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Background to procurement

 
Following a review by Price Waterhouse Coopers (PWC) in late 2009/early 2010, a business case was presented to the Council’s Corporate Strategic Board (CSB) in August 2010 recommending that an increased focus in commercial capability and capacity would deliver significant benefits for the Council. These would be from adopting of a more co-ordinated and strategic approach to the acquisition of goods and services and greatly improving compliance with Council procurement procedures and corporate contracts.
 
CSB accepted the recommendations and committed funding for a trial to be run over a 24 month period to identify, scope and deliver the potential benefits highlighted in the PWC report, primarily cashable savings. It was further agreed that this trial was to be led by a senior and experienced procurement professional – Chief Procurement Officer (CPO) – who was to be recruited on an interim basis.
 
Following the arrival of the interim CPO, a procurement transformation programme was developed and implemented. This programme delivered significant financial benefits (cashable savings) across the Council, as well as a number of non financial achievements:
  • A sustainable procurement policy, which focuses the Council’s procurement activity as an opportunity to invest in the local community and support regeneration objectives 
  • An upgrade to the procurement module in SAP, which ensures that the system is both more proactive in supporting users to purchase in the best way, as well as encouraging compliance with the Council CPRs and corporate contracts 
  • Initial training across the Council to raise awareness of best practice tools and techniques in procurement; creation of a procurement toolkit to support/guide all those involved in the complete end-to-end procurement cycle
  • Adoption of an interactive software tool to provide strong and effective MI, based on data from SAP
  • Development of a target operating model for procurement in the Council;
  • Improved commercial governance through the creation of a Strategic Procurement Board (SPB) for the Council and Directorate Contracts Boards (DCBs) for more local, service area governance
In early November 2012, a proposal was submitted to CSB for a second phase for the Procurement Transformation Programme, to build on the earlier successes of the Programme. This phase two recommended that six activities be pursued to encourage integrated, cross Council working as a means to embed improved commercial/procurement practices:
  1. Create end-to-end supply chain management (commercialisation)
  2. Work with commissioning team(s) across the Council to develop the most effective commercial and commissioning interface, at both tactical and strategic levels
  3. Introduce commercial contract management into the Council
  4. Launch category management, at all levels of Council operations
  5. Define performance management of the commercial and procurement process across the Council and create a suitable set of metrics
  6. Following the success of the Programme, establish a permanent commercial/procurement organisation in the Council
CSB agreed these recommendations in principle, with immediate focus on introducing commercial contract management, launching category management and establishing a permanent commercial organisation.