SA Roads and Works Conference

Transcription

1 SA Roads and Works Conference - The Power of Procurement Rob Ackland CEO, LGA Procurement

2 About LGA Procurement MISSION To provide superior outcomes to Councils through professionally managed procurement solutions which manage risk and save Local Government time, resources and costs.

3 What do we do? Act as a procurement aggregator to increase the purchasing power of Councils by reducing the significant costs and risks of tendering and contracting Offer preferred supply panels from which Councils can purchase, to any value, without tendering Provide high quality procurement and contract management services to meet specific Council needs/projects Support collaborative procurement strategies within and across regions Promote the development of sector wide procurement capability

4 Ask any business leader What is your highest priority? Most likely they will say cost management. Organisations are slowly understanding that sustainable savings can come from their supply chain Historically many procurement functions are seen as an add-on to sort out the contract and price then hand it back to the business to get on with the job Procurement is increasingly getting engaged across the whole business in strategic discussions on how spend can be optimised to deliver the greatest efficiency dividends

5 So what is mature procurement? Whilst procurement will always have a risk and cost management focus the opportunity exists for it to add value in more strategic ways. Best practice procurement steps up to the challenge by increasingly taking a leadership role in helping to drive growth and reduce costs across their organisation(s).

6 Five key areas for procurement 1. Partnering and being involved much earlier in procurement decision making 2. Moving from cost savings to category management, supplier risk management and forward procurement planning 3. Achieving the optimal procurement model for the organisation. Central vs Centre Led

7 Five key areas for procurement 4. Prioritising supply chain risk, where appropriate, to protect business from supplier failure 5. Leveraging systems and technology to automate low risk, high frequency spend and move into category management and strategic procurement

8 Procurement Development Activity across Australia/NZ QLD State Government QGCPO change program WA Local Government Capability Development SA Local Government Roadmap Program Regional Opportunity Analysis VIC State Government CIPSA Certification Procurement Capability Assessment / Development Gold Coast Council Capability Development and Contract Management 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 State Government Local Government Federal Government Contract Management Development VIC Local Government Procurement Excellence Program Contract Management Guidelines and Training NZ Government Agency assessment

9 Local Government Procurement Savings Programs NSW Government - Program Save $1bn in savings over 4 years Gold Coast City Council $9.46m for 2012/13) in bankable savings due to Council implementing strategic procurement techniques Council Efficiency Programs (often linked to Lean Programs) SA, Victoria, NSW Regional Efficiency Programs NSW Southern Councils Group SA Riverland Project Joint Procurement tracked Savings Central Highlands Road Resealing Program - $3m over 5 years

10 Procurement Roadmap Program In partnership with ArcBlue

11 Why the focus on procurement? The benefits o reduce internal and external costs o Build confidence and demonstrate professionalism o Projects o Sustainability o Regional/local economic development o Capital works and budget planning o Project management and delivery o Regional and Sector Collaboration

12 Levels of procurement maturity Largely unco ordinated procurement with gaps in compliance Transactional Order placement Level 1 Procurement foundations in place with improved controls Some functional and category strategies in place Professional Level procurement 2 Basic Level Influencing 3 the business Developing Centre of Excellence across all expenditure Level 4 Advanced Emergent PMMS Consulting Group Focus on meeting legislative requirements

13 Spend analysis is used to identify procurement opportunities 13

14 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

15 Case Studies Riverland (SA) 15

16 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 16

17 Spend Category Matrix Tier 2 Tier 1 Construction Utilities Equipment Fleet Asset Mgt Professional Services Materials Operations ICT Building Electricity Hardware Fuel Building Consultancy Concrete Environment Hardware Civil EPA Irrigation Heavy Fleet Carpentry Engineering Construction Pool Network Concrete Water Landscaping light fleet Cleaning Environment Gas street cleaning Phones Electrical Parks R&M Electrical Finance Landscape Street lighting Software Irrigation 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

18 Top Tier 1 Spend Categories represents 76 % of total spend 18

19 Opportunity Analysis Individual review and analysis Roadmap for each Council Regional Opportunity Analysis Analysis of spend and practice by Category Identification of local and regional savings and benefit opportunities Spend analysis Benchmarking Market analysis Scoping of key projects Estimated benefits Project Delivery process Resources required Recommended priorities

20 Regional development/spend LGAP will support collaborative procurement strategies within and across regions Developing regional economies Balancing cost and risk using common tendering and contracting practices Reducing costs to suppliers and Councils through collaboration Forward procurement planning to identify longer term opportunities

21 Success stories

22 LG Engineering Focus Victorian Regional Infrastructure Design Manual 18 regional Councils using consistent civil design standards Sustained regional collaboration and governance Vic Growth Area Engineering Standards Project Streamlining costs and processes for infrastructure and new housing development Contract Management Development Program Identify opportunities and manage risks Procurement Roadmap Programs Supporting whole-of-council improvement in probity and practice

23 Summary Procurement can play a significant role in business improvement, risk control and cost management Collaboration offers many opportunities to better leverage spend The Roadmap program offers you a cost effective opportunity to continue your journey Contact LGAP or visit our stand for more information

24 Summary Procurement can play a significant role in business improvement, risk control and cost management Collaboration offers many opportunities to better leverage spend The Roadmap program offers you a cost effective opportunity to continue your journey Contact LGAP or visit our stand for more information

25 Andrew Forrest CIPS Top 100 Procurement Professionals Conference Andrew made the point that he considered his chief procurement officer to have the most important role in his organisation more important than the chief financial controller and even more important than the chairperson. He went on to say that if any organisation in any industry, including the public service, wants to be best practice, then they will never make it until their procurement function is acknowledged as the most important function within their organisation.

26 Thank you for the opportunity to share some thoughts on the power of procurement. Please feel free to visit us on the stand for more information on how we can assist your specific needs