1

PRESENTATION

SPL (added) value

ST WORKSHOPApril 2003

T. Lagrange SPL

2

ADDED VALUE FOR WHO?

• PROBLEM: WHAT IS PERCEIVED AS ADDED VALUE FOR SOME IS NOT FOR OTHERS

• Some: CERN, division, management, audit, delegations and YOU.

3

WHAT ADDED VALUE

• Administration and logistics

• Savings

• Adherence to the rules (watchdog)

• Negotiations

• Drafting of text

• Legal aspects

• Follow up

4

ADDED VALUE FOR YOU

• Administration and logistics (tax)• Drafting of text• Legal aspects• Credibility

• Savings ?• Adherence to the rules ????

• Negotiations?• Follow up

5

The procurement cycle Identify the

 Need Define the

Requirement

Identify Potential

Suppliers

Invite Supplier Offers Agree Prices

and Terms Assess Supplier

Offers

Contract

Manage Performance

6

Follow Up

• Everything goes well >

• Everything does not go well– Risk assessment

– Claims

– Relation with contractor

– performance

7

• PURCHASING IS AN UNCERTAIN BUSINESS AND SO IS CONTRACT FOLLOW UP

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RISK

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Risk is function of

• Likelihood (will it happen)

• Consequences (what if it happens)

• Horizon (when will it be visible)

• => Impact

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The Risk Matrix

Contingency

Plan

Constant

Management

Run the

Risk

Nuisance

Value

Impact

Hi

Lo

Lo Hi

Probability

11

Power in the Purchasing Process

Time

Power

Normality line

IT Order Receive Pay

12The cost of dealing with problems rises exponentially

Forcing the Options

Early LateStage in the Business Cycle

Cost

13

Relation with contractorStockholm Syndrome

14

The Energy & Attitude Model

Spectators

Walking dead Cynics

?

15

Courtship&Engagement

The Relationship default

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Performance

17

A matter of Performance

100

95

85

80

75

70

65

60

55

50

Target 99.5%

Actual95.0%