Transcript CMM - Purdue University

Procurement Strategic Planning
Process Transformation
• Procurement
Risks and Opportunities
•Procurement Process Capabilities & Interdependencies
• Key Strategic Planning Milestones
• Mission, Vision, Values, Goals and Strategies
Procurement Processes – DRIPPING IN RISK & OPPORTUNITY?
$450m to $500m
Price or
Total Life
Cycle Cost?
Wrong
Sourcing &
Relationship
Strategy?
IT – Security,
Transaction
Integrity,
Licenses?
Lack of
Negotiation
Strategy?
Supply Interruption,
Product or Service
Failure
Unwanted
Auto Renewals,
Non-Compliance
With T’s & C’s?
Lack of Post-Award
Contract Management?
1
Lack of Information,
Reporting, Tools,
Technology & Workflow
Skills/Competencies, Planning &Project
Management etc?
Employee
or Supplier
Fraud?
Quality/
Service/
Scope Creep?
Legal Risks,
Insufficient
Protections,
Costly
Disputes?
Brand/Reputation
Regulatory/
Environmental
Non-Compliance?
Other
Supplier Risks
Financial?
Dependency?
Diversity?
Procurement Process Capabilities
Procurement
Strategies and
Policies
Procurement
and Risk
Management
Processes
 Current & Continuous
Procurement Strategic
Planning
 Procurement
Strategic Plan aligned
with key Company
Plan
 Current and aligned
Procurement Policies
 Clear Responsibilities
Defined & Segregation
of Duties
 Ethical Purchasing
Standards
 IT Plan for Process
 Integrated Strategic
Sourcing/Commodity
Management
Processes
 Integrated Supplier
Management Process
 Integrated Risk
Management Process
 Integrated Contracts
Management Process
 Efficient, Integrated
Purchasing, P-Card &
AP Procedures
 Supplier Stratification
 Supply Risk Mgmt
Procurement
Organization
and People
 Purchasing Executive
 Clearly defined central
and de-central roles
and job descriptions
 Cross Functional
Category & Risk
Management Teams
 Buyers Trained &
Certified
 Trained End Users
 Skills and
Qualification matrices
 Supportive Culture
 Segregation of Duties
Procurement
Information
for DecisionMaking
Procurement
Information
Methodologies
& Tools
Procurement
Systems
and Data
 Spend Analysis
Reporting
 Sourcing & Supply
Risk Strategy
Monitors, Alerts &
Reporting
 Contract Mgmt &
Administration
Reports/Alerts
 Supplier & Category
Reports
 Purchasing, AP,
Contracting and PCard Compliance and
Reporting
•Expenditure data
mining and analysis
•Market Analysis
•Supplier Analysis
•Category Analysis
•Contract & Library
Database Analysis
•Risk Analysis and
Control Tools
•Supply Risk
Dashboards
•Expenditure Control &
Contract Compliance
Analysis
•External Info Services
 Integrated Procure to
Pay System
 Data Warehouse
 CXML/EFT etc.
 Electronic Supplier
Catalogues
 Internet-based
Purchasing
 Integrated P2P to ERP
 internal & external for
links for Supply Risk
 Contract Workflow &
Management System
 Contract Library
 Electronic Approvals
There is risk to the process if infrastructure component is deficient:
Procurement
Services processes
not designed to
achieve strategy or
comply with policies
Personnel are unable to
perform necessary
Procurement activities &
processes effectively
Reports do not provide
information for
effective management
and control of
Procurement and risks
Procurement/AP
Analysis methods do
not adequately
produce complete,
relevant information
Reliable, Relevant and
Timely Business Workflow
and Data is not
available/used for analysis,
ordering and controls
Procurement Process Transformation
7
Scan Business
Environment
Evaluate, Measure,
Take Corrective
Action (Continuous
Improvement)
1
Complete
From Oct 2012
6
Complete
Finalize Vision &
Mission
Strategic
Planning
Process
Analyze the
process – ROWS &
Set Initial Goals
End Sep
September
2
Set High – Level
Mission , Vision &
Values
3
Complete
5
Validate Action
Plans & Goals
Develop Strategic
Action Plans
Advisory Team: MMDC, Food Services, Supplier Diversity, ITaP,
Athletics, Treasury, Business Management, Physical Facilities,
Housing, Regional Campuses and Procurement Services Leadership
4
End Aug
Strategies
Goals
Vision, Mission &
Values
Procurement Process Transformation
MISSION
Effectively and efficiently
manage procurement,
accounts payables and travel
services risks and
opportunities in support of
Purdue University’s Goals
$28m - $32M in
value improvements
3year - 2012-2015*
2012-2015
Targeted
Sourcing,
Consolidation,
& Negotiation
Programs
Funding Sustainable
Process Capabilities
Improvements
4
VISION
Deliver excellent service,
value and expertise to our
internal partners and
stakeholders through a
“managed process” and a
high performing, innovative
and diverse supply base
Customer
Satisfaction
% Spend
“Managed”
Index TBD 2012-2015
33% 2012 – 85%
2015**
Utilize Best
Procurement
Practices Consistently
Professional &
Dedicated,
Organization &
Culture
Strategic Sourcing,
Category, Supplier,
Supply Risk, Project,
Contracting, Supplier
Diversity, Accounts
Payables, Travel
Management, &
Purchasing Execution
Center-Led, Qualified
and Professional,
Customer-Focused,
Cross-Functional &
Collaborative, Process
Ownership, Skills-Based
Roles, Total Value, Risk
and Control Focused
VALUES
Customer Service Orientation
Protective of Purdue’s Interests
Collaborative, Inclusive, Responsive
Proactive and Data Driven
Respect For Suppliers
Commitment to Diversity
Commitment to Sustainability
Professional Integrity, Courtesy, Fairness,
Objectivity, Accountability
“Managed”
Capabilities
Top 10% in
Our Industry
2014/2015
2014/2015
Timely &
Fact-Driven
DecisionMaking
Integrated
Systems, Data
Integrity and
Completeness
Leverage Tools and
Information for
Efficient Workflow &
Collaboration, Accurate
& Complete Analysis,
Decision-Making,
Measurement, Reporting
& Controls
Passion for Excellence in
Technology Adoption,
Source Data Standards
and Data Integrity
(Category, Supplier,
Market etc) for
Procurement
Transactions
* First Pass based on limited data/information detail – further opportunities to be identified as data/information improves
* *Assumes Total Spend that could be influenced at $450m and current coverage at $150m ($137m confirmed to date).