Clubbing together
CIPS Supply Management Awards 2009
CATEGORY – Best purchasing initiative – smaller organisation
WINNER – Advantage SW
A procurement club for social landlords in the South West of England uses collaboration to get the best deals for tenants.
The judges were won over by a procurement club for residential social landlords in the South West, particularly in successful approach to collaborative procurement and delivering benefits to tenants, using a participative model.
There is no dominant partner, so the clubs decision making cannot be unduly influenced by one partner’s self interest. Procurement projects are delivered by ‘product groups’, which look at the goods that partners buy (from whole kitchens, to external doors, to taps) to create a collaborative specification.
The groups then decide the tender assessment criteria and weightings, analyse tenders and recommend which company should be awarded the contract.
All procurement projects are run using an EU-compliant procedure. The Due North e-sourcing system is used to administer the procurement process, ensuring effective communication between Advantage SW, its partners and tenderers.
Involving tenants in the procurement process is a key factor in the club’s success. Part of the non price assessment includes provisions for tenants’ representatives to examine all the tenderers’ products and give them a rating on a scale from one to five. Failure to score more than 2.5 can lead to the disqualification of the tenderer’s product from the process.
The club has adopted the use of e-auctions as the norm, and a product group has to justify a decision not to use an e-auction to the club’s steering group. Tenants’ representatives can watch e-auctions as they happen, and then act as advocates for the club with other tenants. In most cases, tenant input has meant the club pays slightly more in order to buy a product they prefer.
The club has so far secured savings of £4.4 million, and additional value for money improvements of almost £1 million on extended warranties, improvements in specification and so on. The club subscription is £11,818 plus VAT per year, and for each £1 a partner contributes, they get an average of £6 back in savings.
The procurement club has delivered savings and other value for money improvements that each individual partner on its own could not have achieved. Its work is resulting in better products for tenants despite budgetary constraints, and delivering a positive return on investment for the partners’ chief executives.
‘The club shows how we can use procurement to improve tenants’ quality of life.’ Neil Biddiscombe, procurement manager, Advantage SW
Source: Supply Management Magazine 24th September 2009 - Volume 14 – Issue 19
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