Materials Management at TubeLines Limited on the London Underground
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1 Phill Dagnall
2 Materials Management at TubeLines Limited on the London Underground Supply Chain Relationship Management for the Rail Safety Standards Board (RSSB) UK Group Procurement and Contracts Reporting Evaluation Analysis Management (CREAM) for UnitingCare Queensland
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4 2003 Transport for London (TfL) outsourced infrastructure management of the London Underground (LU) into two separate 30 year PPP s with private consortia TubeLines managed 3 lines consisting of: Piccadilly Connecting Heathrow Airport and London City; Northern - traversed London from north to south; Jubilee - traversed east to west servicing Wembley Stadium, Canary Wharf, the O2, Excel Conv. Cntr. & Stratford
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6 In 2009 TubeLines went into receivership due to a funding shortfall of 1¾Bn The PPP s as they where are no longer in place as all maintenance is now managed back in-house by TfL
7 Not a railway operating company International consortia Bechtel, Ferrovial and Amey ran like an American organisation lean and mean! Just In Time (JIT) Just Wasn t Working!
8 Developing a new Process Understanding the supplier landscape Getting buy-in from relevant stakeholders Planning the Plan Identify contracted suppliers and determine of what could be bought in bulk Enhance and develop current supply relationships
9 Acquiring a Site Systems Analysis and Design Integration requirements Build or buy? Will the system manage contracts, suppliers and / or materials? Opportunity to Consolidate and Improve Supplier Selection = Better Buying Power
10 Cost savings approx. 20% in 6 months Improved Stock Control Cost effective solution that didn t break the bank Improved Procurement Performance through systems alignment and effective system utilisation Implementation of Framework and Trading Agreements with suppliers
11 RSSB builds railway industry-wide consensus and facilitates the resolution of difficult cross-industry issues. Providing knowledge, analysis, a substantial level of technical expertise, powerful information and risk management tools.
12 RSSB s unique selling point is that it represents an efficient and cost-effective means for the rail industry to research, develop and problem solve. These core capabilities cut across the whole data-to-decision making cycle providing a range of tools that support more than one aspect of the process.
13 Services specific research program s dictate the level of work undertaken by RSSB such as: Safety Management System Programme s Sustainable Rail Programme s Community Safety Programme s Operational Safety Programme s
14 The R&D department carried 70% of the organisations 3 rd part expenditure across 3 core portfolio's: Engineering Management Operations Necessity to build and maintain close relationships across functions, especially between Supply Chain and R&D Supplier Relationship Management was key to improving the management of procurement and implement and set the foundation of Client Relationship Management.
15 A means of obtaining best return on investment within the supply lifecycle High Critical / Bottleneck Increased supplier manages rather than be managed Little or no option to Bring in house Tight Performance Routine / Transactional Low level spend Non- critical goods or services Manage at arm s length Strategic Goods and Services directly linked to success Unique and highly specialised Able to enhance and develop future opportunities Leverage Very Competitive, Non-strategic Single / Sole Source Champion Low High
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17 Enterprise-wide assessment of suppliers capabilities with respect to overall business strategy. Determination of what activities to engage in with different suppliers, and planning and execution of all interactions with suppliers, to maximise value. Develop two-way, mutually beneficial relationships with strategic supply partners to deliver greater levels of innovation and competitive advantage.
18 Builds mutual dependency If both side benefit, there is the expectation that the relationship will be long lasting. Reduces risk Less risk built up through the relationship management each party wants to keep the other happy Clear Understanding of supplier contractual management, taking into account: legal, ethical and financial matters Improves essential contracting capabilities, including contractual approvals and contract management Effective compensation event management in dispute and conflict resolution Effective contract conformance, performance and quality monitoring
19 Group Procurement contributes to the strategic objective of financial sustainability for UnitingCare Qld. Driving value and savings Providing a source of best practice in procurement Exploring and innovating better ways to manage 3 rd party spend Working closely with Service Groups to realise benefit Manage holistically supplier contracts and performance Implement policies and systems to increase efficiencies and reduce costs
20 When first established, the team was located across various locations and operated as a virtual team Co-location was undertaken in September 2012 Recruitment process of key team members
21 The department manages $270M per annum of 3 rd party spend The initial focus of the department has been to ensure that the function delivered on the business as usual requirements A significant focus has been on building relationships with key stakeholders to ensure a clear understanding of client requirements.
22 Establishment of key document templates for use Establishment of contract precedents for use Establishment of the Procurement Advisory Group, Establishment of other category stakeholder Advisory Groups Draft policies related to Group Procurement and implemented on interim level to ensure fit for purpose
23 Spend Contract activities Tender / Proposal Executive Reporting Savings Fleet Management Catalogue Management Sustainability
24 Realisation very early of budget and resource capacity How does knowledge help? What could be done to obtain better knowledge Contracts Reporting, Evaluation, Analysis and Management (CREAM)
25 Need to systematically and efficiently implement an effective way to manage contract / contractor compliance records, including: Tender development and management Contract creation, Execution and analysis for the purpose of maximising financial benefit Operational performance and minimisation of risk.
26 CREAM was designed for the main purpose to provide UCQ Group Procurement visibility over UnitingCare Queensland s contractor and contractual activities: Who was in contract What was being contracted When was the contract in place and when will it expire Why was the contract in place
27 All contracts where to be developed executed and managed by Group Procurement. This included: All current local and state-wide contracts for Service Groups All New Contracts across all categories for Group Procurement including: Medical (capital equipment, tools and implements, disposables) Hospitality (food and beverage, laundry) Transport and Fleet ICT and Records Management Security to restrict access to confidential information Reporting functionality Opportunity to maximise contractor activity to organisational benefit
28 CREAM became the organisational Contracts Data Warehouse: Bed-down key functions to enable understanding of what the data actually is and what it does Providing enhanced business intelligence (knowledge) Time saving on data management Enhanced quality and reliability of data Generated ROI Foundation for P2P
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31 Fully understand where will there be benefit (business, user or functional) Build systems, policy and processes together, aligned to core business requirements for contractor and supplier management Align with key stakeholders at the earliest Communicate, communicate, communicate Data is key, information is integral and knowledge is valuable
32 Questions
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