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![Page 1: Procurement Contracts San Antonio, TX February 24, 2009 Supplier Relationship Management Product User Group Conference.](https://reader031.fdocuments.net/reader031/viewer/2022012918/56649d9e5503460f94a87fdd/html5/thumbnails/1.jpg)
Procurement Contracts
San Antonio, TXFebruary 24, 2009
Supplier Relationship Management
Product User Group Conference
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Presented by:
Gail Driskell
Sr. Buyer, System Development
City Utilities of Springfield, MO
Procurement Contracts
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Contents
Company Overview Company Procurement Statistics Procurement Contracts
– Why we use Contracts– Contract Types– Contract Releases
Favorite Modifications Questions
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City Utilities of Springfield, MO
Municipal utility located in Springfield, MO Provide electric, water, natural gas,
transportation and telecommunications services Serves 108,000 electric customers Serves 82,000 gas customers Serves 80,000 water customers 1000 Employees 2008 Operating Revenues of $393 million Service area of 320 square miles
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City Utilities and PeopleSoft
Financials– General Ledger– Asset Management– Project Costing– Accounts Payable
Implemented version 6.0 in 1997 Upgraded to version 8.0 in 2003 Upgraded to version 8.8 in 2005 PeopleTools Version 8.49.10
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City Utilities and PeopleSoft
HRMS– Base Benefits– Human Resources– Payroll for North America– FSA Administration
Implemented version 7.0 in 1998 Upgraded to version 8.0 in 2001 Updated version to 8.8 in 2008
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City Utilities and PeopleSoft
Supplier Relationship Management– Purchasing– eProcurement– Strategic Sourcing– eSupplier Connection– Inventory
Implemented version 8.8 in 2006 PeopleTools Version 8.49.10
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Procurement Statistics
Centralized Purchasing Department – 7 Buyers– 3 Support Staff– 3 Management – 1 System Support
790 active Contracts 13,670 POs issued in 2008
– 5,970 regular POs (not contract releases)– 7,700 released POs (contract releases)
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Procurement Statistics
Inventory Statistics– 35,245 active Inventory Items in the Master Item Table– 15 Inventory Business Units– 6 Inventory Storerooms
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Why we use Contracts. . .
Already a part of our Business Process culture Large number of repetitive purchases for
inventory items Saves time – eliminates the need to bid each
time Gives our end users flexibility to order items as
they need them Use contracts for inventory items, non-
inventory items, services, maintenance agreements, etc.
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Why we use Contracts. . .
Fixed pricing for specified time period with options to renew
Notification process to alert when nearing expiration
Notification process to alert when nearing contract maximum amount
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Responsibilities
End user creates requisition for the goods or services they want on their contract
Purchasing responsible for bidding, setting up and awarding the contract
End user administers use of the contract by creating releases as needed.
End user receives contract notifications for expiration and maximum amount
Buyer makes any needed adjustments to contract -- price changes, renewals, maximum amount increases, etc.
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Procurement Contracts
PeopleSoft Delivered Contract Process Options– General Contract– Prepaid Voucher– Prepaid Voucher w/ Advance PO– Purchase Order– Recurring PO Voucher– Recurring Voucher– Release to Single PO only
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Contract Types
City Utilities’ Contract Types– Fixed Item
Inventory Replenishment Releases
– Open Item– Agreement (also a Fixed Item)
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Fixed Item Contracts
Contract contains specified line items Contract is valid for a specified amount of time. Our pricing for the line items is fixed for the length
of the contract. End user creates releases as needed No additional approval step for releases Scheduled PO Auto Sourcing process runs every
30 minutes to create the PO from staged releases POs created in approved status Scheduled PO Dispatch process runs every two
hours
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Inventory Item Releases
Two Options to create release for inventory items– Manually by releasing directly from the Contract– Automated via Replenishment, Req Loader and
PO Auto Sourcing
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Automated Inventory Item Releases
Replenishment is ran daily and suggests the inventory items that need to be re-ordered
Inventory personnel review the replenishment and make any needed adjustments to the suggested quantities– Neat customization we recently added was
the ability to add an item to the replenishment
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Automated Inventory Item Releases
Inventory Supervisor reviews the replenishment and approves it by running REQ Loader to create a requisition.
Inventory Supervisor runs PO Auto Sourcing– inventory items that are on a contract get
automatically sourced to a PO – approved status.
Scheduled PO Dispatch runs and dispatches the created POs.
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Custom Replenishment Report
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Open Item Contracts
No line items listed on contract Contract is valid for a specified amount of time Pricing for goods and services is usually contained in
separate rate sheet, a % discount pricing structure, etc.
End user enters a requisition describing the good/services they are releasing
Price entered on requisition line becomes the PO Price for that line
Requisition is linked to contract by Vendor ID, Contract ID
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Open Item Contracts
Remove RFQ Required Flag Requisition goes through normal workflow approval Scheduled PO Auto Sourcing process runs every 30
minutes to create the PO from staged releases POs created in approved status Scheduled PO Dispatch process runs every two hours Released amount goes against Contract Maximum
Amount
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No lines specified on the contract.
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Enter requisition line – describing the good or service being released, quantity and price.
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Go into the Line Details page.
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Line Details – Enter Vendor ID, Contract ID, and remove RFQ Required flag.
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Saved and submitted requisition then goes through normal requisition approval workflow process.
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Agreement Contracts
One or more line items on the contract Contract is valid for a specified amount of time Use for contracts that are not conducive to multiple
releases – i.e. software/hardware maintenance Usually 1 LT or amount only type purchases Buyer issues one release for full contract amount The PO created from the release is used for processing
one or more payments during the term of the contract Advantage is receiving the Contract Expiration
notice.
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Favorite Modifications
CU Contract Type Do Not Release Flag Contract Thresholds – Notify Person Release Comments Release Header Defaults Releases over Contract Maximum Contract Notifications
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CU Contract Type
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Do Not Release Flag
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Do Not Release Flag
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Contract Thresholds
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Release Comments
Enter free-form text information about this release. These comments are used as release reminders and remain with the contract. They do not carry over to the PO. You can review
and modify these comments on the Review Staged Releases page.
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Release Comments
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Release Header Defaults
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Release Header Defaults
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Releases over Contract Max
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Releases over Contract Max
Remember our remaining amount was $1031.18
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Releases over Contract Max
End User goes ahead and saves their staged release. We removed any validation against contract maximum and remaining amounts that was associated with the Save. Instead, we added some custom code in the PO Auto Sourcing process that compares the total release amount against the contract’s remaining amount.
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Releases over Contract Max
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Releases over Contract Max
Email that is triggered . . .
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Releases over Contract Max
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Releases over Contract MaxAfter making adjustment to the Contract Maximum Amount, the Buyer accesses the PO and unchecks the Hold Flag. PO is then eligible for PO Dispatch.
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Contract Notifications
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Contract Notifications
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Contract Notifications
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Contract Notifications
Problems we encountered . . .– Requestors were not good at checking their worklist– Notices did not indicate whether it was contract
expiration or max amount notice.– Notices were only sent to worklist one time– Contracts were expiring before we had a chance to
renew– POs would error in PO auto sourcing process due to
Contract Max being exceeded.– Had to manipulate Contract Max amount and
percentage for Agreement type contracts
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Contract Notifications
Our Solution . . .– Changed notices from worklist entry to an email– Process still runs weekly, but if the contract still
meets the criteria the following week, then another email is sent -- the User quickly gets the picture to take action!
– Different emails are sent depending on: How close the contract is to the expiration date If the contract is nearing the maximum amount What type of contract
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Contract Notifications
Email notices – 90 Day Notification – email sent to Contract
Requestor – all Contract Types– 30 Day Notification – email sent to Contract
Requestor AND the Contract Buyer – all Contract Types
– Nearing Contract Maximum Amount – email sent to Contract Requestor – all Contract Types EXCEPT Agreement Contracts
– Nearing Contract Expiration and Contract Maximum Amount
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Contract Notifications
90 Day Notification
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Contract Notifications
30 Day Notification
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Contract Notifications
Nearing Contract Max
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Contract Notifications
Nearing Expiration and Contract Max
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Contract Notifications
When Buyer is contacted by the Requestor to take action to renew or rebid, Buyer will . . .– Drop the notify days down to 1
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When Buyer is contacted by the Requestor to take action to renew or rebid, Buyer will . . .– Drop the notify days down to 1– Renew or Rebid the Contract– After renewing the Contract, Buyer resets the
notify days back to 90 days.
Contract Notifications
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Summary
Introduced City Utilities of Springfield, Missouri Why we use Procurement Contracts Contract Types Contract Release Process Some of our Favorite Modifications
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Procurement Contracts
Questions?
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Contact Information
Gail DriskellSr. Buyer, System Development
City Utilities of Springfield, MO
Email: [email protected]