1. ON TRACK WITH STRATEGIC PROCUREMENT PRESENTED BY Joan Graham, CPPO, CPPB

2. What is Strategic Sourcing? The Federal Definition The collaborative & structured process of critically analyzing an organization’s spending & using this information to make business decisions about acquiring commodities & services more effectively & efficiently. – Office of Management & Budget

3. What is Strategic Sourcing? Academic Definitions Procurement process that continuously improves & re-evaluates the purchasing activities of an organization – Purdue University A systematic and fact based approach for optimizing an organization’s supply base and improving the overall value proposition – University of Michigan

4. What is Strategic Sourcing? NIGP Definition Strategic planning is the process of creating alignment and consistency of action that results in documents that establish the long- range objectives and overall strategy or course of action by which an organization fulfills its mission – Values and Guiding Principles

5. C ommon Theme C ontinuous C onsistent C ollaborative C hange (Improvement) C ritical (Analytical) C ontrolled (Structured)

6. All Aboard! How efficient is the process that you govern? What is the quality of the contracts you are establishing? How do you ensure that the policy of your jurisdiction is consistently applied to all purchases?

7. Get the Train Moving PROCUREMENT’S ROLE Service Function Relieves the organization from performing a function Staff Function Advise & assist groups without connotation of authority Line Function Clearly defined operational responsibilities

8. Get the Train Moving Strategic Procurement adds value to the organization by facilitating the attainment of an organization’s mission, goals and objectives

9. Strategic Procurement Stages Planning & AnalysisFormalizationImplementationEvaluation

10. Strategic Procurement Stages Identify Key Stakeholders One or more persons Procurement Process Facilitator Technical Experts and/or Users Planning & Analysis

11. Strategic Procurement Stages Procurement Profile Extrapolate all procurement expenditures for a specific period of time Provides baseline information that identifies where an organization is spending its resources – what, when, how, how much, from whom Evaluate each supply market & associated levels of risk for each expenditure category Planning & Analysis

12. Strategic Procurement Stages Procurement Profile Process 1.Relate – collect data 2.Cleanse – standardize 3.Categorize – strategic vs. tactical 4.Report-ability – addressable spend Planning & Analysis

13. Strategic Procurement Stages Procurement Profile Analysis 1.Examine existing contracts 2.Identify characteristics for all goods and services consumed 3.Identify Key Stakeholders 4.Supply positioning 5.Assess procurement’s impact on key markets 6.Project procurement expenditures Planning & Analysis

14. Strategic Procurement Stages Planning & Analysis

15. Strategic Procurement Stages Planning & Analysis

16. Strategic Procurement Stages Procurement Profile Analysis 1.Examine existing contracts 2.Identify characteristics for all goods and services consumed 3.Identify Key Stakeholders 4.Supply positioning 5.Assess procurement’s impact on key markets 6.Project procurement expenditures Planning & Analysis

17. Strategic Procurement Stages Formalization Develop a strategy for the identified goods or services Consider relevant legislation, business impact, technical complexity Determine the optimal procurement method  Existing contract  Cooperative contract  New procurement with reused/revised specifications or requirements

18. Strategic Procurement Stages Implementation 1.Business Plan 2.Operational Structure 3.Talent Management 4.Funding 5.Monitoring Control 6.Bridging

19. Strategic Procurement Stages Be sure you have a cow catcher to get the bull off the track Implementation

20. Strategic Procurement Stages Evaluation Evaluate the strategic sourcing strategy Was it successful? Is the data we are measuring what is supposed to be measured?

21. Strategic Procurement Stages