Contracts Division Metrics:
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2 Contracts Division Metrics: What Tools Are in Your Toolbox? Breakout Session #: F03 Heidi Timmerman, CPCM, GWMCGC, MBA Director of Procurement and Contracts Administration Oak Ridge Associated Universities (ORAU) Landon Hill, CMLDP Alumni, MBA Team Leader Commercial Support/Marketplace UT-Battelle/Oak Ridge National Laboratory (ORNL) Date: Tuesday, July 26 Time: 4:00pm 5:15pm
3 Brief bios Heidi Timmerman currently manages prime contract administration, the Strategic Partnership Projects program, subcontract administration and small business outreach for ORAU. She has held leadership roles in service, retail and manufacturing industries after serving in the Marine Corps. She holds a MBA from the UNC and a BA from the Univ. of Rochester. Landon Hill currently serves as a Procurement Team Leader at ORNL, leading e-commerce and strategic sourcing initiatives. He has 9+ years experience in contract management in government and industry, as well as 8+ years in supply chain management in military and industry. He holds a MBA from LMU, a BA from UT, and is a graduate of NCMA s CMLDP. 2
4 Purpose What metrics do you use to measure success in your contracts organization? Want to add a few measuring tools to your toolbox? Explore metrics in the areas of employee, customer, operations, and finance and walk away with a few new tools to facilitate better decisionmaking utilizing real data and trends. 3
5 Metrics: A tool for the toolbox 4
6 Agenda: Why use metrics How to develop metrics What to measure Summary Exercise 5
7 Why use Metrics? 6
8 Why? Measurement is the first step that leads to control and eventually to improvement. If you can t measure something, you can t understand it. If you can t understand it, you can t control it. If you can t control it, you can t improve it. H. James Harrington 7
9 Why? 1.Objective information 2.Timeliness 3.Visibility 4.Better decisions 8
10 Why? We get what we measure 9
11 How to determine what to measure? 10
12 How? Team Member Input 11
13 How? Industry Standards 12
14 How? Contract Requirements 13
15 How? Answer specific questions 14
16 EXAMPLE 1: METRIC DETERMINED EMPLOYEE NON-EXEMPT OVERTIME 15
17 Example 1: Calculation Hours overtime in a month divided by the number of non-exempt employees 75/5= 15 hours/month average 16
18 Example 1: Set Standard Measurements Red = more than 10 hours/month Yellow = 8-10 hours/month Green = less than or equal to 4-7 hours/month Metric Expression Red if Yellow if Green if Oct-15 Employee Overtime Average # >
19 EXAMPLE 2: METRIC DETERMINED SUBCONTRACT TO SMALL BUSINESS SDVOSB 18
20 Example 2: Calculation Straight from Subcontracting Plan But. Inclusion vs. Exclusion Commitment vs. Payment 19
21 Example 2: Set Standard Measurements Red = not meeting or within a certain % DESCRIPTION EXPRESSION Red if Yellow if Green if Oct-15 SDVOSB Actual to date $ $1, < 1.85% 1.85% % 3.25% Actual to date % of goal 1.75% 20
22 What do we measure? 4 Critical Areas Employee Customer Financial Operational 21
23 Employee Metrics 22
24 Employee Metrics Workload Productivity Morale 23
25 Employee Metrics Metric Workload - # of Transactions per Employee METRIC Expression Red if Yellow if Green if OCT-16 NOV-16 # Transactions per team member # < Calculation # of Transactions divided by # of employees Goal Range Red = More than or equal to 35 Yellow = between 25 and 34 Green = Less than 24 24
26 Employee Metrics Metric Professional Development/Training METRIC EXPRESSION Red if Yellow if Green if Oct-15 Training obtained this month # of training hours /employee < Calculation # of Training hours divided by the # of Employees Goal Range Red = Less than or equal to 2 Yellow = between 2 and 3 Green = More than 3 25
27 Employee Metrics Metric Employee Satisfaction Survey METRIC EXPRESSION Red if Yellow if Green if Oct-15 Employee Satisfaction % of satisfied employees < 75% 75% - 84% 84 % 85.6% Calculation Survey taken once per year Goal Range Red = Less than 75% Yellow = between 75% and 84% Green = More than 84% 26
28 Employee Metrics Summary METRIC EXPRESSION Red if Yellow if Green if Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 YTD # Transactions per team member # < EMPLOYEE Training obtained this month # of training hours /employee < Employee Satisfaction Survey once per FY % of satisfied employees < 75% 75% - 84% 84 % 83.8% 83.8% EMPLOYEE OVERALL 27
29 Customer Metrics 28
30 Customer Metrics METRIC EXPRESSION Red if Yellow if Green if Oct-15 Nov-15 On-time delivery % < 77% 77% - 81% > 81% 83% 86% DOE targets: > 84% 29
31 Supplier Specific Delivery Statistics % 100% 99% 98% % 95% 96% 97% 97% 96% 95% 94% 93% 93% % % 90% 0 October November December January February March On Time > 5 Days Late On Time % 89%
32 Supplier Specific Delivery Statistics 100% 95% 90% 85% 80% FY10 FY11 FY12 FY13 FY14 FY15 On-Time Delivery % Goal
33 Customer Metrics METRIC EXPRESSION Red if Yellow if Green if Oct-15 Nov-15 Average cycle time for new actions less than $150,000* Average cycle time for new actions greater than or equal to $150,000* Average cycle time for all new actions # of days < # of days < # of days < DOE targets: < SAT = < 9 days > SAT = < 30 days All = 11 days 32
34 Customer Metrics Summary METRIC EXPRESSION Red if Yellow if Green if Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 YTD On-time delivery % < 77% 77% - 81% > 81% 83.0% 86.0% 82.4% 79.2% 81.6% 76.8% 79.8% 82.3% 86.0% 80.5% 83.5% 80.5% 81.8% CUSTOMER Average cycle time for new actions less than $150,000* # of days < Average cycle time for new actions greater than or equal to $150,000* Average cycle time for all new actions # of days < # of days < CUSTOMER OVERALL 3 3
35 Financial Metrics 34
36 Financial Metrics METRIC EXPRESSION Red if Yellow if Green if Oct-15 Nov-15 YTD Budget vs. Actual % >100% 100% 100% 103% Cost savings and avoidance as a percentage of all dollars transacted % <1% 1 to 3 % > 3% 1.8% 3.4% 35
37 Financial Metrics METRIC EXPRESSION Red if Yellow if Green if Oct-15 Nov-15 Purchasing Costs (% of award $) % > 3% 2% 3% 2% 1.5%.98% Transaction Cost $ > $500 $350 - $500 $350 $254 $365 36
38 Financial Metrics Summary METRIC EXPRESSION Red if Yellow if Green if Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 YTD YTD Budget vs. Actual % >100% N/A 100% 100% 103% 86% 82% 92% 101% 98% 99% 91% 86% 88% 95% 93% FINANCIAL Cost savings and avoidance as a percentage of all dollars transacted % <1% 1 to 3 % > 3% 1.8% 3.4% 3.4% 3.1% 2.4% 2.9% 3.5% 3.1% 2.6% 2.9% 3.2% 3.1% 3.0% Purchasing Costs (% of award $) % > 3% 2% 3% 2% 1.5% 0.98% 1.6% 2% 2.3% 3.6% 1.5% 2.4% 1.7% 2% 3.6% 1.9% 2.1% Transaction Cost $ > $500 $350 - $500 $350 $254 $365 $346 $376 $120 $222 $289 $245 $362 $343 $306 $248 $290 FINANCIAL OVERALL 3 7
39 Operational Metrics 38
40 Operational Metrics METRIC EXPRESSION Red if Yellow if Green if Oct-15 Nov-15 Ratifications Requested # % of Competitive Awards % < 45% 45% - 55% > 55% 52.3% 57% Small Business Goals % > 75% % 76% 39
41 Operational Metrics METRIC EXPRESSION Red if Yellow if Green if Oct-15 Nov-15 Purchase Card Use Compliance % of Pcard holders compliant 85% 85%-90% 91% 86% 94% Purchase Card transaction coding completed on time % 85% 85%-90% 91% 92% 94% Purchase Card Approvals on time % > 85% 85%-90% 91% 95% 96% 40
42 Operational Metrics Summary METRIC EXPRESSIO N Red if Yellow if Green if Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 YTD Purchase Card Use Compliance % of Pcard holders compliant 85% 85%-90% 91% 86% 94% 91% 92% 94% 90% 92.5% 96% 93% 98% 91.5% 90.5% 92.4% Purchase Card transaction coding completed on time % 85% 85%-90% 91% 92% 94% 96% 92% 90% 94% 98% 99% 98.8% 89.9% 93% 92% 94.1% OPERATIONAL Purchase Card Approvals on time Ratifications Requested % > 85% 85%-90% 91% 95% 96% 90.4% 93% 94.7% 90% 94% 96% 89% 93% 94.7% 96% 93.5% # % of Competitive Awards % < 45% 45% - 55% > 55% 52.3% 57% 56% 46% 49.5% 58% 56% 60% 61.5% 52% 54.5% 57.5% 55% Small Business Goals % > 75% % 76% 96% 75% 100% 95% 95% 100% 89% 85% 95% 78% 89% OPERATIONAL OVERALL 4 1
43 METRICS SUMMARY 42
44 Metrics Cover Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 YTD Employee Customer Financial Operational 4 3
45 Metrics Cover Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 YTD Employee red items # of trans per team member Training # of trans per team member/ Employee Satisfaction Customer red items Avg. Cycle Time $150K Avg. Cycle Time $150K On-Time Delivery Avg. Cycle Time all new actions Avg. Cycle Time $150 K Financial red items YTD Budget vs Actual YTD Budget vs. Actual/ Purchasing Costs Purchasing Costs Operational red items 4 4
46 Summary Why use Metrics? Facts & Data Timeliness Visibility Decisions How to Develop Metrics Employees Industry Contract requirements Need answers to specific questions What to measure; Examples in Employee Customer Financial Operational Ultimately Lessons learned Continuous improvement opportunities Rewards and Celebrations Tools for your toolbox! 45
47 Exercise 46
48 Exercise 15-Mar 15-Apr 15-May 15-Jun 15-Jul Employee Overall Customer Overall Financial Overall Operational Overall 4 7
49 Exercise Buyer Supplier Business Size Elvis Presley Amazin.com WOSB Michael Jackson Peyton Manning WallyWorld, Inc. Large Cameras-R-Us SB Elvis Presley Better Buy SDVOSB Michael Jackson WallyWorld, Inc. Large Peyton Manning Better Buy SDVOSB Elvis Blue Wing Presley Shoes WOSB Michael WallyWorld, Jackson Inc. Large Peyton Manning Amazin.com WOSB Item Description NIKON D5200 DIGITAL SLR CAMERA NIKON D5200 DIGITAL SLR CAMERA NIKON D5200 DIGITAL SLR CAMERA HP ELITEBOOK REVOLVE 810 G2 HP ELITEBOOK REVOLVE 810 G2 Commodity Group Unit Price Cycle Time in days Expected Lead-time in days Actual Lead-time in days Camera $ Camera $ Camera $ Laptop $1, Laptop $1, HP ELITEBOOK REVOLVE 810 G2 Laptop $1, RANGER BOOTS, MEN SIZE 11 Clothing $ RANGER BOOTS, MEN SIZE 11 Clothing $ RANGER BOOTS, MEN SIZE 11 Clothing $
50 Contact Information Heidi Timmerman Oak Ridge Associated Universities (ORAU) Director of Procurement and Contracts Administration Office: D. Landon Hill Oak Ridge National Laboratory (ORNL) Team Leader- Commercial Support / Marketplace Acquisition Management Services Division UT-Battelle LLC- Contractor to Department Of Energy hilldl@ornl.gov Office:
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