Procurement Presentation

Transcription

1 Procrement Presentation Charge: Review options for redcing cost and increasing prchasing leverage via consolidation at one camps. Goal: Redce administrative cost by 20%. Implement continos process improvement in order to redce costs on an ongoing basis. Agst 17, 2016 Team Members Deb Misra John Hebard Stacey Lcason Mary Beth Cangello-Overtrf Moniqe Msick Jim Lynch Kari Brrell Jenny Campbell 2 1

2 Key Stakeholders Vendors End Users (Board of Regents to Stdents) Procrement Staff Unit Prchasers (PTs and/or Pro Card Users) 3 Options 1 Centralized office (UAF) with second office (UAA) and se of Procrement Field Technicians 2 Fll Centralization 3 Enhance Stats Qo with Procrement Concil and Dedicated Chief Procrement Officer 4 Maintain Stats Qo (baseline) 4 2

3 Frther Analysis Needed What physical location(s) is most effective for a central procrement strctre for fll Centralization (Option 2)? Define reporting strctre and level of atonomy (single or matrix reporting) for fll Centralization (Option 2). How do yo operationalize the Procrement Concil (who is on it? How do yo inclde and collaborate with niversity leadership) (Option 3)? How the Chief Procrement Officer position will be strctred (Option 3)? 5 Option 1 Centralized office (UAF) with second office (UAA) and se of Procrement Field Technicians A central procrement office with a second semi-atonomos procrement office. All MAUs (major academic nits pls statewide) will be poplated with procrement field technicians with limited athority. Offices maintain their own bdgets, camps reporting strctres, and staff management and work assignment responsibilities. Central office will contine to assme the major procrement dties for UAS and Statewide, and will take on standardization and strategic responsibilities. Implementation timeline: Anticipate at least one year to flly implement with another year before savings become apparent. CPO dties can be moved immediately. 6 3

4 Centralized office (UAF) with second office (UAA) and se of PFTs - Key Change Elements Development of system-wide strategic sorcing goals, and standardization of procrement forms and practices, pdate of procrement policies and manal. Procrement technicians at all camps locations. Investigate E-Procrement system. Dedicated Chief Procrement Officer 7 Pros and Cons of Option 1 Pros Cons Best combination of taking advantage of specialization, consolidation, economies of scale, and responsiveness to ser commnity. May not achieve the goals for immediate cost savings. Increased collaboration between camps procrement offices. Consistent se of Procrement Field Technicians. Creates less disrption for sers. 8 4

5 Option 2 Fll Centralization A central procrement strctre encompassing system wide procrement activities with centralized ProCards administration. Implementation timeline: Anticipate at least two years to flly implement with another year before savings become apparent. CPO dties can be moved immediately. One year to train procrement field technicians, and two years for staff realignment. 9 Fll Centralization - Key Change Elements Development of system-wide strategic sorcing goals, and standardization of procrement forms and practices, pdate of procrement policies and manal. Centralized contracting and solicitation processes. Procrement technicians at all camps locations. Investigate E-Procrement system. Dedicated Chief Procrement Officer. Single or matrix reporting strctre (frther analysis needed). 10 5

6 Pros and Cons of Option 2 Pros Cons Potential for simplified management of continos process improvement. Cross coverage training cold be provided to eliminate a single sorce of failre. Largest potential to lose trained people. Procrement processes may be impacted de to lack of familiarity with physical and operational niqeness. Most difficlt and time consming to implement sccessflly. 11 Option 3 Enhance Stats Qo with Procrement Concil and Dedicated Chief Procrement Officer Procrement offices at each camps with a procrement concil created for the prpose of establishing priorities, seeking process improvement, and inflencing cltral changes. 12 6

7 Option 4 Maintain Stats Qo (baseline) Atonomos procrement offices at each camps (UAF/UAA/UAS) with Chief Procrement Officer at Statewide. CPO dties are a small portion of Associate Vice President for Finance s fll time responsibilities. Levels and processes of decentralization vary from camps to camps (i.e. procrement techs, extended campses). 13 Q&A 14 7

8 Procrement Report Charge: Review options for redcing cost and increasing prchasing leverage via consolidation at one camps. Goal: Redce administrative cost by 20%. Implement continos process improvement in order to redce costs on an ongoing basis. Agst 17, 2016 Team Members Deb Misra John Hebard Stacey Lcason Mary Beth Cangello-Overtrf Moniqe Msick Jim Lynch Kari Brrell Jenny Campbell 2 1

9 Key Stakeholders Vendors End Users (Board of Regents to Stdents) Procrement Staff Unit Prchasers (PTs and/or Pro Card Users) 3 Options 1 Centralized office (UAF) with second office (UAA) and se of Procrement Field Technicians 2 Fll Centralization 3 Enhance Stats Qo with Procrement Concil and Dedicated Chief Procrement Officer 4 Maintain Stats Qo (baseline) 4 2

10 Option 1 Centralized office (UAF) with second office (UAA) and se of Procrement Field Technicians A central procrement office with a second semi-atonomos procrement office. All MAUs (major academic nits pls statewide) will be poplated with procrement field technicians with limited athority. Offices maintain their own bdgets, camps reporting strctres, and staff management and work assignment responsibilities. Central office will contine to assme the major procrement dties for UAS and Statewide, and will take on standardization and strategic responsibilities. Implementation timeline: Anticipate at least one year to flly implement with another year before savings become apparent. CPO dties can be moved immediately. 5 Centralized office (UAF) with second office (UAA) and se of PFTs - Key Change Elements Program changes inclde development of system-wide strategic sorcing goals, and standardization of procrement forms and practices, pdate of procrement policies and manal. Staffing changes inclde having procrement technicians at all camps locations. Consolidation of procrement fnctions at the office located near where the prodcts or services are most likely to be sed. Identify and tilize procrement officer's expertise on behalf of the system (thematic prchasing). Cross coverage of ProCard administration to eliminate single points of failre. Potential for ftre central procrement staff savings once the procrement technician program is implemented system-wide. E-Procrement system to flly atomate processes, inclding solicitation and contract development. Optimize available spend analysis for additional savings and continal process improvement. Chief Procrement Officer to be located at the central office, responsible for system-wide policies, standardization of forms and policies where appropriate, establishing contining process improvement goals in conjnction with camps offices, setting strategic sorcing goals for the system. Common electronic records repository for prchase orders, solicitations and contracts. Front-end investment wold inclde training of procrement technicians. Prchase and implementation of an E-Procrement system, if affordable. Contined se of a data gathering and analysis tool if not. 6 3

11 Pros and Cons of Option 1 Pros Cons Best combination of taking advantage of specialization, consolidation, economies of scale, and responsiveness to ser commnity. More consistency across the system. Allows for flexibility of the location of specialists near vendors or sers Streamlines processes. Loss of atonomy for some. Withot increased, consistent commnication, benefits will not be realized. Time and negotiation reqired to define the risk tolerance levels for all MAUs. Pts more work onto college/dept/nit staff (Procrement Field Technicians). Consistent se of Procrement Field Technicians. Reqires monitoring of Procrement Field Technicians work prodct and reslts. Common forms and docments. With Procrement Field Technician s across state, service shold improve and increase efficiency (time and money). Will reqire reglar training program to refresh and pdate skills for Procrement Field Technicians. 7 Pros and Cons of Option 1 More Pros More Cons Relieves Procrement staff of transactional, low dollar, low vale workload, where less vale is added. Gives ser departments greater sense of control Good sorce for skilled labor moving into procrement career path. System-wide vision for strategic sorcing and thematic prchasing. Potential to achieve some admin costs savings and staff time efficiency for strategic sorcing. Increased departmental transparency and accontability for procrement activity with Procrement Field Technicians. May not achieve the UA Strategic Pathways goals for immediate cost savings. Potential for adversely impacting political / legislative spport becase this change is not dramatic. 8 4

12 Pros and Cons of Option 1 More Pros More Pros Wold allow central office to work on systemwide contracts to save money (economies of scale) Sbstantial interest in Procrement Field Technician and potential for career advancement. Benefits from dedicated Chief Procrement Officer. Potential for simplified management of continos process improvement. No disrption in and potential to improve vendor relations. Maintaining camps connection and relationships between procrement and clients (departments and vendors) locally. Relatively easy to implement sccessflly. Responsive to legislative calls for administrative consolidation. 9 Option 2 Fll Centralization A central procrement strctre encompassing system wide procrement activities with centralized ProCards administration. Implementation timeline: Anticipate at least two year to flly implement with another year before savings become apparent. CPO dties can be moved immediately. One year to train procrement field technicians, and two years for staff realignment. 10 5

13 Fll Centralization - Key Change Elements Program changes inclde development of system-wide strategic sorcing goals, and standardization of procrement forms and practices, pdate of procrement policies and manal. Centralized contracting, competitive solicitations, and delegation of athority. Procrement Field Techs tilized system wide. Staffing changes inclde having single or matrix reporting strctre for procrement staffing. Assessment of staff skills to be done. E-Procrement system to flly atomate processes, inclding solicitation and contract development. Optimize available spend analysis for additional savings and continal process improvement. Realignment of administration fnction: Chief Procrement Officer in central procrement office responsible for system-wide policies, standardization of forms and policies where appropriate, establishing contining process improvement goals in conjnction with camps offices, setting strategic sorcing goals for the system. Examination of procrement administration to inclde reqisition assignment and distribtion, backp collection, new vendor setp, management of electronic prchase order, solicitation, and contract files to look for process efficiencies. Front-end investment wold inclde prchase and implementation of an E-Procrement system. Resorces needed to realign and training staff and admin at procrement. Training of Procrement Technicians. 11 Pros and Cons of Option 2 Pros Cons Potential administrative cost savings. Procrement staff cross training and professional development/career path opportnities increase. Appears to be the most in line with significant consolidation asked for by the legislatre. More potential for cost redction (deeper disconted prchases). Standardization and consistency with processes, forms, electronic/technology enhancements (saving time and money, and increasing vendor satisfaction). Potential degradation of service level for those distant from procrement leadership, if applicable (internal and external). Redced ability to provide essential local instrction and assistance (if procrement strctre is in a single location). Loss of atonomy for some. Prchases may take longer if staffing levels are redced. Loss of face time particlarly harmfl in dealing with resolving conflict between procrement services staff and clients and/or vendors (if procrement strctre is in a single location). 12 6

14 Pros and Cons of Option 2 More Pros More Cons System-wide vision for strategic sorcing and thematic prchasing. Maximm potential to achieve some admin costs savings and staff time efficiency for strategic sorcing. Cross coverage training cold be provided to eliminate a single sorce of failre. Benefits from dedicated Chief Procrement Officer. Clarity of common training and tilization of Procrement Field Technicians. Potential for simplified management of continos process improvement. Procrement processes may slow down de to lack of familiarity with physical and operational niqeness of each camps as impacts procrement (most impact of options). Perceived to be more expensive and difficlt for vendors to develop a relationship with Procrement Office (if procrement strctre is in a single location). Adapting to change reqires internal spport, time, and patience to enact a cltral shift (cost). Largest potential to lose trained people and generate internal conflict (strained relationships). 13 Pros and Cons of Option 2 More Cons Most difficlt and time consming to implement sccessflly. Most complex to commnicate to clients (vendors and departments). Price of an E-Procrement system may offset any short term cost savings 14 7

15 Option 3 Enhance Stats Qo with Procrement Concil and Dedicated Chief Procrement Officer Procrement offices at each camps with a procrement concil created for the prpose of establishing priorities, seeking process improvement, and inflencing cltral changes. 15 Enhance Stats Qo with PC and CPO - Key Change Elements Each camps wold contine to operate its own procrement office. A procrement concil wold advise on improvements, efficiencies and priorities for all. Staffing changes wold be minimal; bdget driven. E-Procrement system to flly atomate processes, inclding solicitation and contract development. Optimize available spend analysis for additional savings and continal process improvement. Chief Procrement Officer, location to be determined, responsible for system-wide policies, standardization of forms and policies where appropriate, establishing contining process improvement goals in conjnction with camps offices, setting strategic sorcing goals for the system. Procrement Concil advising Chief Procrement Officer and other niversity leadership. Front-end investment wold inclde prchase and implementation of an E-Procrement system. Resorces needed to establish a Procrement Concil and define, assess, and fnd the CPO capacity. 16 8

16 Pros and Cons of Option 3 Pros Cons Increased qality, coordination, and cooperation across MAUs (compared to stats qo). Gives procrement officials and niversity leadership the opportnity to participate in the decision making process (Procrement Concil). Improved consistency across systems to redce costs and increase efficiency. Benefits from dedicated Chief Procrement Officer. Retain knowledge and skills of crrent staff with local relationships. Redced opportnity for contined process improvement de to decentralized procrement staff; greater than stats qo. More transactional and less strategic de to demands on the time of the crrent procrement staff. Reqires engaged procrement concil members. Few opportnities for immediate cost savings. Least appearance of meeting legislative expectations; greater than stats qo. 17 Pros and Cons of Option 3 More Pros Proactive and strategic participation with niversity leadership. Retained atonomy for Procrement Offices. Minimal time to sccessfl implementation. Most able to enact cltral shift withot resistance to change. 18 9

17 Option 4 Maintain Stats Qo (baseline) Atonomos procrement offices at each camps (UAF/UAA/UAS) with Chief Procrement Officer at Statewide. CPO dties are a small portion of Associate Vice President for Finance s fll time responsibilities. Levels and processes of decentralization vary from camps to camps (i.e. procrement techs, extended campses). 19 Maintain Stats Qo - Key Change Elements Each camps wold contine to operate its own procrement offices. No changes to crrent practices. No change to staffing. After 3 years of redctions frther staffing changes are not possible with this model. Use of facilities and technology is the same as crrent. Chief Procrement Officer stays at system office. Crrently a part time job. No resorces are available to perform the policy and manal pdates, condct system-wide training, focs on continos process improvement, or strategic sorcing opportnities. No known sccession plan for Chief Procrement Officer responsibilities within Statewide administration. No front-end investment

18 Pros and Cons of Option 4 Pros Cons No change reqired. No loss of atonomy. Systems already in place, no downtime to implement. No retraining of prchasers reqired. Stats qo is getting the job done despite redced resorces in recent years. No change for clients they feel they have direct contact with local office. Does not prevent increased collaboration. Unable to take maximm advantage of specialization, economies of scale and strategic sorcing opportnities. Reslts in inconsistent practices across the system No opportnity for administrative savings. Redced opportnity for contined process improvement de to decentralized Procrement staff. No capacity to ndertake strategic initiatives or long term improvements. Does not meet legislative redction mandates. 21 Pros and Cons of Option 4 More Cons Least in line with the charge and goals of UA Strategic Pathways. Does not have dedicated Chief Procrement Officer

19 Frther Analysis Needed What physical location(s) is most effective for a central procrement strctre for fll Centralization (Option 2)? Define reporting strctre and level of atonomy (single or matrix reporting) for fll Centralization (Option 2). How do yo operationalize the Procrement Concil (who is on it? How do yo inclde and collaborate with niversity leadership) (Option 3)? How the Chief Procrement Officer position will be strctred (Option 3)? 23 Addendms Procrement Grop Common Definitions 24 12

20 UA Strategic Pathways Procrement Grop Common Definitions At or previos meeting, we did not qite settle on the definitions of or options and tended to blend in featres like a procrement concil and thematic prchasing that may be desirable or not, bt can be part of most any basic strctre. This makes it difficlt to identity the pros and cons of the varios options that we discssed. It may be helpfl to se the following common terminology and descriptions. Procrement Office Atonomos office(s) that operates independently within the constraints of a central policy and procedres and determinations of the Chief Procrement Officer (CPO); Procrement Field Technician (PFT) A procrement representative collocated with the ser commnity that may report to a Procrement Office or a ser department bt gets its athority to prchase and level of atonomy throgh the procrement office management chain; Procrement Concil Procrement officials that advise the CPO and collaborate system wide with niversity leadership (for example, to promote efficiencies within procrement: negotiating blk contracts, tilization of state contracts, setting thematic prchasing needs, strategizing sorcing needs, maximizing srpls property retilization, inflencing cltral changes, etc.). Thematic Prchasing Groping of procrements that have similar processes, isses or specializations (crrently tilized to some extent at each of the two major offices); Dedicated CPO Dties - Setting direction on policy, procedres, and implementation strategies; responsibility to set procrement delegations; overall system awareness and organization of thematic and strategic priorities. Protest, appeal, adjdication is at the system office. Strategic Sorcing - Analysis of spending patterns to identify opportnities to leverage or economies of scale for savings opportnities. E-Procrement Systems System to flly atomate processes; to inclde generating and tracking contracts and solicitations, processing orders, and provides sable spend data for continal process improvement (in procrement and system wide).