Beruflich Dokumente
Kultur Dokumente
College Procurement *
(* and everyone else in the UK)
Peter Smith
psmith@procurementexcellence.com
Tel 01276 691770
April 2010
ProcurementExcellence
Peter Smith
ProcurementExcellence
Peter Smith
http://blog.procurementexcellence.com/
News, views and opinions from the world of
procurement and supply chain
Lots of public sector stuff including The Perfect
Storm; our view of the future of public
procurement
Also the monthly
album review!
ProcurementExcellence
April 2010
April 2010
ProcurementExcellence
ProcurementExcellence
History of efficiency in
Government
Gershon 2004 Efficiency Review
CSR 07
Operational Efficiency Programme
April 2010
ProcurementExcellence
History of efficiency in
Government
Operational Efficiency Programme
April 2010
ProcurementExcellence
History of efficiency in
Government
Operational Efficiency Programme
April 2010
ProcurementExcellence
History of efficiency in
Government
Government makes huge claims for savings:
Building on the SR04 Efficiency Programme, which
successfully delivered over 26.5 billion in savings,
and on plans to deliver another 35 billion in
savings as part of the CSR07 value for money
programme. etc.
The NAO says:
25% of savings are real
50% some doubt
25% not real
April 2010
ProcurementExcellence
History of efficiency in
Government
But up to now...it hasnt really mattered.
If real efficiencies were made, great;
organisations could re-invest those
savings
If they werent made, or weren't real, the
organisation still had enough funding to
do what was planned anyway
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JUNE 2007
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Economic position
tilt
ld
u
o
'c
t
n
e
Hung parliamreek-style
G
Britain into
rmoil'
u
t
l
a
i
c
n
a
n
fi
The
intro new go
grea duce d vernme
eep
n
ter t
ax h er sp t must
end
ikes
ing
cuts
a c ut o
and
1
g
t
n
x
i
inner
e
will be o
w
n
ro
r
u t of p ow
o
b
lic
er for
a genera
b
u
p
tion
April 2010
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ProcurementExcellence
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The solution
The only way in which the required savings can
be delivered will be through relentless attention
to the whole spend management process.
....public procurement should re-focus on this
wider picture, and re-brand public procurement
as spend management. That will require effort
in promoting proactive demand management to
cut off spend at source; in rationalisation of
specifications; in aggressive and commercial
contracting; and in skilful and value driven
contract and supplier management.
(The Perfect Storm White Paper, Procurement Excellence 2010)
April 2010
ProcurementExcellence
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Saving money
5 ways to save
money
DEMAND MANAGEMENT
SPECIFICATION MANAGEMENT
MARKET MANAGEMENT
COMMERCIAL MAMNAGEMENT
TRANSACTIONAL MANAGEMENT
April 2010
ProcurementExcellence
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Demand management
Buy less
Reduce or eliminate the need for the
goods or services
Travel
video conference
IT life-cycle
Control professional services, contractors
Monitor consumables usage
April 2010
ProcurementExcellence
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Specification management
Buy a cheaper or more appropriate
specification of product of service at
lower cost
Down-spec on IT or other equipment
Reduce frequency of cleaning,
maintenance
Look hard at travel and other policies
No frills approach to everything
April 2010
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Market management
Change supplier to one who can offer a
lower price for equivalent goods or
services
Understand the market
Consider collaborative options
Do include the cost of change in your
assessment
April 2010
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Commercial management
Negotiate a better deal from current
suppliers
That may mean them reducing their
margin or coming up with ways to
reduce their own cost base
Not always easy in the public sector
April 2010
ProcurementExcellence
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Transactional management
Reduce the cost of the overall transaction
Elements of cost lie in letting the contract,
ordering, invoicing and payment,
management of the relationship....
Consider use of GPC, electronic catalogues
Collaboration helps here
April 2010
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WARNING
Collaboration, developing huge
procurement organisations, or even more
use of current collaborative ventures will
not IN ITSELF lead to cost reduction
You should look hard at collaborative
options but remember that you can buy
very expensive things and lots of them
from consortia!
You have to do stuff in your organisations
to make cost reduction happen
April 2010
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And remember....
Every pound you save helps towards
maintaining another public sector job
and sustaining strong public services
So...consider yourselves SPEND
MANAGERS
And good hunting!
April 2010
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Thank you
Peter Smith
psmith@procurementexcellence.com
Tel 01276 691770
April 2010
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