What is Smart procurement? Is it the use of the latest digital technology in procurement? Is it great systems, processes, category management? Or is it simply ensuring your Chief Executive gets a decent night's sleep. The meaning of Smart Procurement is explored and what it means in practice.

1. • COLIN M CRAM FCIPS
• Marc1 Ltd
• Tel: 01457 239894
• Mob: 0752541 49611
• Colin.cram@marc1ltd.com
SMART PROCUREMENT
HOW TO ENSURE YOUR CEO GETS A GOOD
NIGHT’S SLEEP

2. eProcurement?
Social Media?
Superb IT system?
Contract Ts and Cs
Smart Procedures?
WHAT IS SMART PROCUREMENT?

3. Saving
Quality service
Social value
Consolidation, supplier
Managing risk
Local employment
Partnering
Compliance
Engaging with stakeholders
WHAT ARE YOUR PROCUREMENT OBJECTIVES?

4. Provide social housing
Well managed
Surplus or profit
Sustainable community
Improve life skills and opportunities
Efficiency
Local offer
Partnership
Manage and control of income
WHAT ARE YOUR BUSINESSES’ CORPORATE
OBJECTIVES?

5. 1. Settle at Home
2. Provide Customers with Live Well Services2
3. Active Asset Management
4. Growth: Development of High Quality Homes
5. Sustainable Business, providing vfm to customers
6. Maximising profitability to free up resources for investment in Strategic Objectives
CORPORATE OBJECTIVES OF
SOUTH YORKSHIRE HOUSING ASSOCIATION

6. Budget savings
Specifications
Services
Identify opportunities
Financial risks
Downgraded- compliance breach
Policy changes
Quality of work
Delivering projects on time
Loss of independence – takeover
Winning bids against competition
Profitability
Satisfied customers
WHAT KEEPS YOUR CHIEF EXECUTIVE AWAKE?

9. POSSIBLY AS FOLLOWS, BUT HAVE YOU ASKED?
1. Loss of Independence/Takeover
2. Major Projects – Time
3. Major Projects within Budget
4. Winning Bids against Competition from other Housing Associations
5. Profitability
6. Satisfied Customers
© C M Cram FCIPS
WHAT KEEPS YOUR CHIEF EXECUTIVE AWAKE?

10. Ensuring your
CX Sleeps
Well
Procurement
Objectives
Enablers
Underpins
© C M Cram FCIPS
SMART PROCUREMENT

11. Your Procurement Objectives?
Support Delivery of Major Programmes of Work
Support Competition Beating VFM
Market Management
Consistent and Quality Specs
Quality Contracts that Deliver what is Required
Reputation for Fairness to Suppliers
Responsive and Quality Service to Internal and External Customers, with Products when Needed
Probity and Transparency
Social Objectives
Reputation
Legal
© C M Cram FCIPS

12. Procurement Enablers?
Clear specs
Spend
Strategy
Procedures & processes
Contract register to plan ahead
Stakeholders
Advanced procurement techniques
Negotiation, leverage – savings
Market intelligence
Good supplier base
© C M Cram FCIPS

13. Procurement Enablers?
Advanced Procurement Techniques
Negotiation, Leverage - Savings
Specialist Expertise
Product Standardisation
Market Intelligence
Market Management
High Quality Contracting
High Quality Contracts Management
Good Supplier Base
Good and Consistent Supplier Management
First Class Category Management
Good and Practical Systems
First Class and Consistent Common Procedures/Processes
Comprehensive Understanding of Procurement Spend
First Class Performance Indicators
Consistent Legal Interpretations

14. Capable Procurement Organisation
Sustainable Procurement Organisation
Trusted Procurement Organisation
Good Quality Systems
Management Information
© C M Cram FCIPS
UNDERPINNED BY

15. SMART PROCUREMENT ORGANISATION CHARACTERISTICS
• Authority
• Capable
• Independent
• Reputation and respect
• High morale
• Objectives in-line with those of the company
© C M Cram FCIPS

16. SMART PROCUREMENT ORGANISATION CHARACTERISTICS
• Authority
• Capable
• Independent
• Reputation and Respect: Within the company and with markets and suppliers
• High Morale – Self Belief, Mutually Supportive, High Expectations
• Objectives in Line with those of the Company
• Performance Management
• Quality, Practical Systems
• Comprehensive Understanding of Procurement Spend
• Market Intelligence
• Involvement in Key Commercial Decisions
© C M Cram FCIPS

17. SMART PROCUREMENT ORGANISATION: CAPABILITY
• Critical mass
• Sufficiently resourced
• Sustainable
• Knowledge transfer
© C M Cram FCIPS

18. SMART PROCUREMENT ORGANISATION: CAPABILITY
• Critical Mass
– Sufficiently Resourced
– Sustainable
– Knowledge transfer
– Learning Environment
• Expertise
– Category
– Markets and Competitors
– Contracting
– Contract Management
– Procurement
– Projects and Project Management
– First Class Procurement Techniques:
• Taking Cost out of Supply Chain
• Value Analysis
• Market Management
• E-auctions
• Other up to date techniques e.g. ‘twitter’ © C M Cram FCIPS

19. • 1700 Registered Housing Associations
• Combined Purchase Spend of £13billion
• Collaboration/Maximising Joint Purchasing Power is Weak – e.g.
Procurement for Housing, just over 1% of market
• Cost to build: £150,000
• Cost to build for private sector, £90,000
• Underperforming? 46,000 affordable homes in 2014/15
© C M Cram FCIPS
HOW DOES THE HOUSING ASSOCIATION
BUSINESS SHAPE UP?

20. Procurement Objectives Devolved Limited
Category
Collab
Comprehens
ive Category
Collaboration
Integrated
Regional
Joint Proc/
Contracting
Integrated National
Joint Procurement and
Contracting
Support Delivery of Major Programmes of Work
Support Competition Beating VFM
Market Management
Consistent and Quality Specs
Quality Contracts that Deliver what is Required
Reputation for Fairness to Suppliers
Responsive and Quality Service to Internal and
External Customers, with Products when
Needed
Probity and Transparency
Social Objectives
Reputation
Legal
TOTAL
© C M Cram FCIPS

21. Procurement Enablers Devolved Limited
Category
Collab
Comprehensive
Category Collab
Integrated Regional
Joint Proc/Contract
Integrated National
Joint Procurement and
Contracting
Advanced Procurement Techniques
Negotiation/Leverage Savings
Specialist Expertise
Product Standardisation
Market Intelligence
Market Management
High Quality Contracting
High Quality Contracts Management
Good Supplier Base
Good and Consistent Supplier Management
First Class Category Management
Good and Practical Systems
First Class and Consistent Common Procedures/Processes
Comprehensive Understanding of Procurement Spend
First Class Performance Indicators
Consistent Legal Interpretations
TOTAL © C M Cram FCIPS

22. MANY THANKS
GREAT TO MEET YOU
VERY BEST WISHES FOR THE FUTURE
Colin M Cram FCIPS
Tel: +44(0)1457 239894
Mob: +44(0)075251 49611
colin.cram@marc1ltd.com
www.marc1ltd.com