Supplier Management & Procurement Strategies for Facility...

Supplier Management & Procurement Strategies for

Facility Managers

Vision StatementThe FMCC is the resource and voice for Facility

Management Consultants worldwide to leverage

our collective expertise to benefit IFMA members,

and the Facility Management profession.

Mission Statement

To serve as a global Facility Management

consultants' resource and representative for

Knowledge Sharing, Networking and Business

Opportunities in support of our impact upon the built

environment and value to their clients..

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Todays Presentation

Moderator:

Josh Amos, IFMA Components Liaison

Presentation Title:

Supplier Management & Procurement Strategies for

Facility Managers

Presenter(s): Tim Schmidt eBid Systems

Presentation Logistics

Polls will be used throughout the webinar

Q&A at the end of the presentation

Quick survey at the conclusion of the Webinar

PowerPoint & Recorded Webinar will be

available online via FMCCs Website

(fmcc.ifma.org)

Your Participation is Greatly Appreciated!

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Silver SponsorsInterested in Sponsoring

FMCC? Contact [email protected]

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Learning Objectives

1. What is Strategic Sourcing

2. How to apply Strategic Sourcing to facilities

management

3. Tactics for addressing common Strategic

Sourcing goals

4. Improve the bottom line with Strategic Sourcing

Presenter Bio Background in procurement and technology

Sourcing technology expert

Participated in hundreds of sourcing events

over 20 years

Participant Poll #1

To what extent is procurement part of your job?

Procurement is my main job responsibility.

I perform procurement functions as part of my job.

I oversee procurement activities of others.

I am involved with procurement but have no procurement

responsibilities.

Procurement is not part of my job.

Participant Poll #2

What best describes your approach to facility

management?

Manage facilities for company-owned rental properties.

Manage facilities for company-used commercial

properties.

Outsourced facility management provider.

Other type of service provider.

None of the above.

What is Strategic Sourcing?

Strategic sourcing is an institutional procurement process

that continuously improves and re-evaluates the

purchasing activities of a company.

Strategic sourcing techniques are also applied to

nontraditional areas such as services or capital.

The goal of the strategic sourcing process is to lower costs,

improve quality, and reduce risks.

Steps to Strategic Sourcing

Analyze current spend and supply sources

Categorize suppliers

Implement appropriate sourcing strategies

Execute sourcing strategy

Step 1: Analyzing Spend

Get spend detail from accounting

Group spending into broad categories

Look for:

What are the largest categories of spend?

How many different suppliers per category?

What are the pricing variations for the same product or service?

Create list of target areas for improvement

Step 2: Categorize Suppliers

Categorize suppliers by risk impact on facility

Downtime

Occupational hazards/safety

Liability

Loss of business opportunities

Categorize suppliers by cost impact on facility

Cost does not equal expensive

Cost does not equal price

Kraljics Portfolio Purchasing Model

Risk Impact

Co

st Im

pac

t


Risk Impact

Co

st Im

pac

t

Routine Suppliers

Large product varietyLow value per productHigh labor transaction costs


Risk Impact

Co

st Im

pac

t

Strategic Suppliers

Critical for product s cost priceDependent upon supplier

Routine Suppliers



Risk Impact

Co

st Im

pac

t

Leverage Suppliers

Many competitorsCommodity products/servicesLow switching costs

Strategic Suppliers


Routine Suppliers



Risk Impact

Co

st Im

pac

t

Leverage Suppliers


Strategic Suppliers


Routine Suppliers


Bottleneck Suppliers

Relatively low valueFew alternativesMonopolistic markets

Step 3: Identify Procurement Strategies

Use the Kraljic Portfolio Procurement Model

Blanket PO

Competitive Bidding

Partnerships

Secure Supply

Contrast with current processes

Kriljics Procurement Strategies

Routine Suppliers


Risk Impact

Co

st Im

pac

t

Blanket PO / eProcurement


Strategic Suppliers


Routine Suppliers


Risk Impact

Co

st Im

pac

t

Partnership



Leverage Suppliers


Strategic Suppliers


Routine Suppliers


Risk Impact

Co

st Im

pac

t

Competitive Bidding / eSourcing Partnership



Leverage Suppliers


Strategic Suppliers


Routine Suppliers



Relatively low valueFew alternativesMonopolistic markets

Risk Impact

Co

st Im

pac

t

Competitive Bidding / eSourcing Partnership

Blanket PO / eProcurement Secure Supply + Find Alternatives

Step 4: Execute Sourcing Strategy

Develop goals for each supplier segment/spend

category

Develop tactics for each goal

Continuously assess suppliers and strategy

Use technology where appropriate

Common Sourcing Goals

Routine Suppliers

Reduce number of suppliersAutomate transactions

Risk Impact

Co

st Im

pac

t


Strategic Suppliers

Marry the suppliers daughter

Routine Suppliers


Risk Impact

Co

st Im

pac

t


Leverage Suppliers

Compete projects over $10,000Eliminate non-performing suppliersImplement central vendor database

Strategic Suppliers


Routine Suppliers


Risk Impact

Co

st Im

pac

t


Leverage Suppliers

Compete projects over $10,000Eliminate non-performing suppliersImplement central vendor database

Strategic Suppliers


Routine Suppliers



Identify new part supplierReplace proprietary equipment

Risk Impact

Co

st Im

pac

t

Tactic 1: Supplier ID and Prequalification

Centralize supplier (and potential supplier) information

Implement multi-dimensional supplier prequalification

Financial

References

Verification of licenses and insurance

Implement public supplier registration

Tactic 2: Competitive Sourcing

Requests for Proposal (RFP)

Multi-dimension decision process

Performance based criteria

Focus more on what rather than how

Scored responses

Request for Quote (RFQ)

Most common for commodity items

Focus on what

Include all cost dimensions

Use prequalification process

Guidelines For Competition

Develop specifications not based upon single suppliers

capabilities

Define objective supplier criteria before sourcing event

Share the selection criteria

Set a reasonable deadline for all suppliers

Share Q&A with all suppliers

Do not share bid information with suppliers until after the

award

Do not negotiate with lower scoring supplier without

giving favorably scored supplier the same opportunity

Stick to your own rules

Tactic 3: Supplier Assessment

Periodically evaluate the quality of suppliers

Define Key Performance Indicators (KPI)

Invite different stakeholders to score suppliers on KPI

Create a place for people to log relevant supplier

information

Make results available to decision makers

Periodically evaluate performance for each supplier

segment

Supplier Assessment Example

Tactic 4: Use Appropriate Software Supplier Management

Central vendor information

Supplier approval

Tracking Key Performance Indicators (KPI)

eSourcing Automate sourcing processes

Ensure competition

Reporting and feedback

eProcurement Catalog purchasing

Verified pricing agreements

Automated transaction processing

eBid eXchange Supplier Management

Central Vendor DB Self-maintained

Custom fields

Vendor approval

Central supplier notes

Track performance

eBid eXchange eSourcing

RFx Management RFx Templates

Notifications

Q&A Mgmt

Document Mgmt

Online Bid Submission

Automated Tabulation

Bid Scoring

Vinimaya eCatalog

Review Learning Objectives

1. What is Strategic Sourcing

2. How to apply Strategic Sourcing to facilities

management

3. Tactics for addressing common Strategic

Sourcing goals

4. Improve the bottom line with Strategic Sourcing

Q&A

Tim Schmidt

+1 (206) 855-8430

[email protected]

www.ebidsystems.com

mailto:[email protected]://www.ebidsystems.com/

Dont Forget to Register for the next webinars:

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W.E.

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Council

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Council

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Council

Utilities Council

To learn more visit http://ifma.org/community/industry-councils

http://ifma.org/community/industry-councils

Thank you for joining us!

Please take a moment to answer our brief survey at the conclusion of the webinar.

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