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CASE STUDY

Transforming Procurement

at

South Tyneside Council

South Tyneside Council

Challenge

In procurement, the Council faced a number of issues:

  • A procurement strategy that did not set the agenda for the way procurement should work in the organisation.
  • A lack of performance indicators that defined the success of the procurement strategy and the benefits it would bring.
  • A strategic procurement team that was inhibited by their remit, restrictions and through resistance for them to address all spend.
  • Suboptimal procurement savings being realised.
  • Insufficient recognised procurement resource.
  • Difficulties in retaining procurement staff.
  • Poor visibility of who is spending and on what.
  • Numerous procurement processes, including procurement systems that did not interface with each other.
  • Inconsistent and inadequate contract management information.
  • A local supply base with limited skills and capacity to compete for Council business.

The Solution

Our proposal centred on 6 key service improvement plans:

  • Development of a new Council-wide vision for procurement, underpinned by a balanced series of performance measures.
  • Delivery of sustainable cashable cost savings, throughout the duration of the 10-year Partnership of a minimum of £52.5 million.
  • Establishment of Council-wide end to end e-enabled procurement processes that also extended to key suppliers, ensuring full compliance with procurement policies and procedures thereby meeting procurement strategic objectives and targets.
  • Establishment of a corporate procurement service operating within a number of agreed service level targets.
  • Development of a well-defined supply-base to deliver Council requirements against measurable objectives and performance criteria.
  • Establishment of South Tyneside Strategic Procurement Board to help keep as much spend within the Borough as reasonably practicable.

The Benefits

Year 1 Savings

£12 million in procurement savings secured in by end of year 3 from 3rd Party spend including:

  • 20% on a new 5 year security contract.
  • 13% in homecare through cost reduction.
  • 30% on a new stores management solution.
  • 5% through outsourcing beach lifeguarding.
  • 44% in narrowing office consumable choices.
  • 14% with a vehicle tracking system.
  • 7% with a different strategy to purchasing electricity.
  • 19% on wheeled bins through an e-Auction.
  • 5% on agency staff.

Client Reference

Gavin Finlayson

Chief Operations Officer

BT South Tyneside (moc.t1511475791b@nos1511475791yalni1511475791f.niv1511475791ag1511475791)

BT South Tyneside is the strategic partner with the council and manages the council’s procurement activities.

Total Savings

Cashable savings for the project of £52.5 million are forecasted for delivery by end of year 8 of the Partnership.

Other Benefits

  • Transferred and recruited staff from the Council to create a new procurement service comprising of:
    • A strategic procurement team structured around key categories of spend.
    • A separate supplier relations team dedicated to managing and developing the supply base.
    • A procure to pay team managing all day to day purchasing, invoice payment activity and customer service related activities.
  • Implemented a council wide e-Procurement system.
  • Designed a new contract management and spend analytics web based system.
  • Created a new procurement strategy that supported the Council’s key priorities.

The Consultancy Company have now trained staff, created procedures and a good governance framework and have now left the new team to continue making procurement savings without requiring external support.

 

For an in-depth discussion please contact:

Aidan Salter, Managing Director – 07801 039600,

ku.oc1511475791.ycna1511475791tlusn1511475791oc-eh1511475791t@ret1511475791laS.n1511475791adiA1511475791

 

 

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