100326 Procurement Landscape In Public Sector 2010


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The 2010 local government procurement landscape; a view

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100326 Procurement Landscape In Public Sector 2010

  1. 1. The public procurement landscape in 2010: a view Dr Gordon Murray 26 March 2010
  2. 2. A view <ul><li>Commissioning/procurement/purchasing </li></ul><ul><li>Co-production </li></ul><ul><li>Recession response </li></ul><ul><li>Innovation & innovative procurement </li></ul><ul><li>Procurement as a shared services </li></ul><ul><li>Category management </li></ul><ul><li>Strategic eProcurement </li></ul><ul><li>Personalisation </li></ul><ul><li>Sustainable procurement </li></ul>
  3. 3. The commissioning cycle Strategic needs assessment Decide priorities and outcomes Plan and design services Optional appraisal Sourcing Delivery Monitor and review The commissioning cycle
  4. 4. Strategic needs assessment Decide priorities and outcomes Plan and design services Optional appraisal Sourcing Delivery Monitor and review Determine the need Supplier selection Contracting Ordering Expediting Follow-up/ evaluation The commissioning cycle The purchasing cycle procurement
  5. 5. Implications for procurement professionals <ul><li>New roles </li></ul><ul><li>Commissioners will have demands for support & advice </li></ul><ul><ul><li>Funding strategy </li></ul></ul><ul><ul><li>Understanding co-production </li></ul></ul><ul><ul><li>Honouring the commitments of the Compact & Concordat </li></ul></ul><ul><ul><li>Removing the barriers </li></ul></ul><ul><ul><li>Engagement with the market </li></ul></ul><ul><ul><li>Interpreting the legislation </li></ul></ul><ul><ul><li>… </li></ul></ul>
  6. 6. The recession <ul><li>Probably the worst recession in >100 years </li></ul><ul><li>Four times larger in terms of GDP than ‘Great Depression’ </li></ul><ul><li>Longest decline in manufacturing output since ONS records began in 1955 </li></ul><ul><li>More recessions in last 35 years than the previous 350 years </li></ul><ul><li>5% of council ‘strategic/critical suppliers ‘at risk’ </li></ul>
  7. 7. Critique of current strategy <ul><li>Public procurement strategy has changed little to reflect the current recession and may actually be dysfunctional </li></ul><ul><ul><li>What’s this tell us about ‘strategic procurement’? </li></ul></ul><ul><li>Need to rethink approach to ‘environmental scanning’ </li></ul><ul><li>Need to review procurement strategy </li></ul><ul><ul><li>Short v long term </li></ul></ul><ul><ul><li>Cost reduction v achieving community benefits </li></ul></ul><ul><ul><li>Risk profile of suppliers </li></ul></ul>
  8. 8. 10 short-term steps to accelerate viable economic recovery <ul><li>Democratic leadership and ownership </li></ul><ul><li>Link with economic development strategy </li></ul><ul><li>Proactively open opportunities, incl. new suppliers </li></ul><ul><li>Short-term contracts </li></ul><ul><li>Multi sourcing making use of ‘lots’ </li></ul><ul><li>Encourage innovation </li></ul><ul><li>Make use of social clauses </li></ul><ul><li>Pay within 4 days using p-cards or </li></ul><ul><li>Pay on delivery </li></ul><ul><li>Provide security of business through forward standing orders </li></ul>
  9. 9. Innovation & innovative procurement <ul><li>Strategic objective </li></ul><ul><li>Focus on outcomes </li></ul><ul><li>Cross-functional teams </li></ul><ul><li>Strategic linkage </li></ul><ul><ul><li>Cost reduction </li></ul></ul><ul><ul><li>Sustainable procurement </li></ul></ul><ul><ul><li>Economic development </li></ul></ul><ul><li>Recognise the market as an asset </li></ul><ul><li>Performance manage </li></ul><ul><li>Read ‘Innovation Nation’ </li></ul>
  10. 10. Procurement as a shared service <ul><li>Shared services procurement needs to be included within consideration of structural models </li></ul><ul><li>What about shared services across public sector bodies? </li></ul><ul><li>How robust is the options appraisal process? </li></ul><ul><li>Do operational shared services procurement lead to strategic procurement shared services? </li></ul><ul><li>To what extent does political procurement curtail decisions? </li></ul><ul><li>To what extent do shared services constrain political procurement? </li></ul><ul><li>Shared Procurement Strategy? </li></ul><ul><li>Shared eProcurement strategy? </li></ul><ul><li>… </li></ul>
  11. 11. Category management <ul><li>Professionalism v protectionism </li></ul><ul><li>National/Regional/Local </li></ul><ul><li>Have the answers which members are being encouraged to ask through ‘IDeA Member guides’ </li></ul><ul><li>eProcurement is part of the solution </li></ul>
  12. 12. Strategic eProcurement <ul><li>The business case </li></ul><ul><li>The eProcurement strategy </li></ul><ul><li>P2P seamless transaction cost reduction </li></ul><ul><li>Ownership and roll-out across categories </li></ul><ul><li>Strategic information management </li></ul><ul><li>Category management </li></ul>
  13. 13. Sustainable Procurement <ul><li>Member & Chief Officer commitment </li></ul><ul><li>Relationship with Sustainable Community Plan and ‘Procuring the Future’ </li></ul><ul><li>Linkage with </li></ul><ul><ul><li>Strategic procurement management </li></ul></ul><ul><ul><li>Cost reduction strategy </li></ul></ul><ul><ul><li>Local economic development strategy </li></ul></ul><ul><ul><li>Climate change strategy </li></ul></ul><ul><ul><li>Category management strategy </li></ul></ul><ul><li>Clear message to be communicated to the market and staff </li></ul><ul><li>Commitment to act throughout the procurement cycle </li></ul><ul><li>Commitment to on-going improvement </li></ul><ul><li>Plans for reviewing effectiveness </li></ul>
  14. 15. Efficiency Exchange
  15. 16. Imagine a tool for … <ul><li>collaborative knowledge sharing </li></ul><ul><ul><li>what works and doesn’t work, but will in certain circumstances </li></ul></ul><ul><li>collaborative problem solving </li></ul><ul><ul><li>helping find the one person who’s thinking about the same challenge </li></ul></ul><ul><ul><li>or has a suggestion which could help </li></ul></ul><ul><ul><li>or enabling suggestions which could help someone else </li></ul></ul><ul><li>drawing on local government expertise in </li></ul><ul><ul><li>Drafting a policy, specification, contract ... </li></ul></ul><ul><li>mass on-line conferences, debates and ability to question experts </li></ul><ul><li>Comparative benchmarking on efficiency </li></ul><ul><li>… </li></ul>
  16. 17. <ul><li>You follow the link to: </li></ul><ul><li>http:// www.communities.idea.gov.uk/comm/land ng-home.do?id =436525 </li></ul><ul><li>And register, it takes five minutes! </li></ul>What to do if you want to join?
  17. 18. The public procurement landscape in 2010: a view We lead in exciting times [email_address] www.slideshare.net/DrGordonMurray