presentation to the pcmg (pharmaceutical contract management group) on value management
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Presentation to the PCMG (Pharmaceutical Contract Management Group) on Value ManagementTRANSCRIPT
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VALUE MANAGEMENTA collaborative approach to customer satisfaction
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Collaborative approach to Define and meet the
business needs Focus on value rather
than cost Consider options using a
structured approach Prevent unnecessary
expenditure and waste
Aims of Value Management
Client
Supplier1
Supplier2
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Traditional Approaches
Concept
Design
Procurement
Implementation
“Traditional behaviour is mostly about supplier margin not a common purpose”
“Often the design is done in complete isolation to the implementation”
“Risk management is often concerned with responsibility for the additional cost not fixing the root cause”
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A traditional procurement approach significantly exceeded budget of £20m
Value management workshops “brought the team together”
They agreed clear mission and values The result was an improved
understanding of client requirements A truly integrated team was built And the final cost was £19.5m
Case Study OneWithington Community Hospital
Source: OCG Value Management in Construction
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Aim to improve capital productivity
19,500 sites worldwide Spend $400m – $700m per
annum Resulted in cost saving of
40% Two weeks saving in
implementation time Long term partnership
started in 1996
Case Study TwoGlobal Alliance BP / Lend Lease
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Establish Integrated teams to focus on value not cost by: Understanding the challenge
and the focus areas Identifing alternative courses of
action Analysis and evaluation of
proposals against defined criteria
Value ImprovementPractical Steps
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Standardisation through modular design, common practices and processes
Transparency though IT real time access to information about status
Strategic procurement by using global buying power
Online bidding for suppliers, but with focus on overall cost saving not just the lowest price
What leads to the improvements?
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Culture of transparency means Joint leadership and
commitment from the top Rewards for organisations and
individuals against balanced scorecard, not just cost
An integrated knowledge management database
A flexible work force with strong team working (secondments etc)
Multi disciplinary team working Open book finance
Value Improvement Culture Not Just Process
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Bridging the Gap
Concept
Design
Procurement
VM 1
VM 2
VM 3
Implementation
VM 4
VM 5
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1. Diagnosis of the issues with the client and suppliers
2. Workshop with the integrated team using VM techniques to generate solutions
3. Follow up to ensure agreement of actions
VM 1: stakeholder needs, objectives and priorities
VM2: project definitions and options
VM3: value engineering to reduce cost
VM4: handover review VM5: lessons learned
Workshop Format Different workshops at different stages
Value Improvement Process Workshops
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Are You Ready for Value Improvement?
Supplier is involved in the concept / design
Focus is on the root cause of the risk
Long term partnership with key suppliers
Payment is based on balanced scorecard
Culture of cross fertilisation of ideas
Value ManagementClient specifies
design alone
Focus is on who pays for the impact of the risk
Transactional relationship with
suppliers
Payment is based on fixed price
Islands of functional knowledge
Cost Management
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Parallel Project Training
on-line APM e-learning
Public & in-housetraining
Project Management Training for Clinical Trials