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Case study 1: Renfrewshire Council

Assessing procurement capability can help

The challenge: 

Renfrewshire Council took the opportunity to transform its Corporate Procurement Unit (CPU), handling over £200 million of spend each year, from a fragmented administrative support section, to a centralised strategic function. Its remit was to deliver significant financial savings through smarter procurement strategy and practice. Following a Procurement Capability Assessment (PCA), an improvement plan was put in place to embed good procurement practices throughout the organisation.

Overview

A PCA in 2010 revealed Renfrewshire Council’s score as 21 per cent. This assessment, carried out in Scottish local authorities by Scotland Excel (Centre of Expertise), examines an organisations’ ability and potential to manage the purchasing of goods and services in the most effective way, not just to deliver cost savings but also ensure that procurement activity follows recognised guidance and standards. The results falling out of the PCA report established a benchmark for the Council, while the recommendations helped clearly define the key areas for improvement and actions which would improve the performance status of the local authority. A procurement reform project was established which would take disjointed procurement activity and instead, transform this into a cohesive procurement function and professional team – the Central Procurement Unit – which could realise a more focused and strategic service while securing best value and community benefits.

Procurement Capability Assessment scores
  • Pre 2010: 21 per cent
  • Dec 2010: 55 per cent
  • Dec 2011: 66 per cent
  • Nov 2012: 75 per cent ('Superior Status’)
Establishing an effective procurement team
  • devise a procurement strategy: take a project management approach to implementing changes and get senior management buy-in
  • Focus on results: aim for incremental, targeted and achievable improvements and deliver benefits which can be measured and felt by the end user
  • Embed procurement throughout: have procurement and commodity teams embedded within all service areas to support your procurement goals, bring specialist expertise and be responsive to the diversity of requirements
  • Maximise staff’s potential: by offering continuous professional development and professional qualifications in procurement, it means that staff and therefore skills and capability retention will improve.
  • Take advantage of your PCA report: by using the score and recommendations to benchmark and improve – speak to Scottish Procurement (part of the Scottish Government) and your Centre of Expertise for advice


"As a result of this new, strategic approach, the procurement team at Renfrewshire Council has made significant savings year-on-year -over £5 million was saved in financial year 2012/13.”

Fiona Hughes, Corporate Procurement Unit, Renfrewshire Council

Actions

Incremental changes were made by the CPU, allowing Renfrewshire Council to reach its goal of ‘Superior Performance’ in PCA rating, placing it firmly as an exemplar in procurement for Scottish local authorities. These changes included:

  • ‘Purchase to Pay’ strategy was implemented, significantly increasing matched invoice volumes from 64 per cent to 96 per cent
  • Managing all tender activity electronically through CPU and the introduction of standardised terms and conditions to ensure consistency and more streamlined processes
  • Devising a training plan for all staff and the roll out of a professional development programme (including Chartered Institute of Purchasing and Supply (CIPS qualifications) in order to employ and retain a high level of qualified staff
  • Exploiting more collaboration opportunities with other councils
  • The creation of a unique team structure encompassing procurement specialists, embedded across service areas, who are responsive and able to meet the needs of diverse organisational requirements, such as social work
  • Securing buy in and commitment to the new procurement strategy and ways of working through engaging with stakeholders and collecting survey information on systems and customer experience
Results
  • Recurring financial savings delivered for three consecutive years and on target for a fourth
  • A coherent procurement strategy and implementation plan with clear objectives and full support from project team, boards and senior management
  • Achieved and exceeded PCA target
  • Renfrewshire Council’s reputation now firmly established as an authority on procurement among councils
  • Participation in 17 collaborative contracts with other councils in 2010-11 alone
Further information 

 

Case Study 1.0 published April 2013