July 14th, 2016
South Tyneside Council
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.
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.
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.
Chief Operations Officer
BT South Tyneside (firstname.lastname@example.org)
BT South Tyneside is the strategic partner with the council and manages the council’s procurement activities.
Cashable savings for the project of £52.5 million are forecasted for delivery by end of year 8 of the Partnership.
- 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,