievable and tangible benefits Staff enthusiasm and understanding of what council needs to do A focused approach to improving current procurement practices and developing a Targeted savings program's Meeting other like minded people in local government and other contacts to allow for information sharing and exchange. Networking and identifying similar across industry issues, collaboration to deal with "issues", increased collaboration and break down of barriers between metro and regional councils Agreement to engage a Senior Procurement Officer to progress a centre led model

16 Pilot Roadmap Program feedback
“A great program that supports change and provides credible, practical and customisable assistance for implementation in any Council situation.” Julie Bussenschutt – Burnside City Council “The delivery of the programme allowed all staff - from coal face purchasing to strategic management to give input and understand where the council needs to improve or look at alternative money saving alternatives. We had lots of "ahhh light globe moments" that could be implemented very quickly.” Robyn Cusick – District Council of Loxton Waikerie “You do not have to invent the wheel, someone else already has it and they are more than willing to share.” Andrew Makin – Rural City of Murray Bridge

17 Riverland Regional Procurement and Economic Impact Project
Program Objectives: Make savings & create efficiencies Stimulate economic development Build staff capability in procurement Strengthen regional collaboration Provide a model for broader SA regional roll out Individual Council Roadmap Program Detailed Joint Spend Analysis Review of Current Contracts/ Purchasing practice Opportunity Analysis Workshopping Regional Roadmap Report & Priority Project Identification Supported Implementation

18 Spend Category Matrix Tier 1 Tier 2
Tier 1 Tier 2 Construction Utilities Equipment Fleet Asset Mgt Professional Services Materials Operations ICT Building Electricity Hardware Fuel Consultancy Concrete Environment Civil EPA Irrigation Heavy Fleet Carpentry Engineering Pool Network Water Landscaping light fleet Cleaning Gas street cleaning Phones Electrical Parks R&M Finance Landscape Street lighting Software Parts Registration Insurance Office Supplies Waste Collection Plant Hire Tyres Fencing Legal Quarry Waste Management Pipelines PPE Hygiene Architect Signage Road reseal Pumps Training Bins Sculpture Linemarking labour hire Pest Control Walls Locksmith Planning Maintenance Painting Paving Plumbing Pools Tank cleaning Waste Mgt Weedspraying Pragmatic approach to 2 tier category classification – it is possible to break down further such as Engineering Category structure & coding for ongoing spend capture and regional analysis

19 Procurement enabling strategies
Strategy Outcome Pros Cons Establish new regional contract Leverage volume via new market approach Potentially high impact Requires time & resources Renegotiate existing contract Improve current contract including option to leverage added volume Less time & effort – also less disruptive Limited negotiating leverage Piggy-back other contracts Leverage LGAP / State Govt contracts Ease of implementation Quality of regional service & influence on large contract Vary the supply model or change demand Innovative solution and /or reduced demand Breakthrough improvement Potentially higher risk and effort to establish Establish effective contract management Achieve desired outcomes, manage change & target improvement Short term return, eliminate waste & leverage supplier resource Requires resource & capability to establish & maintain Pragmatic approach to 2 tier category classification – it is possible to break down further such as Engineering Category structure & coding for ongoing spend capture and regional analysis

20 Top Tier 1 Spend Categories FY 11-12 represents 76 % of total spend

21 Tier 1 Category FY comparison
FY 12/13 Utilities spend tracking above prior full year Materials spike relates to high value bin purchase by Renmark and Berri (going forward these also represent opportunities for regional consolidation)

22 Construction Categories FY 11-12
C1 C C3 C1 C C3 Irrigation large Thinkwater project Pipelines – Alona Water project

23 Category: Construction – Road Reseal FY 11-12
C C C3 High priority to consolidate and no apparent contractual constraints

24 Next Steps? New LGA Roadmap Program participation opportunities in 2013 EOIs now open for Program to begin in June/ July Individual Councils Council Groups Subsidised by the LGA $4,000 cost for Regional Councils $5,000 cost for Metro Councils On-going support for all participating Councils Expansion of the Riverland Regional Development Model to other SA Regions New activities to support council development


Download ppt "SA LGAP Procurement Development Programs - NPP Presentation"

Similar presentations


Ads by Google