WM Bargain Hunt – Energy

1. WM Bargain Hunt – Energy 4th July 2008 – Susie Owen

2. Energy: Challenges for the public sector • Minimise energy costs and manage risks in a volatile energy • market • Reduce energy use and carbon emissions • Leverage our volumes and access different levels in the supply chain • Access new sources of renewable generation • Assist new sources of generation

3. Energy Markets • Market is affected by global fundamentals • Risen and fallen by 100% up and down in 2 years • Daily prices by up to 20% • Short term and longer term markets disconnected • Gas and Electricity market most volatile in the world • Requires expertise and volume leverage to manage price risk

4. How does the public sector buy energy now? 7% of total UK consumption 8 times bigger than TESCO £3.25billion p.a

5. How can we influence energy prices? Byaggregating volumes into approved contracts Reducing supplier margins and tendering costs Demand management All costs reduced with reduction in energy use Margin Cost of proc. Using approved contracts to access wholesale markets & risk management strategies Reducing price risk Increasing Volume and opportunities Wholesale Energy Price Using approved contracts with access to advanced purchasing from generators Reducing long term price risk & increasing security of supply including new renewables Regulated charges

6. Pan Government Energy Project • MOD lead the Energy Strategy and Collaborative Category Board • 7 implementation workstreams • Buying and Risk Management • Supply chain redevelopment • Standardisation of terms and conditions • Sustainability • Aggregation • Communications • Emissions Trading

7. What are the recommendations?

8. First Step – Understand your requirements • Local Government Energy Procurement Action Plan • Developed in 2007 by London Centre of Excellence • Designed to help authorities identify and manage the key areas that enable effective and efficient energy procurement • Section B – Actions and self assessment • Data Quality • Procurement • Financial Management • Monitoring & Targeting • Performance Indicators Can be downloaded at www.lcpe.gov.uk/energy

9. Second step - Review recommended contracts • Review contracts 9 months prior to start date • OGC Contracts Database lists all enabled contracts www.ogc.gov.uk/contractsdatabase • The following organisation offer collaborative contracts • LASER – offering approved solution • OGCbuying.solutions • NHS PASA • ESPO • YPO • NEPO • The Energy Consortium (TEC) • MOD • West Mercia Have all committed to going though approval process

10. Third Step – Energy Management • Reduce Waste • Turn off • Turn down • Repair leaks damages • Heating/Lighting controls • Voltage optimisation • Investment measures, e.g. • Insulation • High efficiency lighting • Sensors • Building Management System • Power Factor • CHP • On site renewables • Microgeneration Free surveys (Carbon trust) Guidance documents FM contractors/outsource 35% of savings Salix finance OGC Contracts database 46% of savings Partnerships for renewables Supply frameworks 18% of savings

11. Carbon Trust • Richard Rugg - 020 7170 7051 • Best practice tool kits • Carbon Management programmes – 22% savings!

12. Funding Opportunities • Salix – match funding www.salixfinance.co.uk • Low carbon building programme • Partnerships for renewables • See http://www.ogc.gov.uk/commodities_procurement_energy_7109.asp

13. IT Power Management Framework • Why is it useful? • PCs are only used for 1/3 of the day • why have them always on • Power management states • Standby • Hibernate • Off 8:00 2:00 14:00 20:00 Heavy Use Moderate Use No Use

14. IT Power Management Simple Savings Possible Across an organisation with 10,000 PCs Across UK Office PCs Across UK Public Sector 1.5 billion kWh 0.38 billion kWh 0.8 million kWh 700,000 tonnes 175,000 tonnes 500 tonnes £115 million £29 million £87,000

15. 1E Public Sector Portal IT Power management guidance on OGC Contracts Database

16. For more information… • www.ogc.gov.uk/commodities_procurement_energy.asp • OGC Service Desk: • 0845 000 4999 • ServiceDesk@ogc.gsi.gov.uk • Susie Owen • susie.owen@ogc.gsi.gov.uk • 020 7271 2626

17. Thank you 4th July 2008 – Susie Owen

18. Bargain Hunt IITGP Collaboration – Fleet category Peter Norman, NHS PASA 4 July 2008

19. What I’ll cover …. • ‘Our’ objectives • Achievements so far • Our strategy – projects and enablers • What's in it for you • What I’d like from today .. • Information

20. Our objectives • Improved public sector procurement - working together – do things better • Maximise our potential – integrated strategy • Align policy with commercial delivery • Be more strategic with supplier base • Help deliver CSR07 objectives – national and local

21. Achievements so far • Excellent start (CSR04) – pan government contracts available: vehicle purchase / lease (joined up), tyres, glass – enabled deals • £750m throughput • Process and contract efficiencies – savings! • Grey Fleet policy development • Category board and strategy team established • Data collection / market mapping > • More pan enabled contracts – on the money - ww.rce.gov.uk

22. Strategy Development • Three core elements • Securing compliance: aggregate in scope fleet expenditure onto best-in-class pan-government frameworks. • Influencing policy: i) position the collaborative category as a key delivery arm for core policy drivers (e.g. reducing CO2 emissions); ii) use commercial profile to influence transport policy effectively. • Leverage Scale: deploy improved control and influence to re-engineer public sector fleet supply chain through strategic key supplier management.

23. Securing compliance – gaining control of spend and data Integrating policy and commercial aims Supply chain management Seven key projects… • Uptake > • commercial vehicles • fuel cards • spot hire • grey fleet • standardisation • fleet management

24. Project Support Functions (“Enablers”) • Enabling support functions will: • Assist delivery of agreed projects and benefits • Identify new project opportunities • The enabling functions have been identified as: • Project Management Office (PMO) • Marketing & Communications • Market Intelligence • Supplier Engagement • Policy • Strategy Development • Relationship with other Collaborative Categories

25. What’s in it for you? • Best in class frameworks (now? In the future) / contracting solutions • Fleet ‘forum’ – knowledge sharing , peer support, policy review, shared initiatives • Standardisation – best in class specification / learning process • Policy / best practice support – Grey Fleet – www.pasa.nhs.uk

26. Your first step….. • Complete a data form – builds understanding and helps begin shared thinking. • Identifies quick wins – both ways! • Provides focus and feeds strategy / new [potential] projects Are people willing to complete the form?

27. What I’d like from today • Communicate what ‘we’ are up to and understand what you are up to in fleet • Join both together – understand and feed strategy • Communicate how to join contracts • Introduce the uptake team • Begin to work together

28. Information • TGP generally / collaboration (pilots) – OGC Website www.ogc.gov.uk • Fleet frameworks - OGC Helpdesk - ServiceDesk@ogc.gsi.gov.uk • Uptake – • peter.norman@pasa.nhs.uk (North, WM, SW) • DavidOlima@ogc.gsi.gov.uk (South) • Barnaby.Wiles@ogc.gsi.gov.uk

29. Thank you Peter Norman NHS Purchasing and Supply Agency 80 Lightfoot Street Chester CH2 3AD (T) 0151 427 4653 (M) 07768 357876 (e) peter.norman@pasa.nhs.uk

30. West Midlands Regional Improvement & Efficiency Partnership BARGAINHUNT II4th July 2008 West Midlands Regional Improvement And Efficiency Partnership (WM RIEP) BPI / LEAN SYSTEMS THINKING FRAMEWORK AGREEMENT Ged Bowles Jane Daly WM RIEP

31. Purpose of Session • To provide: • An overview of the WM RIEP approach to supporting business transformation • A model for delivering BPI/ Lean Systems Thinking as an integral part of the wider Improvement and Efficiency agenda • A summary of the WM RIEP Framework Agreement for BPI / Lean Systems Thinking • Some examples of activity to date

32. CSR07 Efficiency Challenge • The 3% Cashable Efficiency Target for West Midlands Region over the next three years equates to:- • £514m on top of ‘balancing the books’! • CLG believe that this figure is likely to be made up from: • Procurement 54% • Process Improvement 37% • Asset Management 6% • Other activity 3%

33. Efficiencies are derived from: • Economies of Scale • Traditional procurement practices • Bulk purchasing • Shared services

34. Efficiencies are derived from: • Economies of Flow • Streamlining the processes • Getting things done right first time • Removing waste and blockages • Economies of Scale • Traditional procurement practices • Bulk purchasing • Shared services

35. WM~RIEPProgrammes Core Change Support Capacity Supporting Transformational Change in Work Programmes

36. ‘BPI didn’t work for us’ • Has BPI been successful in your organisation?

37. ‘BPI didn’t work for us’ • Has BPI been successful in your organisation? • ‘to an extent’.

38. ‘BPI didn’t work for us’ • Has BPI been successful in your organisation? • ‘to an extent’. • Why didn’t it work?

39. ‘BPI didn’t work for us’ • Has BPI been successful in your organisation? • ‘to an extent’. • Why didn’t it work? ‘Not enough buy-in’

40. ‘BPI didn’t work for us’ • Has BPI been successful in your organisation? • ‘to an extent’. • Why didn’t it work? ‘Not enough buy-in’ ‘Not enough investment’

41. ‘BPI didn’t work for us’ • Has BPI been successful in your organisation? • ‘to an extent’. • Why didn’t it work? ‘Not enough buy-in’ ‘Not enough investment’ ‘Too expensive and didn’t deliver a lot’

42. ‘BPI didn’t work for us’ • Has BPI been successful in your organisation? • ‘to an extent’. • Why didn’t it work? ‘Not enough buy-in’ ‘Not enough investment’ ‘It wasn’t sustainable’ ‘Too expensive and didn’t deliver a lot’

43. ‘BPI didn’t work for us’ • Has BPI been successful in your organisation? • ‘to an extent’. • Why didn’t it work? ‘Not enough buy-in’ ‘Not enough investment’ ‘It wasn’t sustainable’ ‘It was done to us and we weren’t really involved’ ‘Too expensive and didn’t deliver a lot’

44. ‘BPI didn’t work for us’ • Has BPI been successful in your organisation? • ‘to an extent’. • Why didn’t it work? ‘Not enough buy-in’ ‘People were worried about their jobs’ ‘Not enough investment’ ‘It wasn’t sustainable’ ‘It was done to us and we weren’t really involved’ ‘Too expensive and didn’t deliver a lot’

45. ‘BPI didn’t work for us’ • Has BPI been successful in your organisation? • ‘to an extent’. • Why didn’t it work? ‘Not enough buy-in’ ‘People were worried about their jobs’ ‘It worked in one area but hasn’t caught on elsewhere’ ‘Not enough investment’ ‘It wasn’t sustainable’ ‘It was done to us and we weren’t really involved’ ‘Too expensive and didn’t deliver a lot’

46. ‘BPI didn’t work for us’ • Has BPI been successful in your organisation? • ‘to an extent’. • Why didn’t it work? ‘It worked for a while but we’ve gone back to our old ways’ ‘Not enough buy-in’ ‘People were worried about their jobs’ ‘It worked in one area but hasn’t caught on elsewhere’ ‘Not enough investment’ ‘It wasn’t sustainable’ ‘It was done to us and we weren’t really involved’ ‘Too expensive and didn’t deliver a lot’

47. ‘BPI didn’t work for us’ • Has BPI been successful in your organisation? • ‘to an extent’. • Why didn’t it work? ‘It worked for a while but we’ve gone back to our old ways’ ‘Not enough buy-in’ ‘People were worried about their jobs’ ‘It worked in one area but hasn’t caught on elsewhere’ ‘Not enough investment’ ‘It wasn’t sustainable’ ‘It was done to us and we weren’t really involved’ Etc. ‘Too expensive and didn’t deliver a lot’

48. What needs to change? • In order to make it work we must: • Carry out the process improvement work, • but recognise that BPI is just a tool.

49. What needs to change? • In order to make it work we must: • Carry out the process improvement work, • but recognise that BPI is just a tool. • Most importantly, we must:

50. What needs to change? • In order to make it work we must: • Carry out the process improvement work, • but recognise that BPI is just a tool. • Most importantly, we must: • Change the way we think!