Problem 

The procurement function of a major infrastructure advisor was not operating optimally resulting in significant financial losses, time delays and strain on the internal team. Block 5 were engaged to perform a "Health Check" review of the function and provide a report of the findings.

The client expressed particular concern regarding the following aspects of the function and requested additional guidance in improving these areas:

• Project time frames and workloads,
• Market relationships, and
• Contract management.

Block 5 Actions

Block 5 performed an in-depth review of the client’s processes with particular focus shown to the concern areas identified by the client. This review included: Block 5 performed an in-depth review of the client’s processes with particular focus shown to the concern areas identified by the client. This review included:

• Benchmarking of the rates paid by client against other customers of similar products and services in the market,
• Internal stakeholder interviews with project managers, subject matter experts, procurement staff and executive team members,
• A detailed contract register review and analysis, and
• Procurement process review including cycle-time analysis.

Following the review, a detailed report including proposed rectification strategy was compiled using industry experience, sound understanding of best procurement practice and thorough process analysis and presented to the client.

Outcomes

Benchmarking of market rates in comparison to rates paid by the client identified a potential issue with the supply market and its interaction with the client, suggesting they were not a customer of choice. Block 5 used this data analysis to identify key players of the supply market for interview to discuss this pricing gap and provide recommendations to the client on what measures could be taken to improve their attractiveness as a customer to secure better offers from the market.

Block 5 delivered the report to the client through an executive presentation. This encouraged open discussion of the report findings and the most appropriate path towards process optimisation and rectification. Supplier feedback was relayed with a recommendation to provide greater scoping information and training where required. This would provide tender scopes with greater detail and decrease the risk margin being included from suppliers.

Further procurement analysis was recommended to isolate process issues and implement process flow changes to reduce tender cycle times. The implementation of the proposed changes would improve market relationships, decrease tender pricing, reduce strain on the business and shorten the procurement process time frames.

By conducting the Procurement Health Check, Block 5 provided expert knowledge and strategy to the client, allowing opportunity for process optimisation and increased stakeholder satisfaction.