PPP Management

The four step stage detailed above is a methodical way to create a Procurement function or undertake a review of the efficacy of the supply chain.

I wrote this article in early 2017 earlier in the year and it was published in February's (2017) edition of In-tend's In-procurement magazine.  Little has changed in the last 12 months; albeit the need for Procurement to generate more value for the business has gained greater prominence. Many people, and indeed many colleagues, believe that procurement is just a matter of buying things, and as people buy items every day everyone is therefore a procurement expert; if only that was the case. Aligning the different, and often disparate, views of stakeholders is not easy; neither is resolving the many pre-determined concepts – value, brand, immediacy, future proofing. So delivering a successful outcome for all concerned is no easy task. Over the Christmas and New Year period I was fortunate enough to have some time off work and during this period watched, with the family, some of the Harry Potter films. For those familiar films you will recall that there is ...

If you see the supplier as the enemy - then agile is not for you, stop reading now. If you see the contract as a tool with which to beat the supplier - then agile is not for you, stop reading now. If you are focussed on savings and achieving the lowest possible price - then agile is not for you, stop reading now. However, if you see the buyer/supplier relationship as a collaboration (within bounds) – then agile could work for you. If the contract is a means to measure business benefit then agile could well work for you; and, if delivering true value to the business is a key agenda then maybe the rest of this article could work for you. From a Procurement perspective there are three factors that must be addressed before progressing with an agile agenda: Stakeholders, Capability and Suppliers. All three of these factors are integral to moving to an agile methodology; exclusion of any of these will make the move to agile very difficult, if not impossible. Stake...

Agile Procurement means many different things to many people and following the old adage “You can please some of the people some of the time….” Almost certainly means that there will be difference of opinions. Perhaps some definitions of agile /Agile would be a good place to start; oh dear, there’s already disagreement over the capitalisation of the first letter. The Oxford Dictionaries   defines agile as “ Able to move quickly and easily ” and “ Relating to or denoting a method of project management, used especially for software development, that is characterized by the division of tasks into short phases of work and frequent reassessment and adaptation of plans .” Agile as a business term follows on from the concept of lean engineering and can trace a lineage back to lean manufacturing and the Toyota Production System in the late 1940s. Based on a system underpinned by process, tools and training it allows organisations to respond quickly to customer nee...

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The text from our latest article is below.  View it on line at  this  Link   Organisational Structure and Process Structure Organisational Structure - Project management methodologies are built upon structures that review and report progress, provide direction and represent the business. By establishing an organisational structure, with senior management representation and a governance board effective management of the procurement activity in line with the corporate expectations is enabled.  Furthermore this provides a clear way for assessing progress, addressing priorities and is a tool for suitable decision making with suitably empowered individuals that represent the business and user community.  It also provides the mechanism by which priorities can be identified and acted upon.  Providing a management structure that meets regularly greatly assists in reviewing and evaluating the key risks and issues; this is especially important when it i...

Looking back at 2014 and the challenges that have been faced and overcome we look at what might be top of the agenda in 2015.   We look at three specific areas and assess their impact. Striving for value Deploying technology Strategy fulfilment As procurement professionals we have always sought value in our actions.   It’s important to understand that when we identify “value” we mean it in terms of both cost and outcomes.   We strive for the most financially beneficial deal, this is easy to judge, what is much harder is identifying the true value achieved in terms of outcomes.   Outcomes are not always immediate and to truly identify the value of outcomes we must track the benefits that have been achieved from the delivery of outcomes. Many companies look no further than standard IT and an isolated approach to procurement. Using e-procurement tools not only makes the processes easier to run and co-ordinate but it also provides clarity and the abili...

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.

   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 ...

We highlighted an excellent, if slightly surprising, story article earlier in the week about the payment times of the UK's Ministry of Defence and how such great performance, if copied across government and the private sector could really help businesses and the U economy. Today's Independent (  http://www.independent.co.uk/news/business/ ) carries 2 stories in very short order detailing developments in the Ministry of Defence's transformation initiatives. The uppermost article (on the Independent's screen)  ( http://www.independent.co.uk/news/business/news/mod-sets-sights-on-serco-and-capita-to-reform-supplies-9051822.html  ) highlights the Secretary of State's intent to build capability within the current defence procurement body, the Defence & Equipment Support organisation, following on from a failed previously initiative. The second article ( http://www.independent.co.uk/news/business/news/mod-in-new-retreat-over-bid-to-enrol-big-business-9047796.htm...

Today's Guardian carries the story of the Nuclear Decommissioning Authority axing the commercial director role ( http://www.theguardian.com/business/2014/jan/09/nuclear-decommissioning-authority-axes-commercial-director-role  ).  The axing of the role follows on from criticism of the body by politicians on the public accounts committee. Lose the role or change the person? usually it is the latter and not the former.  Perhaps if the new structure is more focussed towards the work at Sellafield then this might be a reason, what happens to the other sites? What is really strange is that within the same article is this: "The NDA boss appeared at before the committee alongside Tom Zarges, the boss of the NDA's private sector contractor Nuclear Management Partners (NMP) which has just been controversially reappointed to clean up Sellafield. Clarke insisted that the reappointment was the best way forward even though he admitted NMP had repeatedly failed to meet many of its ...

Good news for the UK economy, growth in the construction sector but also positive steps in developing the nuclear supply chain. Having been the world leaders in nuclear energy for many years the capability within the UK has dwindled; positive steps like this can help re-establish the UK skills in this sector. http://www.supplymanagement.com/news/2014/nuclear-sector-supply-chain-gets-ps13-million-boost http://www.supplymanagement.com/news/2014/uk-construction-sector-continues-sharp-growth

The Israeli missile Barak missile has now finally cleared the procurement process in India, 5 years since it started.  What was the reason fro the delay? Allegations of corruption (  http://www.firstpost.com/india/defence-ministry-clears-procurement-of-barak-missiles-1303271.html  ) In this particular case there was no case to answer. Indian defence procurement has had recent problems with allegations of corruption, the most notable of which has been the recent case of Finmeccanica resulting in the loss of a significant helicopter order $750m that could have led to a further order of $250m.  Not only was the first order cancelled but subsequent investigations into the original deal resulted in the successful prosecution of the Finmeccanica CEO. However, the Finmeccanica story is not the first, in fact it is someway down the list of previous defence procurement scandals within the Indian defence sector with cases stretching back over thirty years. Wh...

Congratulations to BAE Systems on the recent contract with South Korea to upgrade aircraft. "Nothing new!" many will shout; but what is very interesting is the fact that BAE Systems are not the OEM of the aircraft. Yes, BAE Systems are a world leading manufacturer of aerospace vehicles and equipment and yes they provide outstanding support to the armed forces who operate BAE Systems aircraft. This marks a real departure in their strategy of providing services. Upgrading an aircraft system from another OEM. Understanding the different engineering layouts and getting the bill of materials correct will prove to a real challenge, especially as the OEM of the aircraft (who will also have very strong relationships with component suppliers) was beaten in the competition. A great story, which could only have been better was if the work was being undertaken in the UK. Let's hope that this departure for BAE Systems in upgrading other OEMs aircrafts for clients is successful...

We've always known that risk in the supply chain is difficult to capture in totality and there has always been unforeseen risk lower down in the supply chain that results in significant problems.  The analysis from +MIT and +David Simchi-Levi. Recognising the impact that problems in low cost component supply can have is important and recognising that the impact can be disproportionally greater than the cost of the item is worthy of note.  Without re-visiting our previous article on managing by clichés this is perhaps worthy of "ruining the ship for a ha'penny of tar". The summary article in +Supply Management also raises the need for mitigation strategy.  The article and the need to manage risk are timely reminders following on from our recent article on the project management problems experienced by the BBC on its DMI project. http://www.supplymanagement.com/news/2013/supply-chain-risk-occurs-in-unexpected-locations-and-components

The revised thresholds requiring OJEU competition have been published.  Slight differences in the values over the published 2 year rates are due to inflation and currency fluctuations. For more information view the following link: http://www.walkermorris.co.uk/business-insights/new-public-procurement-thresholds-1-january-2014-published The link has some interesting points and especially the question of VAT applicability will be raised.  Hopefully the following link will help in identifying the limits: http://www.ojec.com/Threshholds.aspx

The excellent article in Supply Management identifies the costs incurred by government departments for Christmas trees in 2012, http://www.supplymanagement.com/news/2013/50-fold-price-difference-on-government-christmas-trees-0 Some questions fall out from this: "What types of trees did the FCO buy for £750 each?" "What Christmas tree do you get for £15 at the DfT? and was it on public display?" "No detail on the Christmas tree at the Treasury, does this mean the Chancellor has cancelled Christmas? austerity measures?" From our earlier comment on the BBC it would be interesting to see what the expenditure on Christmas trees by the BBC was for 2012.

It would seem that now is the season for airing government procurement and contract management failings: Local government - http://www.supplymanagement.com/news/2013/local-government-not-taking-advantage-of-procurement-advice Central Government - http://www.supplymanagement.com/news/2013/review-of-g4s-and-serco-contracts-reveals-deficiencies-in-key-controls The actions from Messrs Crothers and Hurd will be decisive in improving the performance of procurement and contract management within central and local government.

Back in the news is the problem with government procurement and time to contract. http://www.supplymanagement.com/news/2013/labour-mp-hillier-attacks-public-procurement-processes Whilst encouraging small and medium size enterprises there are a number of worrying counter points to the political suggestions (it should be noted that only one other country in the article is in Europe and subject to OJEU regulations): Quicker procurement versus the need for due diligence Breaking down bigger contracts versus reducing the supplier base and reducing costs. With government departments struggling to manage contract delivery increasing the number of contracts presents the very real potential to exacerbate the problem. The article raises a very interesting point regarding the ownership of IP.  The government departments should be taking a much more individual and relevant approach to the ownership of IP and when it applies. What is absolutely spot on is the need to imp...

An article from Supply Management by Tom Alford of PPP Management on target cost pricing http://www.supplymanagement.com/analysis/features/2013/on-target/ We might be biased but this is a great article.  If you think so then you'll appreciate our forthcoming articles on incentivisation and the inextricable links between procurement and contract management