Purchasing Directors’ Meeting May 13, 2004. 2 Purchasing Directors’ Meeting May 13, 2004 Agenda...

Purchasing Directors’ MeetingMay 13, 2004

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Purchasing Directors’ MeetingMay 13, 2004 Agenda

• Welcome / Meeting Overview

• How Are We Doing?

• Open Floor / Strategic Issues for Upcoming Year

• Florida Government Conference

• Center for Efficient Government

• Strategic Sourcing

• Operations Update

• Next Meeting Location / Time

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DMS/State Purchasing Mission

DMS Mission

To be a customer focused agency providing effective and efficient services in order to better enable state agencies and employees to deliver the Governor’s priorities to the people of Florida.

State Purchasing Mission

To gladly deliver useful and innovative purchasing services in order to be a customer focused agency providing effective and efficient customer services.

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State Purchasing FY 03-04 Mission Tasks

FY 03-04• Amend purchasing statutes• Amend purchasing rules• Improve contract management• Reorganize division• Deliver state term contracts that provide the right commodities

and services at lower cost• Consolidate purchasing into MFMP• Training for division• DMS customer satisfaction survey• Support Facilities’ ITNs

Upcoming Year?

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State Purchasing Mission Goals (Measures)

FY 03-04• Purchasing statutes and rules improved before May 2004

• Recruit at least four employees highly esteemed by their peers before October 2003, and reduce annual turnover by 50%

• Increase customer satisfaction by at least 15% before January 2004

• Successful delivery of innovative purchasing solution that reduces costs and saves time – MyFloridaMarketPlace adopted by all initial users before July 2004

Upcoming Year?

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Florida Government ConferenceSeptember 21-23, 2004

• Co-sponsored by DMS and the FSU Center for Professional Development

• Combines the Government Expo and the Government Technology Conference

• Send purchasing-related program ideas and requests to [email protected]

• See www.floridagc.com for more information

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Governor’s Center for Efficient GovernmentOversight Board

• Secretary Bill SimonDepartment of Management Services

• Dr. Jim ZingaleDepartment of Revenue

• Secretary José Abreu Department of Transportation

• Dr. John AgwunobiDepartment of Health

• Director Susan PareigisAgency for Workforce Innovation

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Governor’s Center for Efficient GovernmentInitial Goals

• Develop statewide outsourcing standards and a business case template applicable to any proposed outsourcing project.

• Review existing outsourcing plans within the state agencies to ensure compliance with Center standards and business case, execution of effective contract language with vendors and implementation of successful change management.

• Propose for the Governor’s consideration by July 1 an initial list of specific outsourcing projects and initiatives that can be developed over the next 3 years.

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Business Case

Gate 1

Procurement

Gate 2 Gate 3 Gate 4

Change Management

Contract Management

Post Implementation

Governor’s Center for Efficient GovernmentProject Gate Management Process

Stage 1 Stage 4 Stage 5Stage 3Stage 2

Monitor

Current Projects

New Projects

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Center for Efficient GovernmentRecent Developments

• Business Case Standards Published Next Week

• Developing On-line Resource Center

• http://dms.myflorida.com/administration/

center_for_efficient_government

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Strategic Sourcing Methodology

Source: Accenture Best Practices

Fast Track to Value

Validate & Profile

Category

Conduct Industry Analysis

Build Total Cost of

Ownership Model

Develop Category Strategy

Conduct Supplier Analysis

Build Supplier Selection Decision

MatrixConduct Auctions

Complete Prepare Fact-

Based Negotiation “Packages”

Negotiate Value

Propositions

Category Profile

Industry Profile

TCO Model

Category Strategy

Value Propositions

Benefits Realization

Develop

Measure Results & Trends

High-Level Data

Collection & Analysis

Fast Track to Value

Segment Purchases

Validate & Profile

Category


Build Total Cost of

Ownership Model


Conduct Supplier Analysis

Build Supplier Selection Decision


Complete Prepare Fact-

Based Negotiation “Packages”

Negotiate Value

Propositions

Auctions

FormCross-

Functional Sourcing

Teams

Develop


High-Data

Collection & Analysis

Fast Track to Value

Segment Purchases

Validate & Profile

Category


Build Total Cost of

Ownership Model


Conduct Vendor Analysis

Build Vendor

Selection Decision


Complete ITB/ITN/

RFQ/RFP

Develop Value

Proposition Around Options

Make Award

Decision

In-ScopeCategories

CFSTs(Cross-FunctionalSourcing Teams)

Selection Decision Matrix

ITB/ITN/RFQ/RFP

Continual Vendor

Improvement

Profile Internally & Externally

Develop Strategy

Screen Suppliers &

Selection Factors

Conduct Auctions &

Shape & Negotiate

Value Propositions

Implement AgreementsAssess

Opportunities

Profile Internally & Externally

Develop Strategy

Screen Suppliers &

Selection Factors

Conduct Auctions &

Shape & Negotiate

Value Propositions

Kick-Off &

Profile Internally

& Externally

Develop Strategy

Develop Selection Factors &

Screen Vendors

Conduct Competitive

Event

Prepare Value

Proposition & Award

Implement Agreements

Kick-Off & Assess

Opportunities

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FormCross-

Functional Sourcing

Teams

Develop Vendors


ToolsAriba ContractsAriba Analysis

Ariba Sourcing

Ariba Sourcing

Ariba Contracts

Ariba Analysis

Award Decision (ITA)

Ariba Analysis

Typical Deliverables

Key Worksteps

- and / or -

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Ease ofImplementation

Benefit Potential

Difficult

Easy

HighLow

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• # of Agencies• # of STCs• STC Penetration %• Competitive Demand• Vendors = 80% Spend• Sourceability

• Sourceable Spend• Savings Potential

•Food Services - $0.09

•Other Construction - $0.7

•Medical Equip. - $2

•Agricultural Supplies - $18

•Structures - $1,671

•Building & Fixed Equip. - $44

•Engineering Svcs. - $585

•Motor Vehicles – Other - $3 •Motor Vehicles – Passenger - $33

•Other Prof. Svcs.-$11

•Food Products - $67

•Temp. Employment - $16

•Property Svcs.- $5

•Building/Const. Material-$23

•Medical Supplies - $183

•Medical Svcs. - $75

•Const. Svcs. - $199

•IT Software-$23

•Janitorial Supplies & Services-$24

•Office Machinery-$14

•Fuel-$21•Financial & Insurance-$90

•Utilities-$71•IT Svcs.-$150

•Legal-$48

•Other Rental Equip.-$3

•Telecom-$153

•Printing-$20

•IT Hardware-$73

•Office Supplies-$33

•Consulting Svcs.-$214•Advertising-$98

•Travel-$21

•Postage&Freight-$35•Furniture&Equip.-$72

•Prof. Dev.-$28

•MRO Services-$185

•MRO Materials-$87

•Ind. Contractor NEC- $1,360

($) = Spend in millionsSource: FLAIR data extract FY 01-02

Strategic SourcingPreliminary Prioritization Matrix

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Wave Spend Category Estimated Potential Annual Savings %

from Addressable Spend Office Consumables 25%MRO Material 3%Printing 3%Facility Services 8%Furniture & Equipment 6%Travel 7%Telecom 11%IT Hardware 9%Office Machinery 8%Motor Vehicles - Passenger 8%Motor Vehicles - Other 8%Food Products 10%Medical Supplies 10%Financial & Insurance 4%Building And Fixed Equipment 10%IT Software 10%Medical Services 5%Postage & Freight 6%Advertising 4%Temporary Employment Services 10%Fuel 6%Construction Services 6%Legal 4%Average 8%

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Strategic SourcingPreliminary Approach and Projected Savings

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Strategic SourcingWaves 1 and 2

Office ConsumablesDMS – Tom Butler

MRO MaterialsDMS – David Comer

PrintingDMS – Charles DayDORDOHDCFDHSMV

Facility ServicesDMS – Chuck BeallDOTDOHDJJ

Medical SuppliesDMS - Susan BarrDOHDCFDOC

Uniforms/Officer EquipmentDMS – Mark LovellDHSMV DOTDEP FDLEFWCC DOC

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Strategic SourcingOther States’ Approaches

DE: Furniture, Office Supplies, Packaged Food, Janitorial Supplies, Paper, Copiers, Electrical Supplies, Uniforms, Lab Supplies, IT Hardware, Software, LD Telephone Service, Cell Phone Service, Network Services

CT: Police Cruisers, Office Supplies, Office Equipment, Trash Hauling, MRO, Food Service, IT Service, Pharm., Advertising, Printing

PA: Cleaning, Autos, IT Hardware, IT Hardware Maintenance, Software, Copiers, Furniture, Supplies, Food, Roadway Materials

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Strategic SourcingImplementation Criteria

• Multiple agencies involved

• Status of current STC

• Current and future spend is anticipated to be large enough to warrant resources/effort

• Top spending agencies are willing and able to devote resources to support process

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Strategic SourcingWave 3 and Beyond?

IT Hardware

IT Software

Fleet

Other?

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Operations Update

• New Bureau Chief – Don Poorman

• State Purchasing Agreement for Quick Copy

• Summer Hours

• Legislative Update – **SB 1678 enacted (public records)**– HB 1898 not enacted (ch. 287 overhaul)– HB 1533 not enacted (in-state residents on service contracts) – HB 1211/SB 2756 not enacted (privatization and oversight)

• Training Update

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Purchasing Directors’ MeetingNext Meeting

Time: 3:00 pm to 5:00 pm

Date: Thursday, June 10, 2004

Location: Department of Corrections

Blairstone Road

Purchasing Directors’ Meeting May 13, 2004. 2 Purchasing Directors’ Meeting May 13, 2004 Agenda...

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Transcript of Purchasing Directors’ Meeting May 13, 2004. 2 Purchasing Directors’ Meeting May 13, 2004 Agenda...