purchasing directors’ meeting may 13, 2004. 2 purchasing directors’ meeting may 13, 2004 agenda...
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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
3
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
4
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
5
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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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
9
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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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
11
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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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
16
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
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
Auctions
FormCross-
Functional Sourcing
Teams
Develop
Measure Results & Trends
High-Data
Collection & Analysis
Fast Track to Value
Segment Purchases
Validate & Profile
Category
Conduct Industry Analysis
Build Total Cost of
Ownership Model
Develop Category Strategy
Conduct Vendor Analysis
Build Vendor
Selection Decision
MatrixConduct Auctions
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
-
FormCross-
Functional Sourcing
Teams
Develop Vendors
Measure Results & Trends
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
4
2 1
3
• # 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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6
7
8
1
2
3
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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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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
24
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’ 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
26
Purchasing Directors’ MeetingNext Meeting
Time: 3:00 pm to 5:00 pm
Date: Thursday, June 10, 2004
Location: Department of Corrections
Blairstone Road