PROCUREMENT PROJECT
OPPORTUNITY & STRATEGY OUTLINE
PROJECT NAME:
"[Click here and type]"
TRIM REFERENCE:
"[Click here and type]"
PAKCS REFERENCE:
"[Click here and type]"
DATE:
"[Click here and type]"
PROCUREMENT LEAD:
"[Click here and type]"
CONTACT DETAILS:
"[Click here and type]"
1.
PURPOSE
The purpose of this document is to recommend a desired strategy for the sourcing and selection of an
appropriate supplier arrangement to provide [insert goods/services type] to The University of New
South Wales (UNSW).
This document outlines the potential strategies, associated risks and recommended course of action.
2.
DOCUMENT OBJECTIVES
2.1
The objectives of this document are to:
(a)
Present facts based on the current situation at UNSW, including costs, drivers and
objectives of the project
(b)
Present findings from an opportunity and strategy brainstorming session
(c)
Explain the thought process for strategy selection
(d)
Recommend a desired strategy
(e)
Seek approval from senior management to proceed on desired course
3.
CURRENT STATE ASSESSMENT
3.1
Supplier Facts
(a)
[insert number] vendors supply UNSW with [insert goods/service type]
(b)
[insert number] vendors account for 80% of the [insert total UNSW value spend]
(c)
[insert number] vendors account for 50% of the [insert total UNSW value spend]
(d)
There is [strong/weak] market competitiveness for this [insert goods/service type]
(e)
UNSW’s bargaining power for this category is [strong/weak] due to [insert applicable
detail]
3.2
Current Contract Arrangement
(a)
The current Contract arrangement is with [supplier name] and is due to expire on
[date], [with/without] an option to extend.
(b)
The contract covers [insert scope of coverage/areas implicated]
(c)
A recent user survey of the current arrangement highlighted that [insert applicable
detail]
(d)
The current supplier’s quality/service performance to date has been [insert applicable
detail]
(e)
Current utilisation of this contract sits at [insert percent of compliance] percent
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(f)
The known or perceived price competitiveness of the current arrangement is
[applicable detail]
3.3
Internal Processes
(a)
[List facts/findings/stats on current internal processes]
4.
COST AND COST DRIVERS
Based on detailed supplier analysis and key stakeholder meetings, the total cost to UNSW for [insert
goods/service type] is [insert $AUD value] annually. The key components of cost can be attributed
below:
Cost Area
5.
Cost Driver
$Value
OBJECTIVE AND OPPORTUNITY
The objectives of pursuing [insert category] as a procurement project are to:
[insert bullet points or use examples provided below]
•
Achieve a considerable cost saving against the current spend of [value]
•
Achieve quality services to support the business needs
•
Achieve on time delivery for critical and non-critical jobs
•
Simplify the order process
•
Provide uncompromising account management and customer service
•
Utilise organisational synergies
•
Ensure effective internal control and performance reporting
•
Standardisation of product specifications
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6.
OPPORTUNITY ASSESSMENT FINDINGS
Members of the Project Team met to brainstorm opportunities for this category against the 6 key ‘value levers’ that typically exist in tendering initiatives. These were
exhaustively discussed, explored and documented, and the following findings were identified:
Opportunity
Lever
Description
Questions
Findings
Leverage
Reducing pricing by increasing
our leverage in the
marketplace through strategies
such as bundling requirements,
categories, company-wide or
regional spend, or offering
multi-year contracts
Have individual faculty/area needs for this commodity been
assessed and/or determined?
[insert findings from discussions]
Can combining commodities provide leverage?
What are the typical contract lengths for this commodity?
Has our spend increased?
Have we become a more prominent buyer in the market?
Are there opportunities to bundle materials and/or services across
categories?
Are there opportunities to aggregate our spend with other
universities or buyers in the marketplace?
To what degree has the number of suppliers been reduced? Has it
been a major or minor reduction?
Are there opportunities to further rationalise the supply base?
Have we undertaken any volume concentration efforts?
To what extent has the volume been pooled across sites/divisions?
To what degree have we developed alliances/buying groups among
purchasers?
Can exchanges be used to provide additional leverage?
How have parts been rationalised/standardised?
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Opportunity
Lever
Description
Questions
Findings
Price
Equalisation
Reducing overall pricing by
equalising pricing across
faculties/sites, or negotiating
pricing based on new market
insights
Can we find better pricing in the marketplace or do we recognise
that better pricing exists?
[insert findings from discussions]
Do different prices exist dependent upon region/area?
Does there appear to be bettering pricing in the marketplace?
Are current supplier(s) losing market share?
Are any current suppliers in bad financial health?
Has the supplier market become more competitive?
Are there several new entrants into the supplier market?
Are there new opportunities to use overseas suppliers?
Are there innovative ideas in the marketplace that supplier has not
adopted?
Logistics
Improvement
Reducing inventory or
transportation costs relating to
a specific spend category
Are there opportunities to eliminate or streamline processes, reduce
inventory, or reduce organisational costs?
Have efforts been used to spares?
Are substitutes available
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[insert findings from discussions]
Opportunity
Lever
Description
Questions
Findings
Value
Engineering
Reducing product or service
costs by revising specifications,
reducing product demand
through demand management
strategies, etc.
Have specs been improved or can they be improved?
[insert findings from discussions]
Is quality of the product / commodity been considered; (i.e., can the
quality be lessened and still meet customer needs)?
Have product specifications been standardised across the
enterprise?
Can existing equipment be modified versus buying new?
Can demand/usage be reduced without adversely affecting
operations?
Is this a category for which spec improvement may be feasible?
Does the current supplier not have any suggestions for spec
improvement?
Have other suppliers or companies used spec improvement to
reduce costs?
Technical service requirements – Have technical service
requirements been changed or can they be changed to improve
cost?
Service levels required – Have response times, hours of operation,
availability, etc. been changed, or can they be changed to improve
cost?
Quality requirements – Have quality requirements changed or can
they be changed to improve cost?
Key materials/services specifications – Have specifications been
improved or can they be improved in a way that reduces cost?
Are we unnecessarily customising the product?
To what degree do we rationalise product specifications?
How are parts rationalised/standardised?
How often are materials/parts substituted?
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How are life-cycle costs examined?
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In what context are long-term contracts and partnerships developed
to encourage R&D investments in order to improve specifications?
Have Environmental and Energy improvements been considered?
Has the UNSW Environmental department been consulted for
Opportunity
Lever
Description
Questions
Findings
Process
Improvement
Reducing internal supply chain
costs through process reengineering and improvement
initiatives
Are there opportunities internally to reduce usage or demand?
[insert findings from discussions]
In what ways are clients encouraged to match use with needs?
Is adequate planning taking place?
Is this a category for which joint process/organisational improvement
may be feasible?
Examine all relevant processes in the supply chain if possible –
accounting, logistics, inventory, etc.
Is outsourcing parts of the process for this category becoming
increasingly common?
Have other suppliers or companies used process improvement to
reduce costs?
Technology requirements – Are we using any new technologies that
can be used to reduce cost?
Streamlined/eliminated processes – Can we streamline or eliminate
any processes that can reduce cost?
To what extent are joint processes transformed to avoid waste and
duplication across the supply chain?
How well is the material flow optimised (transportation mode,
location of facilities, material handling techniques)?
In what ways have the logistics been integrated (JIT, continuous
replenishment, EDI, consignment stock)?
In what ways do you use simultaneous engineering (concurrent
product development across functional units and with suppliers)?
In what ways are strategic make-versus-buy alternatives examined?
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Opportunity
Lever
Description
Questions
Findings
Relationship
Development
Reducing total supply chain
costs by pursuing cost
improvements across the
supplier/customer supply chain
and restructuring roles to be in
line with the appropriate
economies of scale.
Does the current supplier not have any suggestions for joint
process/organisational improvement?
[insert findings from discussions]
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Can we integrate with suppliers to improve cost?
How do you support supplier operations improvement?
How are the productivity gains shared?
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7.
STRATEGY OPTIONS & ASSESSMENT
As a result of brainstorming session above, the following sourcing strategices were considered, and
the key risks and benefits evaluated.
Strategy
Key Benefits
Key Risks
Conclusion
Do Nothing
[insert here]
[insert here]
Recommended/
Not Acceptable
Select Tender
[insert here]
[insert here]
Recommended/
Not Acceptable
Open Tender
[insert here]
[insert here]
Recommended/
Not Acceptable
Other
[insert here]
[insert here]
Recommended/
Not Acceptable
Note: Ensure that at least one option is ‘Do Nothing’ to compare the benefits/risks of doing so.
8.
STRATEGY SUMMARY & RECOMMENDATION
[Briefly summarise the Project Team’s thought process in coming to an agreement on the most
appropriate strategy]
Based on the analysis presented in this document, we request a green light to move forward on the
recommendation to pursue [identify agreed strategy] as the agreed strategy for sourcing this category.
9.
NEXT STEPS
[Provide a brief list of the next steps]
[The below table provides the procurement activities that will be undertaken for tendering activities.
Activities 1-4 should have been completed prior to creating this Opportunity and Strategy outline.
This table can be deleted if not required]
Procurement Activity Timeline (Example)
Activity
Project team identified (Project team membership signed)
Declarations of interest signed by all project team members
TRIM file/PAKCS created
Date Due
Who
Status


Complete
D/M/Y
Team
Complete
Procurement
Category & Market Analysis
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Activity
Date Due
Who
Status
Opportunity and Strategic Outline finalised and approved (this
document)
Evaluation Criteria defined and signed off by Core Team
Develop RFX to final draft for approval by Procurement for
issue to suppliers
RFX issue via the UNSW eTendering system
Procurement
Contact prospective suppliers (as required)
Intent to bid form received from suppliers
Deadline for submission of questions
RFX Closes
Scan responses for completeness
Evaluation Kick off workshop
Issue supplier responses to Evaluators without pricing (if
agreed)
Individual Evaluation of responses commence
Commercial review of responses (price and contract with
Project Leader)
Individual Evaluation scoresheets submitted to Procurement
Consolidation of individual scores
Evaluation results workshop and determine – Suppliers
Shortlisted
Evaluation Summary and recommendation in draft/initial
approval
Supplier Presentations/factory or showroom visits. Revisit
scoring, if required.
BAFO evaluation method agreed
Validate scores/review scoresheets based on supplier
presentations
Evaluation Summary and recommendation updated
Request for Best and Final Offers (BAFO) – if required
Suppliers respond to BAFO (delete if no BAFO issued)
Evaluate BAFO, Preferred supplier identified, recommended
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Activity
Date Due
Who
Status
Evaluation Summary and Recommendation updated with
BAFO findings and approved by Project team
Unsuccessful/Successful letters issued
Contract negotiations
Communications for staff / stakeholders/notify Shared
Services
Request for approval presented with agreement
Execute agreement
Contract start date
10.
PROJECT TEAM SIGN-OFF
The tables below indicates the proposed representatives of the Project Team delegated to manage
and input to the procurement process and ensure UNSW’s requirements are met.
[insert sections for signoff - for each member on the Project Team, including the Steering Committee.
Note: emailed approval is acceptable – simply attach a copy of the approval email to this document]
10.1
Project Leader:
Name
Position
Signature
Date
[insert]
[insert]
[insert]
[insert]
Name
Position
Signature
Date
[insert]
[insert]
[insert]
[insert]
[insert]
[insert]
[insert]
[insert]
10.2
10.3
Core Team:
Steering Committee:
Name
Position
Signature
Date
[insert]
[insert]
[insert]
[insert]
[insert]
[insert]
[insert]
[insert]
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10.4
Subject Matter Expert:
Name
Position
Signature
Date
[insert]
[insert]
[insert]
[insert]
10.5
Champions (if any nominated)
Name
Position
Signature
Date
[insert]
[insert]
[insert]
[insert]
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