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Driving Change. SA LGAP Procurement Development Programs - NPP Presentation. Chris Newman PMMS Consulting Group. Procurement Development Activity across Australia/NZ. QLD State Government QGCPO change program . Gold Coast Council – Capability Development and Contract Management. - PowerPoint PPT Presentation
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Chris NewmanPMMS Consulting Group
Driving ChangeSA LGAP Procurement Development Programs
- NPP Presentation
Procurement Development Activity across Australia/NZ
QLD State Government• QGCPO change program
VIC State Government• CIPSA Certification
VIC Local Government• Procurement Excellence
Program• Contract Management
Guidelines and Training
NZ Government Agency assessment
NSW State Government• Accreditation process with 7
Departments• $1bn Savings Program
NSW Local Government• Roadmap Program with LGP• Procurement Leadership Program• Social Procurement Guidelines• Sydney Metro Councils (16) Joint
Procurement Development Program
State Government
Local Government
SA Local Government• Roadmap Program• Regional Opportunity
Analysis
Procurement Capability Assessment / Development
Federal Government• Contract Management
Development
Federal Government
Gold Coast Council – Capability Development and Contract Management
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 PilotMetro RegionalWest Torrens Loxton WaikerieSalisbury Wattle RangeBurnside Mount Barker
Murray Bridge
Why the focus on procurement ?The benefits
1. Drive efficiency and financial sustainability2. Improve probity and process3. Support council strategic objectives
o Delivering services, projects and capital works programso Regional/ Local Economic developmento Sustainability and Social objectives
4. Act as an enabler of broader reformo Capital works and budget planningo Project management and deliveryo Regional and Sector Collaboration
Procurement Maturity Model
6
Process & Governance Strategy &
Organisation
Leadership & Influence
Technology
FOUNDATIONS
People & skills
Triple Bottom Line Supplier
management
Sourcing & Collaboration
STRATEGY
BENEFITSCouncilobjectives
Dimensions of Procurement Excellence
Procurement best practice ‘dimensions’
Data Capture
Consultant Analysis
Roadmap Workshop
Roadmap Review
What it is
• 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
• Regular reviews of roadmap progress
• Tracking at 6,12 and 24 monthly reviews
• Background
• Process overview
Who Attends
• All Council Project Leaders/ Teams
• PMMS
• Council Project Team
• Key Council Stakeholders
• PMMS Support
• PMMS • All Council Project Teams
• Key Council Stakeholders
• Council Project Team
• Key Council Stakeholders
• PMMS
• Presentation to Senior Management Team
• Project Leaders
• GM and Senior Management Team
• PMMS
1.5 Hours 1 day 2 hours 6/12/24 months
• Preparation of Roadmaps
• Distribution to Key Stakeholders for review
• Council Project Team
• Key Council Stakeholders
• PMMS
Procurement Roadmap Process
Half – Full day
• Brining together participating councils
• Sharing of roadmaps, issues and opportunities
• Identification of collaboration opportunities
• All Council Project Leaders/ Teams
• Key Council stakeholders
• PMMS
Roadmap Implementation
Final Program Workshop
Senior Mgmt Presentation
Kick-Off Workshop
3-4 weeks
2-3 weeks
1-2 weeks
1 2 3 4 5 6 7 8
8
Direction, Roles and Procedures Communication , Training and Annual Planning
Supplier Engagement and Strategic Opportunities
Procurement Roadmap
1. Build Roadmap into Council Strategy/ Action Plan
2. Establish Procurement Steering Group
3. Finalise procurement processes, documentation and templates
4. Incorporate Procurement into key processes - Budget, Records, Corruption Prevention Plan
5. Introduce Leadership Training and Induction
6. Develop program for introducing purchase cards
7. Develop business case for procurement resource
8. Review application of Finance System for data and procure-to-pay model
Phase 1 0-6 months Phase 2 6-12 months Phase 3 12-24 months
9. Develop Procurement Portal on Intranet site
10. Staff Training Program11. Develop contract
management processes and systems
12. Review current contract coverage and plan for new panel contracts
13. Develop Annual Procurement Plan and Quarterly Reports
14. Develop Supplier Education Program to assist local businesses
15. Develop Category Coding Structure
16. Undertake Procurement Audit as part of internal audit program
17. Develop Triple Bottom Line Procurement
18. Define contract management roles and undertake training
19. Audit compliance to preferred supplier contracts
20. Develop procurement skills development/ training plan
21. Hold supplier forums assist local businesses
22. Review Stores processes and opportunities
23. Incorporate Disposal of Assets into procurement procedures
24. Develop and implement Cost Savings Tracking Register
Procurement RoadmapExample
Detailed description Responsibility Target date
1Build Roadmap into Council
Strategy/ Action PlanPresent to senior management to gain endorsement and establish Roadmap as on-going Strategy/ Action Plan
VC/KM/CSM 1/11/2011
2Establish Procurement Steering
Group
Establish a Procurement Steering Group to co-ordinate the implementation of the Roadmap, procurement activity generally and the Annual Procurement Plan. Meet regularly (eg quarterly).
CSM 1/11/2011
Finalise procedures document and associated templates VC/KM 31/01/2012Develop a Procurement Flowchart including roles and responsibilities VC/KM 31/01/2012Request final feedback from stakeholders on current processes and templates PSG 31/01/2012Develop Role Statements for key Procurement Roles - eg Procurement Team and Contract Managers
VC/KM 16/12/2011
Ensure procedures include consistent Procurement team involvement in evaluation
VC/KM 31/01/2012
Implement LGP Tender Toolbox (Updated by MIDGOC Procurement Alliance) VC/KM 31/01/2012Develop Segregation of duties model as part of process documentation to eliminate potential for the same person to order/approve/pay suppliers
VC/KM 16/12/2011
Add Procurement Checklist to Budget Bid Documents/s CSM 30/11/2011
Introduce structured Numbering system for Tenders (lin with new Records requirements)
VC 31/01/2012
Link to Procurement Roadmap to Corruption Prevention Plans CSM 19/11/2011
Hold a Training Program for the Senior Leadership Team (incl: Team Leaders). Half day on why and how for procurement practice at Taree.
VC/KM/CSM 30/03/2012
Incorporate Procurement into new Council Induction Program VC/MG 30/11/2011
6Develop program for introducing
purchase cardsEstablish Purchase Cards Program VC/CSM 1/02/2012
7Develop business case for
procurement resource
Identify required resource to deliver against priorities and actions in this plan. Forecast benefits from additional support (financial, risk, compliance, performance etc)
VC/KM 1/02/2012
Develop preferred option/s and business case for introducing a Procure-To-Pay System - including review of the Sun e-Procurement module
VC/KM/CSM 1/02/2012
Review Finance and Procurement Structure to explore easy and consistent access to procurement and spend data
VC/KM/CSM/ CC 31/03/2012
Define accounts payable processes and accounctabilities VC/KM/CSM/ CC 30/11/2011
8
Incorporate Procurement into key processes - Budget, Records, Corruption Prevention Plan
4
High level action
3Finalise procurement processes, documentation and templates
Review application of Finance System for data and procure-to-pay
model
Introduce Leadership Training and Induction
5
Spend analysis is used to identify procurement opportunities
10
Total Procurement Spend
SA LG - Procurement Capability Self-Assessment Summary
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
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!
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
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
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 Implementati
on
Spend Category Matrix
Tier 1
Tier 2
Construction Utilities Equipment Fleet Asset MgtProfessional Services Materials Operations ICT
Building Electricity Hardware Fuel Building Consultancy Concrete Environment HardwareCivil EPA Irrigation Heavy Fleet Carpentry Engineering Construction Pool NetworkConcrete Water Landscaping light fleet Cleaning Environment Gas street cleaning PhonesElectrical Parks R&M Electrical Finance Landscape Street lighting SoftwareIrrigation Parts Registration Engineering Insurance Office Supplies Waste Collection Landscape Plant Hire Tyres Fencing Legal Quarry Waste Management Pipelines PPE Hygiene Architect Signage Water Road reseal Pumps Landscaping Training Bins Sculpture R&M Linemarking labour hire Pest Control Walls Locksmith Planning Maintenance Painting Paving Plumbing Pools Signage Tank cleaning Waste Mgt Weedspraying
Procurement enabling strategiesStrategy 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
20
Top Tier 1 Spend Categories FY 11-12represents 76 % of total spend
21
Tier 1 Category FY comparisonRow Labels 11/12 12/13 Grand TotalConstruction 5,460,606 2,440,934 7,901,540Utilities 4,235,290 2,619,020 6,854,310Fleet 2,236,354 1,385,400 3,621,754Equipment 2,339,989 1,121,347 3,461,336Asset Management 2,203,450 1,201,240 3,404,690Materials 1,366,201 1,706,942 3,073,143Professional Services 1,688,202 827,127 2,515,330Operations 1,201,219 1,018,794 2,220,013ICT 741,356 415,941 1,157,297Grand Total 21,472,667 12,736,744 34,209,411
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
11/12 12/13
22
Construction Categories FY 11-12Row Labels Berri Loxton Renmark Grand TotalRoad reseal 420,678 1,178,826 189,992 1,789,496Irrigation 1,371,617 33,209 29,937 1,434,764Civil 294,452 793,327 1,087,779Building 172,350 204,423 279,797 656,570Pipelines 251,279 251,279Electrical 37,167 49,045 86,211Sculpture 59,227 59,227Landscape 50,065 50,065Grand Total 2,259,097 1,805,958 1,395,551 5,460,606
0200,000400,000600,000800,000
1,000,0001,200,0001,400,0001,600,0001,800,0002,000,000
Berri Loxton Renmark
C1 C2 C3
C1 C2 C3
23
Category: Construction – Road Reseal FY 11-12
Sum of Spend Column LabelsRow Labels Berri Loxton Renmark Grand TotalBORAL CONSTRUCTION MATERIALS GROUP LTD 54,088 914,073 968,161MILDURA RURAL CITY COUNCIL 196,746 165,500 362,245FULTON HOGAN INDUSTRIES PTY LTD 264,753 19,096 283,849DOWNER EDI WORKS PTY LTD 112,517 112,517TOPCOAT ASPHALT CONTRACTOR 57,327 5,396 62,724Grand Total 420,678 1,178,826 189,992 1,789,496
0200,000400,000600,000800,000
1,000,0001,200,000
Renmark
Loxton
Berri
C1 C2 C3
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