TMD Supply Chain

Consultancy ltd

Delivered by

Rob Thompson

1TMD- Sustainable Procurement Solutions02/12/2011

TMD Supply Chain

Consultancy ltd

Your Speaker

2

Rob Thompson

30+ years Procurement ExperienceWorking in

Afghanistan, Angola, Azerbaijan, Sudan, UAE, Papua New Guinea, Indonesia, China, Most European Countries,

Sectors:Central & Local Government Oil & GasEnvironmentHealthFoodWaste Management

02/12/2011 TMD- Sustainable Procurement Solutions

TMD Supply Chain

Consultancy ltd

International Best Practice on Professionalizing Procurement

The current progress and the state of the art international procurement

Supply Chain Management

Criteria that a procurement practice is categorized as a professional

International trend on professionalizing procurement given the extent of the use of technology such as software, IT, e-procurement, etc

Recommendation on steps that should be taken to professionalize procurement in Indonesia.

02/12/2011 TMD- Sustainable Procurement Solutions 3

The Procurement Role In The 10’s

Major business role

Control of

communications

Partnering/Alliance

PPP/PFI

Risk Assessment &

management

Project & Contract

Management

Vendor appraisal and

analysis

Strategic commodity and

supplier management

Acquisition cost analysis

Maximise competition

Direct negotiation

Flexible contracts

Right first time - just in

time

Management by

objectives

TMD- Sustainable Procurement Solutions

TMD Supply Chain

Consultancy ltd

Strategic issues in Supply Chain Management

Organisation

Structure

Supply Chain

Strategy

Information

technology

Marketing

Strategy

Product

Strategy

Operations

Strategy

Matrix

Co-located

Centralised

Process

owners not

functions

Number of

tiers?

Tier one

Skills

Nature of

Relationships

Procurement

Skills

ERP

CRM

EDI

ETF

Demand

forecasting

Information

flow to

supply

base?

Mass

customised

Distribution

channels

Channels

to market

Make or

Buy

Core

competency

Location

with respect

to markets

and

customers

Stock policy

Use of TQM

JIT

Kanban

Supply Chain

Management

TMD Supply Chain

Consultancy ltd

Supply Chain Design Size and Complexity

How many internal customers, Where are they?

Who are the most important

Suppliers, where, how many, how important?

Logistics / Transport Modes Speed reliability and flexibility needed

Value / cost

Warehousing Location, Efficiency

Systems Security & Accuracy of Information

Ease of use & Means of transfer

Level of transparency

TMD Supply Chain

Consultancy ltd

Supply Chain FacilitatorsWell chosen and Pro-active suppliers

Stable Long term trusting relationships

Internet capability

Complex planning and forecasting tools

Reliable data

Willingness to share confidential information about products and DEMAND

High quality procurement staff

TMD- Sustainable Procurement Solutions

TMD Supply Chain

Consultancy ltd

Re-Designing Supply Chain Processes

Harmonise

Standardise

Rationalise

Electronic

Supply Chains

•On-Line Trading

•Inter-Connectivity

of Systems

•EDI/EFT

•Transaction Processing

Centre

•On-Line Catalogues

•Empowered

Procurement

•Internet/Intranet

•Efficient Performance

Response times

Challenge

Low Value

Activity

•Outsource non-core

Work

•Create Preferred

Suppliers

•Implement Supplier

Planning

•Create Supplier

self-monitoring

programmes

•Integrated logistics

management

•Procurement cards

•Product/Services

•Logistics Management

•Integrated Demand

and System support

•Integrated Process

Design

•Close Supplier

Involvement

•Supply base

Reduction

TMD Supply Chain

Consultancy ltd

Future of SCM

„Mass Customised‟

value proposition based

Mass Production

Standardised efficient

offerings

Single Enterprise

Vertically and horizontally

integrated

Multiple Enterprises

Vertically and horizontally

integrated

Ford

FocusDram

Motor

Manufacture

Furniture

Makers

Consultant

Iron

and

Steel

Agrochemicals

Outsourced

services

IT FM

Customer

Relationship

Management

Digital Workplace

Knowledge

Management

Lean Supply

E- Commerce

Supply Chain

Management

ERP

SAP

Local Global

TMD Supply Chain

Consultancy ltd

SMART Procurement Specific,

Measureable,

Achievable,

Realistic

Time Bound

A through-life, evolutionary requirements process,

Integration of all stakeholders requirements

Facilitate the sustainable delivery of affordable and

effective procurements

Focus on the needs of the users

Define “Whole Life” need not just “Capital Cost”

10TMD- Sustainable Procurement Solutions

TMD Supply Chain

Consultancy ltd

Procurement Initiatives Commodity Management

Comprehensive Demand and Supply MIS Systems

Fraud & Anti-Corruption Controls

Global Sourcing

VA/VE

Supply Chain Partnerships

Supplier Development Programmes

Consolidated Demand Management

Environmental Impact Analysis

Value Chain management

02/12/2011 TMD- Sustainable Procurement Solutions 11

TMD Supply Chain

Consultancy ltd

Where Does Procurement fit in an Organisation? Transactional

Operational

Strategic

Value or Cost measured?

Key questions

What value does procurement bring to an organisation?

Why should an organisation need professional procurement?

What do your customers want from you?

02/12/2011 TMD- Sustainable Procurement Solutions 12

TMD Supply Chain

Consultancy ltd

Core Requirements for Professional Status

A common functional role definition and organisation status structure

A specific, standard and comprehensive competency profile

By grade, function, activity.

An Academic and Practice based assessed qualification

Recognition as the source of innovative and creative solutions and practical advice within the specific field

02/12/2011 TMD- Sustainable Procurement Solutions 13

TMD Supply Chain

Consultancy ltd

Performance Standards How does procurement add value to the

organisation?

Administration?

Savings?

Risk Management?

Contribution to overall corporate strategy and performance

02/12/2011 TMD- Sustainable Procurement Solutions 14

TMD Supply Chain

Consultancy ltd

Trends in Professionalising Procurement

Consistency in determining and demonstrating Value contributions from procurement intervention

Co-ordinated and integrated hierarchy of Procurement contracting

Creation of a Central operational procurement lead body

Common competency and capacity standards

Application and wider utilisation of technology to regularise and manage procurement activities

Application of strategic and collaborative sourcing

02/12/2011 TMD- Sustainable Procurement Solutions 15

TMD Supply Chain

Consultancy ltd

Next Steps Implement common and comprehensive MIS

Agree and implement Formal and integrated functional structures, roles and responsibilities

Develop, introduce and consistently apply common processes

Introduce a formal competency based qualification for procurement staff

Identify and apply internal benchmarking across the function

Integrate Inventory Management into the procurement strategy.

Develop and apply risk management principles to procurement

Develop, apply and communicate the value contribution procurement makes to government service provision.

02/12/2011 TMD- Sustainable Procurement Solutions 16

Thank You Rob Thompson:

TMD Supply Chain Consultancy LtdFriars Mead, Grafton Flyford

Worcestershire WR7 4PG England

robthompson@tmdconsultancy.com+44 7976 365054

02/12/2011 TMD- Sustainable Procurement Solutions 17