13 Steps Flashcards
Define Business Needs and Develop Specification
Involve cross-functional stakeholders to give a wide range of expertise to develop comprehensive high-level specification
Engaging stakeholders at this early stage means they will support the change process where stakeholder buy-in is required.
Consider:
Sustainability
Innovation.
Specification development
Market analysis and make or buy decision
Scoping out your spend and current positioning and dynamics of the marketplace help you identify potential suppliers and degree of competition.
Analyse on make / buy / outsource
Develop the
Strategy and Plan
Conducting a competitive tender is a good idea if there is competition and you are well positioned to leverage the market.
Developing competition in the marketplace or bringing in house may be a better strategy if you are reliant one one sole source of supply
Pre- Procurement
Market Testing
Conducting Market testing or a strategy test will help to identify if it is the right time to go into the marketplace.
Consider other factors such as crop cycles, competitor activity, supplier’s end of financial year or new legislation.
Develop
Documentation
and Detailed
Specification
To include detailed breakdown of the volumes, service level agreement and terms and conditions.
Created detailed specification to ensure consistency on pricing, product, quality and functionality. Ensuring fit for purpose and reducing financial impact of wrong specification.
Distinguish between product requirements and preferences, as well as any tolerances.
Possibly include stakeholders
Supplier
Selection to
Participate in
Tender
Request for Information (RFI) - Help gain insights of suppliers size, capabilities, financials, strengths and weaknesses.
Assessing the criteria can help determine if they should proceed to request for quotation (RFQ)
Ranking performance qualifies against business needs with key stakeholders is a useful exercise.
Issue Tender Documents
Send an Invitation to Tender (ITT) and Request for Quotation (FRQ) to selected supplier to participate.
Include detailed specification and documentation developed around the business requirements along with timescales to respond.
Bid and
Tender
Evaluation and
Validation
Validation against pre-defined award criteria - Helps identify offering the best value for money (VFM) and select preferred supplier.
Ensure the evaluation is structured, disciplined and transparent. Compare price against technical capability, capacity, quality and financial health.
Post tender negotiations often take place, with references and credit checks, or site visits and audits.
Consider whole life costs, decommissioning, removal, or disposal
Contract Award and
Implementation
Once supplier has been selected a contract is awarded. This allows both parties to understand their obligations, and is foundation to manage agreement.
Sets out clear timescales and parameters on both sides, including stakeholders, and management.
Warehouse,
Logistics and
Receipt
Warehouse operations need to be considered to ensure smooth and efficient process.
Product coding and classification.
Space, layout and racking
Frequency of deliveries.
Contract
Performance and
Improvement
Performance should be measured against Key Performance Indicatiors (KPI)
- Set out in contract
- Should involve discussions how relationship is working and resolve conflicts and agree actions.
- Discuss plans for continuous improvement and set out next review.
Supplier
Relationship
Management
Reviewing your portfolio of suppliers and establishing right level of input to develop the relationship and achieve specific objective.
- Time dedicated depends on strategy, type of purchase, length of contract and marketplace.
- Helps create relationship and environment in which to work on new innovative developments and streamline processes.
- Can be difference between being first to market with new concept or ensuring continuity of supply
Asset
Management
Assessments should be carried out to determine if business requirements have changed. If the agreement is still fit for purpose, what can be learnt from the process and how improvements can be incorporated next time.
Restarts cycle. Consider end of life costs.
