► 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
• 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.