Situation
Our client was a major transportation authority, implementing a new enterprise-wide strategic direction with 14 major transformational initiatives to support this. These were intended to support the strategic imperative of “Achieving Operational Excellence”, and help steer the Authority towards its vision of becoming a premier portal and world class global airport hub. The overall goal of the Authority was to increase its competitiveness, both operationally and from a customer service perspective and differentiate itself by excellence in customer service and product innovations.
In this context, the objective of the strategic purchasing initiative was to “achieve improvements in how the Authority purchased goods, services and capital expenditures through innovation, not by cutting service levels”. To achieve this, a future state Strategic Purchasing Plan was required.
Requirement
Schroeder & Schroeder Inc. was commissioned to deliver the Strategic Purchasing Plan, with the goal of reducing expenditures and improving operational effectiveness and efficiencies through a study of the purchasing requirements of the organization and the development of strategies for optimal sourcing and procurement of the overall purchasing requirements. The project focused on four key areas for improvement: Process Flexibility, Process Cycle Time, Data Quality, and the Planning Process; all was based on a number of methods and deliverables.
The key deliverables included a Future State organization design and a roadmap for implementation, as well as a Resource Planning Tool designed to support this and generate the desired efficiency and effectiveness improvements. Other deliverables included benchmarking of the Authority’s procurement processes, a vendor survey, and contracts requirements assessment.
Challenges
The main challenges we faced on this project included:
- Limited stakeholder buy-in or availability – it was often challenging to convince stakeholders – especially external suppliers – of the need for the project, in order to secure their necessary input.
- Need to reconcile conflicting perspectives – there were many differences between users’ perceived needs and the priorities of the purchasing department which needed to be appropriately balanced.
- Unavailability or Inadequacy of Information – we faced difficulties in obtaining accurate information on the current and expected future workloads, work effort and capacity, and the complexities relating to each commodity.
- Changing Needs – although the original intention was to build a relatively simple resource planning tool, we quickly discovered that the complexity and variety of procurement planning within the Authority required a more sophisticated and comprehensive approach.
Actions
- Engaged with key stakeholders through interviews and focus groups to incorporate a range of perspectives and secure valuable information to inform the project.
- Defined procurement performance metrics using the Authority’s strategic initiative measurements.
- Conducted contractual requirements assessment and independent quality audit.
- Carried out benchmarking of the Authority’s purchasing department against other procurement organizations using three different methods.
- Conducted a survey of vendors to seek their views on current procurement processes and secure their input to the strategic purchasing initiative.
- Defined requirements for a Resource Planning Tool; provided advice on the selection of appropriate software and oversaw the design and piloting of a prototype planning tool and the development of a full product for use by all internal clients.
- Conducted an organizational structure and skill level review of the procurement department to determine compatibility with strategic purchasing, and developed recommendations for organizational changes to support the strategic purchasing mandate.
- Reviewed procurement department’s overall IT enablement requirements and made recommendations for aligning this with the Authority’s IT strategic plan.
- Developed a comprehensive communication and stakeholder engagement plan.
- Major deliverables were created in each of the following areas:
- Benchmarking GTAA Procurement Processes
- Vendor Survey
- Performance Management – Performance Reporting Feasibility and a Management Reports Package
- Communication Plan
- Resource Planning Tool For C&P Management
- Contracts Requirements Assessment
- Quality Audit Of Process
- Organizational Review
- Education of Clients and Staff
- Strategic Purchasing and Implementation Plan
Results
We applied a delicate balance of art and science skills to successfully overcome the project challenges, for example by:
- Applying excellent interpersonal and negotiation skills to persuade stakeholders of the importance and value of the project and secure their necessary input.
- Combining information and data from various sources to overcome any gaps or biases and ensure that the deliverables were based on robust and accurate evidence.
- Adopting a flexible approach to the Resource Planning Tool development to ensure this reflected an evolving understanding of the Authority’s needs being generated from other areas of the project.
- The use of state-of-the-art project management, monitoring, and quality assurance processes to minimize all types of project risk and ensure the deliverables were completed on time and within budget.
The project provided the Authority with a clear roadmap and high-level implementation plan for completing the medium and long-term aspects of its Strategic Purchasing Plan and a prototype Resource Planning Tool. Many early improvements to purchasing tools processes were also identified and implemented during the course of the project, delivering additional value and business benefits to the Authority over and above the required deliverables.
At the conclusion of the project all the key success factors had been achieved, and the client was highly satisfied with the project deliverables and the value added by Schroeder & Schroeder Inc.