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The City of Vantaa’s Strategic Road Map and Operating Model
Tiina Ekholm
Procurement Director
Salla Koivusalo
Sustainability Consultant
Procurement Center
Changes in the operating environment
Legislative Social and societal Economic
Environmental Cultural Technological
HOW TO CONSIDER IN PREPARING OF PROCUREMENTS?
The economic importance of procurement
• 2000 billion a year in the EU
• 35 billion a year in Finland – Public procurement covers 15% of Finland's GDP
• In Vantaa, purchases of services and materials 704 million a year, investments 147 million (2016)
21.1.2015 3
Principles applicable to procurements and the objectives of the Procurement Act
4
Exploiting competitive conditions
Impartiality Quality
Economic efficiency Non-discrimination
Openness
Proportionality
Innovativeness
Attentive to social responsibility
Reducing administrative tasks
Considering local companies and the transparency of small purchases
Governing legislation
- According to the Local Government Act (365/95), the municipality aims to promote the well-being and sustainable development of local residents in their area - Procurement is one way to accomplish the basic task.
- It is important to find qualitative, economically and environmentally sustainable ways of achieving this
→Public procurement is governed by EU directives and national legislation → Oblige to take stronger account of accountability considerations
→ Encourage the development of procurement
City of Vantaa, Salla Koivusalo 5
OBJECTIVES OF THE STRATEGIC PRIORITIES AND THEIR
• VALUES – Transparency Courage Responsibility Communality
• PRIORITIES – We safeguard the balance of the economy
– We concentrate the city, taking care of the surrounding nature
– We increase the city's vitality and attractiveness
– We promote the well-being of the inhabitants
– We are pioneers in developing services
– We lead renewing and participating
21.1.2015 7
VITALITY PROGRAM STARTING POINT
21.1.2015 8
- The indisputable advantages of Vantaa and also in the new program are, along with the location and accessibility advantages, the city’s diverse industrial structure and international operating environment
- In a modern skilled economy workplaces, business activity, quality living
options, and an interesting city are ever more strongly knitted together - In the future, companies invest more and more into cities that are
interesting and that support their innovative activity and objectives
- In addition we know that in urban development the growth of job self-sufficiency follows the growth of the city population
VITALITY PROGRAM AND EMPLOYMENT
We are at the forefront of
service development Developing leadership and
participation
We are creating a more
vibrant city
We promote the wellbeing
of residents
• The Capital Region has the best-
developing urban employment
situation
• We promote the employment of
residents in the open labor
market
• We help companies in recruiting
skilled labor
We ensure balance in the
economy
Increasing urban density
while conserving nature
• The municipal share of labor
market subsidies will decrease
• We promote wellbeing by
supporting the employment of
those in a poor situation in the
labor market
• We promote equality in our
services
• New service model for youth
employment
• Increasing use of customer feedback
• Promoting employment of
employment services’ customers
through the employment clause in
procurements
• Implementing new operations system
at coaching centers
• Utilizing project funding as part of
developing operations
• Implementing coaching
leadership
• Personnel’s wellbeing and
enjoyment at work as a core
value of leadership
• Equality as a part of daily
operations
8.2.2018
Katariina Rautalahti 10 Kuva Sam Schooler
Strategy of the Council Period 2018 - 2021
Development of the urban structure that supports resource wisdom Vantaa will be a carbon neutral city in 2030
The roadmap for resource wisdom is a strategy implementing program
‘’Long-term target program to promote resource efficiency and environmental responsibility
Measures 2018 - 2021 2022 - 2025 2026 -2029
The business areas will carry out the implementation plans for the current council period
Objectives of the strategic procurement roadmap and operating model
• Know how to procure that which is really needed
• Make economically viable cost-effective procurements
• Procurements are made optimally for the city's resources
• Systematic, proactive planning of procurement in a sufficiently long-term perspective and related communication
Procurements are part of leadership
Procurements are an instrument for implementing the strategy
21.1.2015 12
STRATEGIC PROCUREMENT PACKAGE
• From a sectoral, industry and category-specific point of view to an integrated one. Procurement and investment entities are increasingly hybrids of service, trademark, and license procurement. An integrated perspective enables the use of performance-based and partnership models in procurement.
ICT procure-
ments
Construc-tion
invest- ments (house
and infra)
Material and
service procure-
ments
Deparmentsservice,
material, and ICT
procure- ments
Arrange- ment and procure- ment of
services for inhabitants
MANAGEMENT OF STRATEGIC PROCUREMENTS
Management of cooperation/partnerships State
Counties
Joint municipal
authorities
R&D actors
Companies and other
actors
STRATEGIC OBJECTIVES- EFFECTIVENESS
(productivity, enterprise, responsibility (environment, social, life cycle) lobbying)
Inhabitants
Work situation (1)
• Pilot of the Strategic procurement roadmap 2017
• The city’s strategic procurement approach was identified in 2017
• BusinessFinland (TEKES) granted financing to the city – For the development and implementation of the strategic procurement
model
– Development of business forum and procurement communications
– Development and testing of national innovative procurement approaches
– Preparing and competing for 5 procurement pilots (facilities 24/7, indoor air service, material needs of the robotics center, procurement of personal assistants, Maas services)
• Sustainability Advisory Board
21.1.2015 14
The operating cycle of strategic procurement function
Updating of business road maps for the current year
Assessment of the strategicity of supply chains for the Mayor's framework negotiations and ongoing
monitoring
Divisions financial plan of strategic procurement section into income cards during the
Council period strategy
Presentation of the division of labor between the procurement items in industry selected strategic
sectors into the Mayor's budget negotiations. Ongoing tracking.
Updating the roadmap for strategic procurement in the city
for next year. Reporting on tracking data.
January
OOPERATIONAL PREPARATION
GROUP
June
October March
Procurement risk assessment as part of risk
analysis
PROCUREMENT COORDINATION
GROUP
OPERATIONAL PREPARATION
GROUP
OPERATIONAL PREPARATION
GROUP
On the industry's management team agenda
PROCUREMENT COORDINATION
GROUP
On the industry's management team agenda
On the agenda of the City Executive Team
On the agenda of the City Executive Team
OPERATIONAL PREPARATION
GROUP Monitoring and evaluation of strategic
procurement
COMMUNICATION AND MARKET DIALOGUE
Monitoring and evaluation of strategic
procurement
INTERNAL OPERATIONAL MODELS THE PROCUREMENT COORDINATION GROUP • Send and receive messages conveying information about
strategic procurement in industries • Updating the procurement roadmap • Presentation of own timely procurements • Handling and combining needs and ideas recorded in an
shared electronic tool • Identifying possibilities for cooperation • Selection of procurement communications priorities
(thematic priorities and strategic procurements) • Design and implementation of business forums to support
business • Shares information, the procurement center will execute
short sparring sites as needed
21.1.2015 16
Preliminary evaluation of procurement strategy
Background information
The procurement target, need.
Organizations that are involved and
impacted
Potential Benefits (Points per Category
0-10)
1. Productivity / savings potential Small Moderate Large
2. Potential for improving service quality Small Moderate Large
3. Environmental impacts and
improvement of resource wisdom
Small Moderate Large
4. Social impacts on different population
groups
Small Moderate Large
5. Cooperation benefits within the city Small Moderate Large
6. Market readiness to meet the city's
needs
No ready
solutions Semi-finished,
requires
experiments
Available
solutions are
available
7. Possibility of duplication of the
solution in the market
Small Moderate Large
8. Local innovation and growth potential Minor Moderate Large
9. Risk potential Small Moderate Large
Practical implementation
• Procurements are management, not a separate issue
• As the operating environment and needs change, the road map will need to be updated and completed
• Forecasting supports the coordination of development projects and helps identify strategic development targets.
• The introduction of the model requires a change in work processes:
• Foresight in procurement planning
• Strengthening the city's internal cooperation
• Creating new practices for business collaboration and interaction
• The change is implemented through pilot procurements directly in the industries
• The change is supported by the introduction of a continuous market dialogue model and service molding of communication regarding strategic procurements
Starting point:
• Strategic planning of procurement is
part of the city's overall planning and
operating cycle.
• As a rule, existing structures are utilized
• The Coordination Group and the
Operational Group support the
development of strategic procurement
COMMUNICATION AND MARKETING
• The most important goal is to identify and reach businesses that have what the city needs, or the willingness to develop it – How to reach with the information and how to attract interest in the
city as a client
• Engaging our own staff and training communication skills
• Procurement message and speech with all business communications and collaboration
• Newsletter
• Market spirit in the preparation phase of procurement
• An inspiring and integrating future procurements website
21.1.2015 19
CHALLENGING THE MARKETS
• VANTAA IS BUYING - EVENTS – Every month
– Future need for interesting procurement, for which something new is particularly desired and needed from companies
– Prepared in the coordinating group at a citywide level
– Business activity is responsible for corporate contact
– The city's messaging is complemented by digital marketing tools as needed
– A permanent approach with a clear process (timetable, goal, co-operation practices, utilization of knowledge, and development of competence)
21.1.2015 20
As a result
City challenges and procurements - the city's needs
Market dialogue - the markets implement responsibility
Promote partnerships Innovation promoting procurement-
co-development, piloting
Development of competence
Leadership = productivity
Learning = Better Results
Communication = informing of
goals
Effectiveness = implementation of the strategy
Co-operation = vitality, external
resources
STRATEGY OBJECTIVES
Work situation (2)
• Urban Agenda -partnership Innovative and responsible procurement
• KEINO – network-based expertise center collaboration
• 10 municipalities in the procurement network
• Finnish Purchasing and Logistics Association LOGY's procurement forum team – Public procurement team
– Responsibility team
21.1.2015 22
Objectives of the EU Urban Agenda partnership • Integration of procurement management into a management system
– How should this be done in the city organization? – What are the challenges facing the city and how do market players
respond to this challenge? – How does the city collaborate with different actors? – Understanding the roles of different actors and coordinating
cooperation and goals
• How to respond to rapidly changing business environment challenges
• Production of reliable supply and analysis models
• Identifying effective market dialogue models and creating a partnership
• Development and experimentation of procurement methods
• Development of know-how and knowledge sharing
• Development of financial instruments for the needs of cities
Work schedule and monitoring & evaluation
• BF funding until 10/2019 – Reporting progress 2 times a year
– Make an internal query on the success of the operating model implementation
• Monitoring the Strategy Program – 2 x to the City Council during council periods in conjuntion with mid-
term and final evaluations
– Tip of the spear objective: Strategic procurement supports the city's strategic goals
– Measure: Annual measurement of environmental, business, social and cost/productivity impacts, realized as a questionnaire for road map procurements
21.1.2015 26
IMPACT AND MEASUREMENT
• We need spending information and its analysis
• We need linking of financial information to procurement contracts
• We need monitoring of the achievement of the strategic goals and measuring of the procurement contracts
• There is a need for operating models, know-how and electronic tools to monitor strategic goals at a contract level
• Analytical know-how is needed in order to evaluate the quality/magnitude of the effectiveness of the performance (9 categories) of the contractual work and its results
21.1.2015 27