Procurement Roadmap - Local Government Association of South

Report
SA LGAP Procurement
Driving Change
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
SA Local Government
• Roadmap Program
• Regional Opportunity
Analysis
Procurement Capability
Assessment / Development
VIC State Government
• CIPSA Certification
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
Federal Government
NZ Government
Agency assessment
State Government
Local Government
Federal Government
• Contract Management
Development
VIC Local Government
• Procurement Excellence
Program
• Contract Management
Guidelines and Training
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
Why the focus on procurement ?
The benefits
1. Drive efficiency and financial sustainability
2. Improve probity and process
3. Support council strategic objectives
o Delivering services, projects and capital works programs
o Regional/ Local Economic development
o Sustainability and Social objectives
4. Act as an enabler of broader reform
o Capital works and budget planning
o Project management and delivery
o Regional and Sector Collaboration
Procurement Maturity Model
Procurement best practice ‘dimensions’
6
Procurement Roadmap Process
1
2
Kick-Off
Workshop
1.5 Hours
What
it is
3-4
weeks
3
Consultant
Analysis
1-2
weeks
4
Roadmap
Workshop
1 day
• Background
• Data analytics
pack
• Documentation
review
• Process
overview
• Capability
assessment
• Opportunity
analysis
• Stakeholder
questionnaire
• Spend analysis
• Validate
opportunities
• Best practice
comparison
• Draft strategy
and roadmap
• All Council
Project Leaders/
Teams
Who
Attends
Data
Capture
• PMMS
• Council Project
Team
• PMMS
• Single council
• Review analysis
findings
5
Roadmap
Review
2-3
weeks
• Preparation of
Roadmaps
• Distribution to Key
Stakeholders for
review
6
7
Senior Mgmt
Presentation
2 hours
• Presentation to
Senior
Management
Team
8
Final Program
Workshop
Half –
Full day
• Brining together
participating
councils
• Sharing of
roadmaps,
issues and
opportunities
• Identification of
collaboration
opportunities
• Council Project
Team
• Council Project
Team
• Key Council
Stakeholders
• Key Council
Stakeholders
• Key Council
Stakeholders
• GM and Senior
Management
Team
• PMMS Support
• PMMS
• PMMS
• PMMS
• Project Leaders
Roadmap
Implementation
6/12/24 months
• Regular
reviews of
roadmap
progress
• Tracking at
6,12 and 24
monthly
reviews
• All Council
• All Council
Project
Project Teams
Leaders/ Teams • Key Council
Stakeholders
• Key Council
stakeholders
• PMMS
Procurement Roadmap
Phase 1 0-6 months
Direction, Roles and Procedures
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 procureto-pay model
Phase 2 6-12 months
Communication , Training and
Annual Planning
9.
10.
11.
12.
13.
14.
15.
16.
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
8
Phase 3 12-24 months
Supplier Engagement and
Strategic Opportunities
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 Roadmap
Example
High level action
1
Build Roadmap into Council
Strategy/ Action Plan
2
Establish Procurement Steering
Group
3
Finalise procurement processes,
documentation and templates
Detailed description
Responsibility
Target date
VC/KM/CSM
1/11/2011
CSM
1/11/2011
VC/KM
VC/KM
PSG
31/01/2012
31/01/2012
31/01/2012
VC/KM
16/12/2011
VC/KM
31/01/2012
VC/KM
31/01/2012
VC/KM
16/12/2011
CSM
30/11/2011
VC
31/01/2012
CSM
19/11/2011
VC/KM/CSM
30/03/2012
Incorporate Procurement into new Council Induction Program
VC/MG
30/11/2011
Establish Purchase Cards Program
VC/CSM
1/02/2012
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
VC/KM/CSM
1/02/2012
VC/KM/CSM/ CC
31/03/2012
VC/KM/CSM/ CC
30/11/2011
Present to senior management to gain endorsement and establish Roadmap as
on-going Strategy/ Action Plan
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).
Finalise procedures document and associated templates
Develop a Procurement Flowchart including roles and responsibilities
Request final feedback from stakeholders on current processes and templates
Develop Role Statements for key Procurement Roles - eg Procurement Team and
Contract Managers
Ensure procedures include consistent Procurement team involvement in
evaluation
Implement LGP Tender Toolbox (Updated by MIDGOC Procurement Alliance)
Develop Segregation of duties model as part of process documentation to
eliminate potential for the same person to order/approve/pay suppliers
Add Procurement Checklist to Budget Bid Documents/s
4
Incorporate Procurement into key Introduce structured Numbering system for Tenders (lin with new Records
processes - Budget, Records,
requirements)
Corruption Prevention Plan
Link to Procurement Roadmap to Corruption Prevention Plans
Hold a Training Program for the Senior Leadership Team (incl: Team Leaders). Half
5
Introduce Leadership Training and
day on why and how for procurement practice at Taree.
Induction
6
Develop program for introducing
purchase cards
7
Develop business case for
procurement resource
Develop preferred option/s and business case for introducing a Procure-To-Pay
Review application of Finance
System - including review of the Sun e-Procurement module
8 System for data and procure-to-pay
Review Finance and Procurement Structure to explore easy and consistent access
model
to procurement and spend data
Define accounts payable processes and accounctabilities
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 decisionmaking
 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/ eprocurement/ 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
Implementation
Spend Category Matrix
Tier 1
Tier 2
Construction
Building
Civil
Concrete
Electrical
Irrigation
Landscape
Pipelines
Road reseal
Sculpture
Walls
Utilities
Electricity
EPA
Water
Equipment
Hardware
Irrigation
Landscaping
Parks
Parts
Plant Hire
PPE
Pumps
R&M
Fleet
Fuel
Heavy Fleet
light fleet
R&M
Registration
Tyres
Asset Mgt
Building
Carpentry
Cleaning
Electrical
Engineering
Fencing
Hygiene
Landscaping
Linemarking
Locksmith
Maintenance
Painting
Paving
Plumbing
Pools
Signage
Tank cleaning
Waste Mgt
Weedspraying
Professional
Services
Consultancy
Engineering
Environment
Finance
Insurance
Legal
Architect
Training
labour hire
Planning
Materials
Concrete
Construction
Gas
Landscape
Office Supplies
Quarry
Signage
Bins
Pest Control
Operations
Environment
Pool
street cleaning
Street lighting
Waste Collection
Waste Management
Water
ICT
Hardware
Network
Phones
Software
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
Top Tier 1 Spend Categories FY 11-12
represents 76 % of total spend
20
Tier 1 Category FY comparison
Row Labels
Construction
Utilities
Fleet
Equipment
Asset Management
Materials
Professional Services
Operations
ICT
Grand Total
11/12
5,460,606
4,235,290
2,236,354
2,339,989
2,203,450
1,366,201
1,688,202
1,201,219
741,356
21,472,667
11/12
12/13 Grand Total
2,440,934 7,901,540
2,619,020 6,854,310
1,385,400 3,621,754
1,121,347 3,461,336
1,201,240 3,404,690
1,706,942 3,073,143
827,127 2,515,330
1,018,794 2,220,013
415,941 1,157,297
12,736,744 34,209,411
12/13
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0
21
Construction Categories
Row Labels
Road reseal
Irrigation
Civil
Building
Pipelines
Electrical
Sculpture
Landscape
Grand Total
FY 11-12
C2
C3
Berri
Loxton
Renmark
Grand Total
420,678 1,178,826 189,992
1,789,496
1,371,617
33,209
29,937
1,434,764
294,452
793,327
1,087,779
172,350 204,423 279,797
656,570
251,279
251,279
37,167
49,045
86,211
59,227
59,227
50,065
50,065
2,259,097 1,805,958 1,395,551
5,460,606
C1
C1 Berri
C2
Loxton
C3
Renmark
2,000,000
1,800,000
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
22
Category: Construction – Road Reseal FY 11-12
Sum of Spend
Row Labels
BORAL CONSTRUCTION MATERIALS GROUP LTD
MILDURA RURAL CITY COUNCIL
FULTON HOGAN INDUSTRIES PTY LTD
DOWNER EDI WORKS PTY LTD
TOPCOAT ASPHALT CONTRACTOR
Grand Total
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
Column Labels
C2
C3
Berri C1
Loxton
Renmark
Grand Total
54,088 914,073
968,161
196,746
165,500
362,245
264,753 19,096
283,849
112,517
112,517
57,327
5,396
62,724
420,678 1,178,826 189,992 1,789,496
Renmark
Loxton
Berri
23
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

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