► Introduction to Health Promotion Board (HPB)

► Procurement@HPB Transformation Journey

► Transformation:

Aims & Drivers

Framework for Excellence

► Results, Impact and Value Creation

► Case Studies

► Learning Points

2

We’re small

Population – 5.54 million (2015)

Density: 7,697 residents per sq km

Multi-ethnic: Chinese (76.2%),

Malay (15.0%), Indian (7.4%)

Maps courtesy of The World Factbook

About Singapore

HPB established on 1 April 2001, a Statutory Board under the

Ministry of Health

VISION

HPB is The Lead Agency for National Health Promotion & Disease

Prevention Programme

VISION

‘‘A nation of healthy people’’

MISSION

Through:

• Being a centre of excellence for health promotion, disease prevention andpatient education

• Establishing, engaging and supporting local and internationalpartnerships

• Being a people-centered organization that inspires and enables ouremployees to realize their full potential

‘‘Empowering individuals to take ownership of their health’’

4

Healthcare 2020:

Quality

Accessibility

Affordability

Integrate Care Across

Different Settings

Expand Capacity in Acute and

Community Hospitals

Improve Access to

Healthcare in the

Community

Build up the Intermediate and Long-Term Care

Sector

Grow Healthcare Manpower

Strengthen Financing

Framework to Keep Care Affordable

Keep Singaporeans

Healthy

HPB’s work contributes to MOH’s Healthcare 2020

HPB’s Work Contributes to Nation’s Healthcare 2020

Sebastian Chua6

Project

Management

Fire Fight

Strategic

Tactical

Tactical

Rationalise & Organise

Strategic

Tactical

Efficacy

Strategic

Year 1 Year 2 Year 3 Year 4……Portfolio

management

Strategic

Tactical

Portfolio mgt

Process & compliance

HPB Procurement Transformation Journey

7

Procurement @ HPB Transformation: Aims & Drivers

Background: Procurement was a back-end administrative function focusing on compliance &

transactions. Staff perceived procurement as a gatekeeper and an operational bottleneck with long

processing lead-time.

Outcome: Reactive and ad-hoc relationship where we only responded upon staff requests. Lack of

partnership in understanding each other's deeper concerns, leading to misalignment of business needs.

With HPB's strategic shift from a traditional health education approach to an eco-systemic approach in

health promotion (i.e. harnessing on the collective power of the 3 Ps - People, Private and Public),

stakeholders are expecting these extended values from Procurement – Savings, Speed and Quality.

Procurement has to evolve from a gatekeeper to a business partner in order to deliver value beyond

compliance.

AimsWin for Citizens: Re-invested savings in effective programmes to increase outreach, leading to more

citizens benefiting and adopting healthier behaviour.

Wins for Public Service: Maintains a robust governance framework, passing the AGO audit.

Win for Suppliers: A closer supplier relationship would mean that the supplier would want to invest

more to become an integral part of HPB’s “business”.

Wins for HPB: a) Faster time-to-market to meet dynamic business needs, b) Improved operational

efficiency to achieve productivity gains that can be channelled to more strategic tasks.

VISION

MISSION

Governance

People Stakeholder

Partnership

Supplier

Relationship

Process &

Program

Excellence

Transformation: Framework for Excellence

Procurement Brand

Centre of Excellence

8

9

Transformation: Procurement Branding

BRAND

INSIGHT

BRAND

PROPOSITION

BRAND

PILLARS

BRAND

PERSONALITY

TAGLINE Real Values. Real Results

Transparent Impactful Passionate Expert Reliable

Delivering Value

Procurement is a discipline delivering optimum value through innovative

technologies and sourcing strategies enabling productivity &

strengthening organization’s core advantage.

Strengthening

Core Advantage

Strategic

Partner

Operational

ExcellenceEthics &

Integrity

MISSION

VISION Creating Values. Delivering Results

To be seen as a strategic partner in achieving HPB’s commitments

and success, and not just dealing with purchasing matters

Transformation: Typical Procurement Focus Areas (1/7)

10

• Execute to user’s requirements

(Reactive Approach)

• Transaction focused

• Ad-hoc relationship with

stakeholders

• Engage once the supplier

selection is complete

• Procurement Indicators –

Lagging, too procurement

focused

Transformation: Procurement Roles (2/7)

Past Present

• Strategic procurement

(Pro-active approach)

• Analytical & Sourcing

focused

• Long-term partnerships

• Pro-active upfront

engagement in sourcing

decisions

• Sourcing strategies based on

leading indicators, market

data, and anticipated user’s

needs

11

What is the role of Procurement? The change is transitioning slowly from a transactional focus to a strategic focus where early

engagement of the stakeholders will lead to better sourcing decisions.

Introducing Category Spend Approach

Technology Services

Professional Services

Marketing Services

Facilities & General Services

Healthcare Services

Programme & Outreach Services

Transformation: Procurement Roles (3/7)

12

“Business Units” Category Spend

Preventive Health Programmes

Insights, Innovation & Planning

Finance & Admin

Policy, Research & Surveillance

Chief Info. Officer’s Office

Corp. Marketing

Corp. & Industry Partnerships

Workplace Health & Outreach

Youth Preventive Services

Human Resource & Org. Development

Corp. Communications

Obesity Prevention Management

Regional Health & Comm. Outreach

School Health & Outreach

Procurement

Sebastian Chua 13

StrategySupply Base

Engagement

Total Cost

Availability

Supply Base

Performance

Action Plan

•Deliverables

•Timeline

•Ownership

•Measurable

•Alignment to

Commitments

Stakeholder

Feedback

•Focus on right

priorities

•Performance on

priorities

• Category

Strategy

• Action

Plan

Feedback

Input

External Factors

Category

Overview

Spends

Assessment

Supply-Base

Assessment

Stakeholder

Requirements

Team Input

• Action Plan

• Execution

Horizon : 1 Year Horizon : 6 Months

Transformation: Category Spend Approach (4/7)

Feedback

14

How do the new Procurement Team deliver?

We must show the business that Procurement C-A-R-E and is willing to get involved in

order to make it shine.

C - Change the way we interact with the business, adding value and perform above our base

role (e.g. be seen as making a difference to the business KPI)

A - Anticipate by understanding the business requirements (i.e. think of “SOLUTIONS” to

issues before they happen)

R- Re-market the procurement brand to show we are now doing things differently (instead of

doing different things)

E - Excellent in what we do and prove that procurement can do something rather than to slow

down the process

No magic trick in winning over business confidence. It requires a lot of passion,

perseverance and building credibility by delivering WINS, These wins may be small

initially, but will grow as we become more engaged in the business.

Sebastian Chua

Transformation: Procurement Roles (5/7)

15

Strategic skills: category spend skills, supply market knowledge, financial acumen, contract

management, risk management, project management, and increasingly, data management and

analytical skills.

All these skills are not sustainable if we can’t convince others that we can help.

Survival traits – 3 “Ps” + 1 “S”

We have to be able to sell our ideas & convince our Business that procurement can help them

and the Board as a whole therefor be more successful.

Example: To get a seat in the Board room.

It’s not easy. Some stakeholders, no matter what you do, still have a limited view of what

procurement can do for them. It takes salesmanship and a record of accomplishment to

overcome that.

Transformation: Critical skills for Strategic Roles (6/7)

16

Achieve better Value-For-Money (“Cheaper” - Re-investment of Savings) • Demand aggregation, active market sourcing, reverse auction, optimize specifications, etc.

• Identify priority areas, determine cost drivers, establish price indices, develop sourcing strategies

Strengthen Stakeholder Partnership (“Closer” - Collaboration) • Quarterly business review meetings to understand business needs, priorities, challenges

• Frame opportunities as a collective one and draw upon collaborative resources

Enhance Supplier Relationship (“Closer” - Building up Supplier Capability) • Perform SBR to improve ROI by identifying improvements in supplier performance

• Longer-term contracts with volume commitments motivate suppliers to be part of HPB “business”

Improve Time-To-Market (“Simpler”, “Faster” - Simplicity means speed) • Automate PR/PO process

• Increase purchasing transactions thru preferred suppliers => time saved for more strategic task

• Review delegation of Approving Authority to shorten approval lead-time

Balance Efficiency with Compliance (“Proper” - Strengthen Public Confidence)• Partnership with IA to develop a sustainable governance and compliance framework (e.g. ERM)

• Achieve 100% acceptable corrective actions on audit points

Transformation: Procurement KPI (7/7)

Stakeholders want these values from Procurement

Savings Speed Quality Compliance

We deliver this with

Proper governance

Category Sourcing Strategy

Stakeholder partnership

Supplier relationship management

17

1 = Irrelevant

Do not know our scope/function. We are not relevant.

2 = Ad Hoc

Contact us only on need basis.

3 = Consultative

We may get listened to but not included in the decision.

4 = Inclusive

Stakeholders includes us in sourcing decisions and procurement activities.

5 = Partner

Stakeholders integrate us into business decision, empower us to drive procurement activities and sourcing strategies and decisions.

How to improve business relationship?

Transformation: Stakeholder Partnership (1/3)

20

Objective: To improve & expand our stakeholder reach

WOW!

Valuable Partner

(“Cheaper”, “Closer”)

Operational Excellence

(“Cheaper”, “Faster”, Simpler”)

Process Compliance (“Proper”)

Customer

Experience

Adding Value

Relationship

Excellence

We C.A.R.E - Not just what, but how

Embedding a service culture into our “Way Of Working (WOW)

Beginning the journey with an end objective of a true partnership

Year 1

Year 2

Year 3

Year 4 &

beyond

21

Transformation: Stakeholder Partnership (2/3)

22Sebastian Chua

Isolation Frustration Perception The call!

No one is

talking to me

I can’t get the

issues

resolved

I don’t see your value? @#*%#&^%

• Decide on a frequency to get feedback from the stakeholders on your execution

• Ask for qualitative feedback

• Get on with your stakeholder and verify the importance of your action plan activities

• Check with them on your performance. High performance is not a guarantee of high rating

• Use the feedback to make any corrections to your strategy or action plans to align with stakeholder requirements

• Be patient, don’t be defensive & actively listen.

Caution: Perception is reality. Our response drives customer perception!

Perf

orm

an

ce

Importance

DelightDisinterest

Day-Prison Disgust

Low

Low

High

High3

3.7

0

4.4

4

4.98

Transformation: Stakeholder Partnership (3/3)

23

Fragmented Rationalized/Consolidated

• Skits Management

Service

• Workshops

• Surveys (market

research)

• Call Center Service

• Health Screening

Service

• Mobile Dental

Clinic

• Cold chain

warehouse etc

What is the outlook of current supplier relationship by category spend?

• Facilities

• Legal service

• Warehouse

• Courier service

• Recruitment agencies

• Insurance Broker

• Audit service

• T-shirts, Uniforms

• Towing service

• Dental Treatment Units

• Medical /surgical consumable

• IT application maintenance

• Interactive web/mobile app

• Applications hosting service

• Event Management Service

• Market Activation Service

• Visual cues

• Tobacco control

• Supermarket gift voucher

• RFID readers, tags

• Creative agency

• Media agency

• Digital agency

• PR agency

• Rewards Programme

• Physical Activity

• Nutrition/Dietetic service etc

• PC & Printer

• AV equipment

• Bus hiring

• Car rental

• Collection and Disposal of Bio-

hazardous Wastes

• Copier

• Toners, Cartridges

• Electricity

• Direct mailing service

• Catering service

• Pantry items

• Laundry service

• Office furniture

• Fire fighting equipment

• Paper, Stationery

• Printing service

• PPE envelope

• Travel agency

• Hotel Corp Rates

• Airline Corp Rates

• Corporate Card

• Taxi Cab charge Corp Card

• Travel Insurance

• Online Analytics service

• Illustration service

• Translation service

• Video & animation

• Electronics and Electrical Appliances

etc

Transformation: Supplier Relationship (1/3)

Category

Supply Base Controlled

Year 1

Year 2

Year 3

Year 4

Relative Cost (Spend)

Ris

k /

Exp

osu

re /

Vu

lnera

bilit

yCritical

Ensure supplies:

•Customized Agreements

•Co-operative relationship

•Drive to low risk

•Competence trust

Strategic

Checking & searching:

•Partnerships (strategic

alliance)

•Long term

•Mutual benefit

Leverage

Drive for optimization:

• Standardize the

specification

• Consolidate the purchase

(PC/FA)

• Minimize the price

Acquisition

Organise & let go:

• On-going purchase

• Online catalogues

• Small value purchase

• Tactical relationship

Part 1: Portfolio Analysis (knowing HPB’s buying objectives)

Transformation: Supplier Relationship (2/3)

24

Relative Value of Business

GROWTH

Develop the business

Nurture the customer to expect

new opportunities

Be proactive & responsive (lots

of attention)

NUISANCE

Low attention & service

Makes everything difficult

Unlikely to compete

Lose the business without concern

CORE

Look after customer (maximum “attention”)

Protect, fight off competition (actively defend)

Maintain high service levels

Cultivate dependency

PROFITABLE

Seek best price (maintain high price)

Short term gain

Reactive to demands

Accept risk of losing business

HIGH

HIGHLOW

Part 2: Supplier Positioning Analysis (knowing supplier’s selling objectives)

Transformation: Supplier Relationship (3/3)

25

Attra

ctiveness o

f B

usin

ess

Year 1

Year 2

Year 3

Year 4 & beyond

Excellent

(“Cheaper” and “Closer”)

Sustainable

Growth

(“Proper”, “Faster”,

Simpler”, “Cheaper” and

“Closer”)

Getting Started (“Proper”)

Year 1

Year 2

Year 3

Year 4 & beyond

Excellent

(“Cheaper” and “Closer”)

Sustainable

Growth

(“Proper”, “Faster”,

Simpler”, “Cheaper” and

“Closer”)

Getting Started (“Proper”)

• Strengthen policies & enhance process efficiencies

• Moving away from strategic collaboration

• Delegation of AA to improve business agility

• Mandatory procurement workshop

• Spending analyzed

• Supplier Selection Criteria (Critical Vs Non-critical)

• Spending aggregated for backend services

• High Risk Procurement Analysis

•Expanded sourcing influence to focus areas

• eLearning Procurement Courseware

• Supplier Business Review

• Reported cost savings & cost avoidance

• Enterprise Risk Management enforcement

• Reverse Auction Adoption

• Cost Review Committee

• Implement recommendations to achieve cost effectiveness

• Document sourcing strategies and conduct case study sharing

• Strengthen Stakeholder Relationship Strategy

• Procurement decisions integrated with Board goals

• Embedding a service culture into Procurement Way of Working

• Suppliers see us as a valued customer

• Stakeholders acceptance as trusted partner

• Other companies perceive us as the “benchmark”

Impact on Public MembersCheaper. Closer.

Faster. Proper. Simpler.

2

8

a) Increased outreach of various programmes: more citizens benefitting and adopting healthier behavior

b) Faster Time-To-Market: Shorter lead time to launch programmes at competitive prices, allowing rollout

and scale up rapidly

Ou

treach

ProgrammeAdult

PA

Employer access

to Health Promoting

Programme

Student WM Healthier Meals

Eaten OutSchool Children

access to

Healthier Meals

Health

Screening

(>40 years)

80K

147K

193K

322K

7,310

12,563

31.2M

155M

5.3%

54%8,576

38,883

FY15 Target

Actual FY15

FY14LEGEND

Results, Impact and Value Creation (1/3)

29Sebastian Chua

Results, Impact and Value Creation (2/3)

Physical Activity &

Nutrition Services

$4M ($1M/yr)

Marketing Purchases

$5.5M ($1.8M/yr)

School-based health

screening services

$350k ($117k/yr)

Healthy Meals

Programmes in

Schools

$370k ($185k/yr)

COST SAVINGS

70%

80%

90%

100%

FY14 FY15

78%

91%

Transactions through

DA contracts

60

70

80

90

FY14 FY15

82

72

Supplier Count in

top 90% Spend

18Man-days

savings

per staff

Time taken for evaluation

FY15 – 80 man days per staff

PRODUCTIVITY SAVINGSCatalogue

Buy

RFQ Quotations Tenders DC Total

Total

Transactions

(FY14)

1146 40 204 72 61 1523

Total

Transactions

(FY15)

2153 89 114 58 52 2466

78%

91%62%

FY14 – 98 man days per staff

Spend Analysis Management Savings

30

Customer

Experience

Sebastian Chua

Results, Impact and Value Creation (3/3)

CUSTOMER SATISFACTION SURVEY NEW DA CONTRACTS

0

1

2

3

4

5

6

FY13 FY14 FY15

3.74.44

4.98EXCELLENT

VERY GOOD

GOOD

VERY POOR

POOR

SATISFACTORY

With the marked improvement of 35% in Procurement

Satisfaction Survey Index from 3.7 (FY13) to 4.98 (FY15),

we see ourselves moving towards the right direction.

Procurement Satisfaction Survey1. Health Screening Services ($8.5M)

2. Contact Centre Support Services ($5.5M)

3. New Media and Digital Services ($5M)

4. Health Related Workshops ($3.7M)

5. Market Research Services (includes FGD) ($1.0M)

6. Provision Of Training Services for HPB staff

(500k)

All these also lead to faster time-to-market, allowing

HPB to meet and surpass its KPIs.

• Passed AGO’s

audit

• No findings from

External Auditor

0

5

10

15

FY2014 FY2015 1HFY2016

13

1 0

“After-the-Fact” PO

Reduction in

No. of ATF

COMPLIANCE

Case Study 1 (Active Sourcing) - School-based Students Health Screening

Savings (Past Purchase minus New Offer)

Year Price Difference Quantity Savings

2016 $1.88 ($13.88 - $12) 127,000 $238,760

2017 $0.88 ($13.88 - $13) 127,000 $111,760

Total savings: $350,520

31

$13.68 $13.88

$16.68

$17.58

$12.00

$13.00

$14.00

$15.00

$12.00

$13.00

$14.00

$15.00

$16.00

$17.00

$18.00

$19.00

$20.00

2012 2013 2014 2015 2016 2017 2018 2019

Year

Unit

Price

• Forward planning

6 months in

advance

• Active Market

sourcing

Incumbent

New supplier

Learning Points

32

1. DA MAY NOT ALWAYS PROMISE VFM

(a) Besides longer term contracts, there should be Volume Commitment in DA by user departments so that

suppliers can plan their resources early and quote competitively.

(b) Do not simply demand aggregate without understanding the supply market. There may be situations

where no single supplier has a domain expertise in supplying the aggregated service requests, which may

lead to them charging higher prices when they subcontract services beyond their domain expertise. For

example, there is no single supplier who can provide different skits at competitive prices.

2. DO NOT SIMPLY BUY AGAINST SCHEDULE OF RATES(SOR)

(a) Our current SOR is reasonable but may not be optimized for high volume purchases, where a RFQ

should be considered.

(b) Do not use the SOR to buy services which are not catered for. RFQ should be called when the

requirement varies from the SOR.

33

3. ENSURE PRUDENCY IN EVALUATION

(a) Do not assume past purchases are value-for-money and provide good price references for

procuring the same services in the current market condition

(b) Do not be too quick to rule out suppliers who have no track record with HPB. Please see example

on event planning and execution purchase below.

Learning Points

34

New specs

Staff deployed for

health coaching

should have good

knowledge in

health workshop

topics… relevant

coaching or

patient education

experience…

Learning Points

4. SCRUTINISE SPECIFICATIONS

(a) Do not assume the previous specifications are optimized for current purchase.

(b) Do not over-specify the requirements. Please see example below.

Old specs

Staff deployed for health coaching should

have relevant certification in coaching,

psychology or counselling and at least

3 years of post-qualification

experience in chronic disease

management or patient education

experience.

New specs

Staff deployed for health coaching should

have good knowledge in health workshop

topics… relevant coaching or patient

education experience…

35

Summary

Sebastian Chua

A Procurement Leader needs to be bold and act as an enabler, not just a

driver.

Remember these 3 buttons in your computer keyboard: CTL-ALT-DEL

Review areas that require more or less CONTROL (CTL)

Always on the lookout for better ALTERNATE solutions (ALT)

Bold to DELETE (DEL) unproductive, costly, unnecessary process, which is evident in your

current procurement culture.