PPP Management

It may be a complex procurement with capital assets, inventory and associated technical training worth a value of £4.4Bn but almost 7 years does seen a very long time. BAE Systems has now reached a conclusion with Saudi Arabia over the purchase of 72 Typhoon aircraft.  This news come only a couple of weeks after sales to UAE fell through.  This might seem a series of standard events in any other time but it events both in Europe and the Middle East make for interesting interpretation: 1.  The consortium that builds Typhoon includes Finmeccanica; a company recently embroiled in a corruption scandal that has resulted in the chairman and chief executive being investigated.  The scandal has also meant a lucrative helicopter order being cancelled. 2.  Both Saudi Arabia and UAE are supporting the opposition in the Syrian civil war; a conflict that is bringing Saudi Arabia into conflict with Iran, the Syrian government's main backer.

Our first video; Contract Management.  If you have any comments please post, all welcome.  If you can't see the video on an Apple device the video will be available soon on You Tube.   The You Tube link is now at:   http://www.youtube.com/watch?v=uMRb8OaDNtk

The story covered in Supply Management on 29th January ( http://www.supplymanagement.com/news/2014/aston-martin-aims-to-grow-uk-supply-chain-by-10-per-cent  ) identified Aston Martin's intention to use more British suppliers. Todays coverage of a product recall to Aston martin identifies the fault ( http://www.supplymanagement.com/news/2014/aston-martin-recalls-cars-over-substandard-component-from-chinese-supplier  ) It might have seemed trite to criticise the Prime Minister for his comments at the WEF regarding Britain being the place for manufacturing but this is a perfect example of quality over price.  This argument has been a repeated theme both in the media and this blog over the last couple of months. The impact to a global luxury brand such as Aston Martin using a Chinese product that has failed might have significant impact for a brand that differentiates on quality and luxury rather than price. This comes in the same week as Bombardier in Derby are awarded the £1B

The government plans to encourage more building of new homes by reducing the number of regulations that developers must comply with are estimated to save developers approximately £500 per home.  In his article in the Telegraph on 27 Jan, Matthew Holehouse identified rules on doors and windows, arrangements for toilets, lighting, telephone lines and disabled access as areas that will be culled in the review.   http://www.telegraph.co.uk/news/politics/david-cameron/10598283/Window-and-door-rules-axed-in-drive-to-get-Britain-building-houses.html .  Although the government insist that the changes will help simplify the planning process and will not change planning policy or environmental protections there  are concerns in some quarters that if too many of the regulations are cut there could be negative results.  Whether this be an increase in badly designed homes, or that it will result in the irresponsible dumping of waste which could lead to an environmental disaster. 

An earlier blog today highlighted a leading FTSE100 company commenting on no longer using price only tender evaluations.  Clearly such practices makes for strained relationship with suppliers and when used wholesale across the procurement spectrum drives a culture of transactional behaviour. The first of the link identifies that little has been done to develop supplier relations; this clearly has strong implications for the end user or consumer as well as ethical and health implications. http://www.supplymanagement.com/news/2014/no-increase-in-srm-efforts-following-supply-chain-scandals In a retail environment where cost is very much a deciding factor to the consumer the article, linked below, illustrates further steps to heighten price sensitivity as a key factor. http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/10617384/Argos-and-Homebase-demand-rebate-from-suppliers.html

The case identified via the link ( http://www.supplymanagement.com/news/2014/scottish-government-loses-ferry-procurement-challenge  ) relates to a procurement activity undertaken by the Scottish Government and the notification to challenge the award notice by an unsuccessful bidder. Of particular note is the use of e-mail to make the challenge notification and the timeframe provided by the Authority to raise a challenge. Result: The challenge stands and further hearings are to follow.

Whilst the following are encouraging more details are needed and quicker role out is essential UK government takes the lead: http://www.supplymanagement.com/news/2013/government-urges-suppliers-to-invoice-electronically European parliament follows on: http://www.supplymanagement.com/news/2014/e-invoicing-gets-the-go-ahead-from-eu For the other developments encouraging SME these measures need to be introduced as soon as possible.

Increasing competition into a market place keeps the suppliers on their toes, drives innovation, price improvement and helps reduce the potential for corruption. As a small business we are very much in accord with the sentiment above.  However, when I read the article ( http://www.supplymanagement.com/news/2014/meps-agree-changes-to-public-sector-procurement-rules  ) I was concerned by: The European Parliament voted with comfortable majorities to support the package of reforms, which aims to cut red tape by reducing paperwork, boost the participation of SMEs by breaking up big contracts into smaller lots and encourage the creation of public sector mutuals to run services. As procurement and project management professionals the red text above is a cause for concern and follows on the heels of the UK government's CPO's comment along similar lines, albeit related to IT projects.  Breaking up larger contracts into smaller contracts has the potential for creating benefits but

   Surprising to see the article in Supply Management commenting on evaluation criteria not being on price alone ( http://www.supplymanagement.com/news/2014/dont-always-go-for-the-cheapest-price-buyers-warned  ). Awarding on price alone raises risk around quality, compatibility, subsequent additional costs, product life etc.  However, there are some services that can be competed on price alone and there is absolutely nothing wrong in competing on price alone when the other issues of service and quality do not play a factor. What are these areas? Utilities are a prime example where the quality of the product is mandated by the regulator and there are no delivery issues that would differentiate competitors. Without stating the obvious the following link provides a wide variety of reasons why other factors are important: https://www.google.co.uk/#q=tender+evaluation+price+alone&start=0 Some of the links from Australia are excellent and all of the articles offer food for