6. Does the organisation have efficient and robust processes and systems to support advanced procurement activity?
6.1 Are there efficient and effective processes & systems for ordering goods and services?
A. What is the process for receiving goods & services?
Practices & Processes
Suppliers deliver on ad-hoc basis. Paperwork intensive
Selected suppliers plan their deliveries. Mainly paper intensive.
Deliveries are formally receipted by originator (eg Goods Receipt Note ( GRN) raised).
All key suppliers plan their deliveries. (Does not include couriers)
Receipts from key or volume suppliers automated using technology (e.g. logistics or e-procurement system) at delivery point.
Evidence of packaging, returns and consideration given to sustainable disposal.
Key or volume suppliers electronically transmit delivery documentation in advance.
Agreed packaging and specific number of units to be delivered in one package agreed with key or volume suppliers.
Benefits related to packaging reduction evidenced.
B. What is the organisation's performance in terms of payments to suppliers?
Overall Value of Results
Terms applied considered poor for public sector. Frequent cases of late payment. Some instances of supply stoppages resulting.
Payment generally consistent with agreed terms and are considered good by wider public sector.
No supply or service issues resulting from poor payment. Payment is consistent with agreed terms for 90% of spend.
Good payment terms are also in evidence thoughout the supply chain (e.g. supplier paying sub-contractors).
C. How established is quality assurance in the procurement process for goods and services? Question N/A for some organisations
Resources & Skills
No quality assurance strategy for any products or services - simple goods return/shortage notification processes in place.
Ad hoc sampling or inspection on failure.
Conformance documentation supplied for high-risk items. Supplier quality assurance audits for goods and services conducted for key suppliers.
Selective & focused Goods Inwards inspection (historical based) where appropriate. Supplier quality assurance audits conducted & freely monitored.
Total Quality Management applied throughout the Supply Chain for key suppliers. Supplier quality assurance audits for goods and services carried out and widely communicated.
D. Are suitable technology-based tools in place and used? Linked to BPI9
Basic manual processes in place e.g. paper based requisitioning process.
Significant duplication of effort still evident in managing the Supply Chain transactional process e.g. goods receiving.
Management information is mainly derived from the Finance System's Accounts Payable (creditors) module.
The organisation uses an e-Commerce solution for requisitioning and ordering (either integrated or stand-alone) which has reduced manual processes.
There are local/home-grown databases which hold information on the organisation's procurement activity.
Central ordering - mainly manual process.
The organisation uses an e-Commerce solution for requisitioning and ordering (either integrated or stand-alone) .
Appropriate level of roadmap(s) for suitable technology solutions is in place for the majority of the following:
- Contract databases
- eProcurement/ eMarketPlace
- eAuctions, eInvoicing, Content Management.
There are reports that show overall spend patterns.
The minimum of manual processes remain.
The organisation uses a variety of integrated eCommerce solutions to actively control and manage the procurement function.
Supplier information is regularly analysed for savings and efficiencies, as well as benchmarked against prior year expenditure.
Automated ordering process with commitment accounting in place.
Management Information is used from the systems in daily work.
E. Are standard coding and pricing mechanisms embedded in purchasing systems with interface to general ledger (budgets)/finance systems?
There is no standardised item, commodity coding and pricing method in use.
Some item standardisation item and commodity coding and pricing exists. Infrequent control, review and updating of prices and financial coding through e-procurement and/or other purchasing systems.
Standardised item and commodity coding exists for majority of spend. Regular control, review and updating of prices and financial coding through e-procurement and/or other purchasing systems.
Standardised item and commodity coding for all spend across the organisation and all contract pricing is embedded in e-procurement systems, assisting the end user to routinely select the correct items and prices. Regularly scheduled reviews, controls and updating of prices and financial coding.
6.2 Does the organisation use tools to support payment/invoicing automation?
A. What is the process for invoice/purchase order matching?
Practices & Processes
Manual checking of invoices against purchase order/Goods Receipt Note. Low (<50%) "match 1st time" rate
regular invoicing based on actual cost. Fully manual process.
Regular invoicing based on actual cost, matching the purchase order. Some automation involved in matching process. Low to medium (50%-75%) "match 1st time" rate.
Regular invoicing. Automated invoice matching. High (75%-90%) "match 1st time" rate. Purchasing Card or consolidated invoicing for low value/high volume items.
Fully integrated P2P process, extensive use of EDI/self billing technology.
B. Does the organisation use tools such as procurement cards and aggregate/ consolidated invoices, self-billing and e-invoicing?
The organisation does not use any P2P tools e.g. government procurement card.
Some tools such as procurement cards, aggregate/consolidated invoices, self-billing and/or e-invoicing is used.
There is a P2P strategy in place which defines what technology should be used and when. This has been agreed corporately and communicated to all staff.
The full P2P strategy has been implemented and embedded in the organisation.
6.3 Are stock holdings minimised consistent with efficient supply of goods?
A. To what extent is the supplier delivery framework tailored to meet specific product needs ? N/A for some organisations
Practices & Processes
Goods delivered in bulk from supplier to remote storage point in relation to point of usage
Goods delivered in bulk from supplier to local storage point in relation to point of usage or goods delivered in packs to remote storage point in relation to point of usage.
Goods delivered in packs from supplier to local storage point in relation to point of usage.
Supplier replenishment mechanism in place allowing organisation to pull goods from supplier in packs direct to point of usage.
Supply networking evident consolidating the supply of goods packs direct to the point of usage.
B. How developed are the processes for stock management & is inventory managed efficiently?N/A for some organisations
Practices & Processes
No Inventory or availability measurements or controls in place. Provisioning has little correlation to demand
Measurement in place but basic stock controls/ demand management processes in place, leading to high levels of inventory/obsolescence and or regular stock outs.
Stock segmented by identified classifications, with appropriate and differentiated stock management processes and controls in place that recognise financial exposure and service sensitivity. Evidence of management reporting improving business processes and performance.
Detailed demand management and inventory segmentation processes in place, with mechanisms to push inventory back down the supply chain considered where appropriate. Clear inventory optimisation strategy in place with vendor performance improvement as a key contributor in such.
Optimum stock management approach in place for each segment. Extensive use of multiple Vendor Managed Inventory options evident. Inventory turns and availability excellence (Turns: 18+; Availability: 98%+).