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Engineering Success into your sourcing initiatives

Engineering Success into your sourcing initiatives. Results you can count on!. Green = 10% savings. Green = 6% savings. Adoption = 90% +. UC Procurement UCSF/B. UC’s Annual Budget = $22.5 Billion 1. Iceland. Afghanistan. Honduras. UC. 1. Source: 2011/12 budget data from UCOP website.

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Engineering Success into your sourcing initiatives

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  1. Engineering Success into your sourcing initiatives

  2. Results you can count on! Green = 10% savings Green = 6% savings Adoption = 90% +

  3. UC Procurement UCSF/B UC’s Annual Budget = $22.5 Billion1 Iceland Afghanistan Honduras UC 1. Source: 2011/12 budget data from UCOP website.

  4. UCSF/B Procurement $1.2 Billon in Annual Expenditure 100 Employees 5 Units 2 SciQuest Instances 1 awesome team!

  5. Strategic Sourcing @ UCSF/B • 4 Commodity Managers • Set strategy and provide leadership/experience • Identify the right problems we should solve • 4 Analysts • Provide situational awareness for the Commodity Managers • Solve problems • Andrew • Stays out of the way and tries not to mess it all up!

  6. Our Mentality You’re at the bottom of 2 hills deciding which to climb. Which do you choose the one on the left or one on the right?

  7. Today’s Agenda Analysis, Visibility, Superior Knowledge

  8. Project Selection • How do you choose what to work on? • How do you know what’s out there? • Do you have the ability to say No?

  9. Project Selection at UCSF/B • Rule #1: Avoid time waster really hard projects and ill scoped projects as best you can. • Rule #2: Your people’s projects are better than your bosses project or even your project. • Rule #3: Work your project to expand the scope to the greatest extent possible (Take advantage of your fixed costs).

  10. Project Selection at UCSF/B • Variable Manufacturers • Variable Distribution Channels • Variable Products • Variable Needs If I don’t have at least 1, I don’t have a bid.

  11. Discovery Do you even spend time in Discovery? How do you identify the scope of the project?

  12. Discovery at UCSF/B • Don’t find experts; become expert • Use your supply base to help you • Find a strategy for the commodity early • Really… Very early! • Good strategy trumps almost EVERYTHING • Use bids to setup the bid you really want to run.

  13. Discovery at UCSF/B • Chemicals • Knew we had to buy solvents at UCSF or Berkeley. • Didn’t exactly know which or how much exactly. • Only understood 25 of the most basic solvents. • Bid those 25 and quickly expand with winning supplier. • In 2-3 years run a much bigger bid. • Kits • 10-15 different kit types, 2 types of technology, uoms! • Miniprep is standard and common • Auction miniprep kits and use winner to grow understanding • In 2-3 years run a much bigger bid.

  14. Implementation • How do you implement? • What length do you go through for adoption?

  15. Implementation at UCSF/B • ePro is everything • Hosted catalog environment for goods • Punchout for configurable goods and services only • Help your people by “shopping for them” • If you really have the best value, then why let anything else compete with it. • Remove unnecessary and low value content • Rig search results to show your “preferred product” • The goal is 100% adoption (unless we have something better to do).

  16. Analytics • What does your analytics capability look like?

  17. Analytics at UCSF/B Stuff Happens on Campus We Measure We Observe We Take Action

  18. How we do it • Hire Smart Analysts • HIV Researcher from a UCSF Lab • BS Level Math Major from UCSD • Auto Insurance regulatory analyst • MS Industrial Engineer • BS Operations Research Analyst • Make it a goal to gain capability • Find 4 opportunities for savings generating initiatives • Empower analysts • You find it, you get credit for the bid, you get the savings! Hellerstein et al. – MAD Skills. http://db.cs.berkeley.edu/jmh/papers/madskills-032009.pdf

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