ArcBlue Consulting @PMMSgroup It’s Time for Procurement Chris Newman Director ArcBlue Consulting [email protected] 0412 318

ArcBlue Consulting www.arcblue.com.au @PMMSgroup

It’s Time for Procurement

Chris NewmanDirector ArcBlue [email protected] 318 384

The Global Procurement Network

© ArcBlue Consulting 2

QLD State Government• Contract Management Assessment and

training program • Social Procurement Development

VIC State Government• Training Programs• Review and Certification

Programs

VIC Local Government• LEAP Spend Analysis and Procurement Development• Contract Management Guidelines and Development• Training• Social Procurement Programs

NZ Government • Agency

assessment• Spend Analysis

NSW State Government• Accreditation process with 7

Departments• Procurement Project delivery• Capability Model Development

State Government

Local Government

SA Local Government• Roadmap Program• Regional Opportunity

Analysis Programs

Procurement Capability Assessment / Development

Federal Government• Contract Management

Training Federal Government

Queensland Local Government• Local Buy Training• Spend Analysis Pilot• Gold Coast Contract

Management Training and Capability Development

WA Local Government• Procurement and Contract

Management training • Procurement Handbook

Development• Spend Analysis

SA State Government• Savings Programs• New Royal Adelaide

Hospital Procurment

NSW Local Government• Procurement Development Program

across 30+ councils • Procurement Leadership Program• Regional Development Programs• Social Procurement Guidelines

Our public sector experience



Contents

Implications of rate-cappingWhy procurement - what is the data

telling us?How can strategic procurement be

part of the solution?



Implications of rate-capping

A burning platform for the next stage of professionalisation or

A handbrake on sector capacity and development

Opportunities for innovationWhat does it mean for regional and

sector collaboration



Operating in a commercial world

Delivering and Demonstrating savings, value and productivity improvements

Data-based decision-makingTaking a structured approachBuilding the right skills and capacityBalancing commercial and

community



Procurement Trends and Insights

MAV LEAP Program



LEAP Background A continuous improvement program designed to

assist councils, regions and the sector to:

– Achieve sustainable savings and value for money– Support local and regional economic development

Identify and pursue shared services opportunities– Improve probity management and compliance– Improve organisational and sector capability

23 councils currently participating in LEAP Data insights are based on first 15 councils



>24,600 Active suppliers in single

year

$1,300 million

spent across 15 metropolitan councils in FY15

~467,000Individual transactions (invoices) processed

LEAP Program Statistics

45 – 65% of total council spend



17% - 37%of spend in the local (Council) area.

40% - 60%of Councils spend is with top 20 suppliers

Spend

quarter 4opex and capex spend spikes in key categories

suggesting rushed end of budget cycle spend.

~$52,000average spend per supplier, predominantly below

tender threshold



350,000 75%

of transactions <$1,000 value

Efficiency

$2,875average value per

transaction

$25 million

spent processing

transactions with value of <$1,000

28% of all suppliers

were used only once during the financial

year, ~7,000 single use suppliers

Up to $73 Per transaction cost

of traditional PO process



Low-value Procurement White Paper



Low-value Procurement White Paper



Capability and Maturity



Procurement in Local Government

State

Local



Case Study: Barossa Regional Procurement Development ProgramObjectives & Process

Program Objectives: Make sustainable savings & create efficiencies Stimulate economic development Improve probity and reduce risk Build staff and organisational capability in procurement Strengthen regional collaboration

Joint Council Kick-off

Data Collectio

n

Individual

Council Worksho

ps

Detailed Joint

Spend Analysis

Opportunity

Analysis Worksho

p

Regional Roadma

p Develop-ment and

Validation

Final Roadma

p Worksho

p

Progress Reviews

and Support



Barossa Regional Procurement Program

16

Regional Collaborative Procurement Program – Start May 2014

Regional Governance MOU in place – October 2014 Regional Resource engaged – February 2015 Collaborative Projects

• Standardisation of process and documents • Development of regional procurement website

Agreed priority regional contracts delivered since February:• Regional Building Maintenance/ Trade Services Panel • Audit Services• Road Re-Seal Program• Stationery• Line Marking

Savings to date $800,000 – Target $2.5m/ year (5%) Increased regional spend and internal efficiencies





Barossa Region – Next Steps

18

Expanding model to shared services investigations Correlating spend data against service, output and

demographic data Using opportunity analysis to structure and

prioritise opportunities



Strategic Procurement

Procurement represents our most tangible area to deliver and demonstrate savings:• External and internal efficiencies• Continuing to move from administrative to strategic

Structured programs• Targets and measurement• Commercial focus• Building capability – council, region, sector• Demonstrating ‘value’ while maintaining our

commitment to community

Documents

ArcBlue Consulting @PMMSgroup It’s Time for Procurement Chris Newman Director ArcBlue Consulting [email protected] 0412 318