engineering success into your sourcing initiatives

Engineering Success into your sourcing initiatives

Results you can count on!

Green = 6% savingsGreen = 10% savings

Adoption = 90% +

UC Procurement UCSF/B

UC’s Annual Budget = $22.5 Billion1

1. Source: 2011/12 budget data from UCOP website.

Afghanistan Honduras Iceland

UC

UCSF/B Procurement

$1.2 Billon in Annual Expenditure

100 Employees

5 Units

2 SciQuest Instances

1 awesome team!

Strategic Sourcing @ UCSF/B

• 4 Commodity Managers– Set strategy and provide leadership/experience– Identify the right problems we should solve

• 4 Analysts– Provide situational awareness for the Commodity Managers– Solve problems

• Andrew– Stays out of the way and tries not to mess it all up!

Our Mentality

You’re at the bottom of 2 hills deciding which to climb. Which do you choose the one on the left or one on the

right?

Today’s Agenda

Project Selecti

on

Discovery and

Scoping

Implementation

Execution

Analysis, Visibility, Superior Knowledge

Project Selection

• How do you choose what to work on?

• How do you know what’s out there?

• Do you have the ability to say No?

Project Selection at UCSF/B

• Rule #1: Avoid time waster really hard projects and ill scoped projects as best you can.

• Rule #2: Your people’s projects are better than your bosses project or even your project.

• Rule #3: Work your project to expand the scope to the greatest extent possible (Take advantage of your fixed costs).

Project Selection at UCSF/B

• Variable Manufacturers• Variable Distribution Channels• Variable Products• Variable Needs

If I don’t have at least 1, I don’t have a bid.

Discovery

Do you even spend time in Discovery?

How do you identify the scope of the project?

Discovery at UCSF/B

• Don’t find experts; become expert

• Use your supply base to help you

• Find a strategy for the commodity early– Really… Very early!– Good strategy trumps almost EVERYTHING– Use bids to setup the bid you really want to run.

Discovery at UCSF/B

• Chemicals– Knew we had to buy solvents at UCSF or Berkeley.– Didn’t exactly know which or how much exactly.– Only understood 25 of the most basic solvents.– Bid those 25 and quickly expand with winning supplier.– In 2-3 years run a much bigger bid.

• Kits– 10-15 different kit types, 2 types of technology, uoms!– Miniprep is standard and common– Auction miniprep kits and use winner to grow understanding– In 2-3 years run a much bigger bid.

Implementation

• How do you implement?

• What length do you go through for adoption?

Implementation at UCSF/B

• ePro is everything– Hosted catalog environment for goods– Punchout for configurable goods and services only

• Help your people by “shopping for them”– If you really have the best value, then why let anything else

compete with it. – Remove unnecessary and low value content– Rig search results to show your “preferred product”

• The goal is 100% adoption (unless we have something better to do).

Analytics

• What does your analytics capability look like?

Analytics at UCSF/B

Stuff Happens on Campus

We MeasureWe Observe

We Take Action

How we do it

• Hire Smart Analysts– HIV Researcher from a UCSF Lab– BS Level Math Major from UCSD – Auto Insurance regulatory analyst– MS Industrial Engineer– BS Operations Research Analyst

• Make it a goal to gain capability– Find 4 opportunities for savings generating initiatives

• Empower analysts– You find it, you get credit for the bid, you get the savings!

Hellerstein et al. – MAD Skills. http://db.cs.berkeley.edu/jmh/papers/madskills-032009.pdf