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Utility Procurement 2004. Utility Procurement 2004 Presenter: Albert A. Stephens, CPM Director of Supply Chain Management Los Angeles Department of Water and Power. - PowerPoint PPT Presentation
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Utility Procurement 2004
Utility Procurement 2004
Presenter: Albert A. Stephens, CPMDirector of Supply Chain Management
Los Angeles Department of Water and Power
Supply Chain Management with e-Commerce Solutions
Provide Savings, Access Parity, Quality Products and Services For Less
• Established in 1902 to deliver water
• Electric distribution began in 1916
• Today, largest municipal utility in the nation
• 2003-2004 Budget: $3.04 billion (water and electric)
LADWP Quick Facts
• 5 – member Board of Water and Power Commissioners
• Appointed by the Mayor
• Confirmed by the City Council for 5-year term
LADWP Quick Facts
• Workforce: 8,100 employees
• Area Served: 464 square miles
• Population Served: 3.8 million residents
• 2025: 30% growth expected
LADWP Quick Facts
• Water Usage: 194 billion gallons
• Residential: 427,627 acre-feet (64%)
• Commercial/Gov: 146,575 acre-feet (24%)
• Industrial: 22,393 acre-feet (3%)
• Other: 67,030 acre-feet (6%)
• Pipe: 7,100 miles
Water Service Connections: 670,000
• Total Generating Capacity: 7,000 megawatts
• Los Angeles Peak Demand: 5,200 megawatts
Electric Service Connections: 1.4 million
• Residential: 6,531,813 megawatt-hours (30%)
• Commercial: 12,901,820 megawatt-hours (59%)
• Industrial: 2,382,942 megawatt-hours (11%)
• Number of Poles: 290,239
• Number of Street Lights: 250,000
ELECTRICITY USAGE
• Caucasian: 55.1%
• Hispanic: 40.3%
• Asian: 10.4%
• African American: 7.6%
• Native American: .9%
CUSTOMER DIVERSITY
Seems impossible?
MISSION POSSIBLE
Supply Chain Management and e-Procurement Goals
• Increase access to the local and diverse business community
• Have accurate and timely reporting for purchase, procurement, construction, and professional services contracts
• Improve the efficiency of the Department’s internal buying operations
• Increase accountability and control
• Reduce the processing time from requisition to award through payment
Supply Chain Management and e-Procurement Goals
ACCOMPLISHMENTS
• Business Process Improvements– Eliminated the number of outdated policies by 2/3
• Restructured Buyer Groups and Process Flow– Implemented new review and approval process for all requisitions
• Utilized Technology Tools– e-commerce solutions– Transparent purchasing process– Decreased processing time– Increased diverse business contract awards– Increased accountability and control
• Supply Chain/CPS Internal Accomplishments– Comprehensive internal training program– Collaborative efforts (Accounts Payable)– Supply Chain Links Newsletter– Customer Survey/Forums
Accomplishments
COST SAVINGS
• Implemented a cost savings program that will save the Department $20 million per year by 2004
• Currently with 60% implementation, hard savings are $10.3 million to date
• Reduced processing time by an average of 35% from contract requisition to award
• 57% savings in processing informal bids
Cost Savings
Cost Savings for BiddingNETTM
For Period 1/2002 – 3/2004
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
Series2 Series1
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
Series2 Series1
Savings: $12,160,355
Avg. Monthly Savings: $450,384
Cost Savings
Source: FSO Study, November 2002
Measurable Improvements
*Projected figures based on contract dollars awarded through April 2003.
Diverse Business Enterprise Activity
*Projected figures based on contract dollars awarded through April 2003.
Diverse Business Enterprise Activity
*Projected figures based on contract dollars awarded through April 2003.
Diverse Business Enterprise Activity
*Projected figures based on contract dollars awarded through April 2003.
SUPPLY CHAINMANAGEMENT
The ‘three T’s’ to optimize the supply chain processes and
structures:
• Time
• Transparency
• Trust
Source: Dr. Richard
Wilding Cranfield School of Management, UK
Conceptual Overview:DWP Supply Chain Implementation Progression
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PURCHASING
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Paper Meetings Files, Copies Turf Claims Snail Mail, Telephone, Fax, Email Reactive Development of Services
Conceptual Overview:DWP Supply Chain Implementation Progression
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SUPPLY CHAIN
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Internet & Intranet Document Management Work Flow System Procure Essentials Advanced E Mail, Pager, Cell Phone Proactive Client Services Static Helpdesk, File Sharing Transparency Menu Driven Systems Cost Savings Increased Supplier Access Inventory Management
Conceptual Overview:DWP Supply Chain Implementation Progression
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VALUE CHAIN
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Internet, Intranet, Extranet Work Enhancement Logistics, Contract Management Economic Development Market Tracking By Information Push Interactive Catalog Auto Response Help Increased $ Availability Follow-Me Communications Hyperlink File Navigation Supplier Access Parity
Seems impossible?
MISSION POSSIBLE
Supply Chain Management and e-Procurement Goals
Supply Chain Management with e-Commerce Solutions
• Savings – Time and Dollars
• Access Parity
• Quality Products and Services For Less
Utility Procurement 2004
Presenter: Albert A. Stephens, CPMDirector of Supply Chain Management
Los Angeles Department of Water and Power