Presented by: Sheila Finn, CPP, FPMAC

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Presented by Sheila Finn, CPP, FPMAC
PMMS Consulting Group (North
America) Inc.
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(No Transcript)
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Where Do We Start?
We need to know

• What should a best in class procurement
  process
• and function look like?
• What steps need to be taken to become best in
  class?
• What is the health, effectiveness and
  contribution of
• procurement to our overall performance of the
  University?
• How do we know whether our people have the
  right skill level for today and in the
  future?
• How can progress towards our goals be measured?
• How do you build sustainable competitive
  advantage
• through strategic procurement?

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Why Measure Purchasing Performance?

• To demonstrate your contribution to the
  organization.
• ....the added value of Purchasing
• To monitor progress over time.
• To identify areas for improvement and shape
  going-forward
• roadmap.
• To help establish future goals and targets.

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How Do You Measure Performance?

• The 3 ways of assessing purchasing performance
• 1. Inputs - Manpower, transaction levels,
  costs (CAPS)
• 2. Outputs - Prices, quality, service levels
• Process - Comparing how purchasing is
  undertaken
• versus best practice

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How Do You Measure Performance?

• 1. Inputs

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How Do You Measure Performance?

• 2. Outputs

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The Balanced Business Scorecard
Balanced Scorecard approach emphasizes
Procurements wider role
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How Do You Measure Performance?
3 Process and Practice
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PMMS Benchmarking Methodology

• PMMS has realized through experience and
  extensive research
• that
• no single company is best in class in every
  area of purchasing
• our benchmarking compares purchasing
  performance with
• world-wide best practice
• it is based upon our Purchasing Excellence
  Model and our
• Best Practice Profile of 120 global and
  medium to large
• size organizations.

PMMS focus is Process Practice
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PMMS Purchasing Excellence Model
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1. Contribution and Influence

• Position and focus of purchasing in the
  organization
• Extent of involvement in corporate strategy
• Influence over all areas of expenditure
• Extent of early involvement in purchasing cycle
• Clarity and type of authorities
• Extent and balance of performance measurement

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2. Purchasing and Audit Framework

• Quality of vision, mission and role statements
• Quality and coverage of policies and principles
• Position on commercial ethics
• Quality and coverage of procedural guidelines
• Quality and coverage of own terms and conditions
• Low value transaction processes
• Supply base records and management
• Early recognition of commercial risk
• Audit standards, coverage and responses

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3. Organization and Internal Relationship

•  Purchasing organizational relevance with the
  business
• The attitude of Senior Administration towards
  procurement
• Internal customer relationships
• Quality of networking within the University
• Extent of effective cross functional team-work

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4. Supplier Relationship Management

• Understanding and exploitation of supplier
  relationship options.
• Quality and application of supplier development
  process.
• Understanding of supplier capabilities and
  business strategies.
• Quality and effectiveness of supplier performance
  measurement process.

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5. Use of Advanced Technology

• Effectiveness and utilization of systems
• Quality of e-procurement strategy and
  effectiveness of implementation
• Innovative exploitation of core software tools
• Web exploitation for market and supplier
  information
• Exploitation of Intranet technologies

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6. Staff and Training

• Calibre of staff their experience and
  credentials.
• Career development and succession planning
• processes.
• People mix.
• Influencing capability.
• Quality and extent of skills development
  programs.
• Effectiveness and applicability of performance
• measurements.

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Strategic Purchasing Elements 7 to 10
(Planning, Action, Results and Permanence of
Change)

• Quality of strategy development process.
• Understanding and application of core tools and
  techniques.
• Quality and extent of market intelligence
  gathering.
• Solidity and ambition of sourcing strategies.
• Breadth of sourcing strategy implementation.
• Extent of key stakeholder strategy buy-in.

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Sample Supply Positioning Model at a University
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(No Transcript)
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Recommendations Next Steps for University of
Ottawa
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• Materials Management has visibility and
  leadership
• support.
• Key stakeholders are now getting involved in
  x-functional
• team initiatives.
• New procurement processes are being integrated
  throughout
• the University.
• Applied learning tools and techniques are
  being applied into
• real life situations.
• New performance metrics will be linked to
  success of the University
• of Ottawa.

. or is it a nightmare?
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The Journey To World Class
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Whats the Prize for the University of Ottawa?

• Improved effectiveness of the procurement
  processes.
• Improved supplier performances.
• Highly skilled procurement personnel to
  maximize
• the opportunities for the University.
• Finding new ways to improve efficiencies and
• decrease costs at the University.