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G e t y o u r G r e e n S u p p l i e r s o n B o a r d
procurement workshop
FMANZ Summit
Villa Maria -- May 2015
Strategies for FM procurement Innovative & Green Suppliers
Please leave your name & email You will receive our info package & survey
Check: CIPS meetings & the Internet Check: FMANZ Master class & AUT - MBA
“And stop calling it a family holiday !!”
. . G e t Yo u r G r e e n S u p p l i e r s o n B o a r d . .
Get Your Green Suppliers on Board
procurement workshop
FMANZ Summit
Villa Maria - May 2015
with Anne Staal
Strategies for FM procurement Innovative & Green Suppliers
Please leave your name & email You will receive our info package & survey
Check: CIPS meetings & the Internet Check: FMANZ Master class & AUT - MBA
This publication uses work of others for educational and research purposes - please check the references.
Procurement = easy !?
Buy or
Make
wheel
A Dutchie in New Zealand
Industry experience (15 years)
Large (international) organizations include positions of supply chain manager, B2B
account manager, procurement manager, project manager and consultant.
Senior lecturer (6 years)
At the Hanze University - School of Facility Management (with 1000 students). Teach
change management, marketing & procurement to (under)graduates. Supervise final
bachelor theses. Teaching to a wide range of students in different settings. Teach
FMANZ master classes at AUT.
Applied research (3 years)
Started PhD in NOV13. Specialize in management of innovation & procurement.
Research context is construction & sustainability. Thesis ready: AUG / DEC 16.
Background
BEng, MA, DMS, MBA
Dutch; married, 2 kids.
We live on the Shore near the beach
4
This workshop
 Trends in procurement & innovation
 Others using green & innovative suppliers
 Three discussions & takeaways: how can we manage?
5
LATER: more info & brief survey
No man steps in the same river twice: it’s
not the same river & he’s not the same man.
Change is Constant Heraclitus 6
We do not live in changing times
but move into a new era in history
Professor Jan Rotmans - Erasmus University
at the ASITO Facility Management Conference – March 2015
7
But what exactly is GREEN?
Hill (1915)
That depends on what you want &
what the market thinks is possible !
Money
Environ-
ment
People
Culture
generate profit while improving
societal & environment conditions
8
sustainable business network NZ: www.sustainable.org.nz
From (conflicting) overlapping perspectives
slowly moving towards a nested model
to…from…
9
Giddings: Environment, Economy & Society – fitting them into sustainable development (2012)
There’s more than money …
10
What Gross Domestic Product (GDP) does & does not measure
Deutsche Bank Research - Measures of Wellbeing (2006)
Waves of innovations (1)
Hargroves & Smith (2005) | McKinsey report (2013)
11
… of Innovations (2)
12
Gartner: Annual Technology Report (2014)
Circular model & cost saving potentials
EllenMacArthur Foundation: Report on European Circular Economy (2013)
Computers & office
machinery NZ 150 mio ?
Furniture NZ 500 mio ?
13
(p.a.)
example
Green drives (will drive) business & innovation
… it will take some time …
(WBCSD => 2050)
14
?2050?
BUT: Customer strategies  green?
15
Example next slide
Treacy & Wiersema: Discipline of Market Leaders (1997)
YES: LEAN equals GREEN
16
Website: goleansixsigma.com (2015)
example
Improvements AND Innovations
17
Procuring: Simpson ice traders vs fridges
2015: portable ice maker
18
… it will take some time …
(WBCSD => 2050)
1 minute video
Source: Informed procurement decision-making – a guide for government agencies (2014)
Zooming in: NZ
19
IT projects
39%
ZOOMING IN: Current FM procurement
20
• Procurement often & still cost-driven
• Global sourcing is best-practice,
often at low-cost
• Outsourcing 50 – 90% of turnover
• Services more important than goods
BUT:
• Risks associated with global sourcing
have impact on sustainability & profits
• Total costs & life-cycle perspectives
• Procurement becomes a key player
Johnsen: Purchasing & Supply Chain Management (2014)
21
• FM procurement 2 billion NZD?
• Still technical focus & business continuity
• Not yet hospitality & value-driven?
• More or Less outsourcing?
• FM users want: Delivery instead of Lowest price?
• Often lot of suppliers; tough contract mgmt
• No whole-of-life costs; short-term outcomes
• Multi-service contract vs specialist supplier?
• Suppliers bear risk & liability
• Service levels at target cost; averse relationships
• Improving Service Levels & Service Delivery
ZOOMING IN: Current FM procurement
NZCIC, 2006; Hinton 2013; Van Weele 2010; FMANZ Masterclasses; Programmed, 2014
FM – Times are Changing
22
What can we learn from others on:
Innovation & Green procurement?
100 Hungarian SMEs
Public green procurement
(1)
(2)
(3 & 4)
23
1 Big-firms went GREEN 24
1 Big-firm behaviour prevents
suppliers from delivering more value
Hughes & Weiss: Kraft Food - Getting closer to key suppliers (2007, cited in Johnsen 2014)
25
DISCUSSION 1 – what Big-Firms do
6 minutes with your neighbour(s)
please use the format
26
1) Rank the group’s TOP 3 barriers (3 min)
2) Discuss underlying reasons (3 min)
2 Why green procurement … (a)
Vörösmarty: SME research at Budapest University. IPSERA (2015)
WHY: Attitude % of responses
Avoidance of negative effects (Avoidance) 13%
Compliance to expectations (Compliance) 58%
Achievement of positive goals (Positive) 28%
WHY: Motivation Scale 1-5
Regulation & Law 4.2
Cost saving targets 4.0
Customer demand 4.0
Top management support 3.9
Procurement value 3.9
109 Hungarian SMEs
These SME are
probably ‘front-runners’
27
2 What these 109 SMEs did (b)
1. Require product content restrictions
2. Supplier evaluation with environmental requirements for purchased items
3. Supplier evaluation with environmental requirements for packaging
4. Supplier must disclose the environmental attributes of product content
5. Supplier evaluation with environmental requirements for the suppliers operations
6. Supplier must have ISO 14000
7. Product lifecycle analysis is part of supplier evaluation
8. Suppliers must commit to waste-reduction goals
9. Environmental assessment of suppliers' processes
10. Setting environmental standards for suppliers
11. Cooperation with the suppliers to develop environmentally better products
12. Educate suppliers about environmental issues
(In decreasing order)
28
109 Hungarian SMEs
Vörösmarty: SME research at Budapest University. IPSERA (2015)
29
1) Rank the group’s TOP 3 topics (3 min)
2) Discuss how to realise this TOP 3 (3 min)
2 DISCUSSION– what those SMEs did
6 minutes with your neighbour(s)
please use the format
3 Different & more relationships?
Stakeholders needed for low-energy buildings
(Source: WBCSD)
 It depends on Money & Risk
30
Public Procurement
www.business.govt.nz/procurement MBIE (2012)
(acquisition) (profit)
(strategic)
The Kraljics matrix does the same, but changes the X and Y axes.
31
3 GREEN procurement strategies (a)
Public Procurement
www.business.govt.nz/procurement MBIE (2012)
3 GREEN procurement strategies (b) 32
www.business.govt.nz/procurement MBIE (2012)
3 Ways of procuring services (c)
33
Output
Specification
(what supplier
sells)
Input
specification
(what supplier
needs)
Throughput
specification
(what supplier
does)
Outcome
specification
(what YOU want
in the end)
Focus on the
functionality or
the performance
of the service.
Focus on
resources &
capabilities of the
supplier to
produce the
service.
Focus on supplier
processes needed
to produce the
service.
Focus on the
economic value
for the customer
to be generated
by the service.
Van Weele: Purchasing & Supply Chain Management (2010)
Public Procurement
3 DISCUSSION– on specifications
6 minutes with your neighbour(s)
please use the format
34
1) Relate the group discussion to critical
(strategic) suppliers or services i.e. with high risk
& big money.
2) Rank the specification strategies (3 min)
3) Discuss to what extent the group is satisfied
with results from such strategies (3 min)
35
We need :
 Long-term focus: trees do not grow faster
 Combining continuous improvement & radical innovations
 Early FM-involvement to increase potential to change
 More parties involved?
4 Innovative suppliers in UK (a)
Van Weele: Purchasing & Supply Chain Management (2010)
36
Innovation pays off (in survey of 725 suppliers for public procurement) :
60 % of suppliers got more business contract because of an innovation.
AND this figure raises to 72% with more friendly public procurement.
4 Innovative suppliers in UK (b)
Rigby: OECD conference on Public Procurement (2013)
http://www.slideshare.net/STIEAS/developing-a-framework-for-measuring-public
37
4 Innovative suppliers in UK (c)
Rigby: OECD conference on Public Procurement (2013)
http://www.slideshare.net/STIEAS/developing-a-framework-for-measuring-public
innovative procurement
38
55%
85%
4 Innovative suppliers in UK (d)
Rigby: OECD conference on Public Procurement (2013)
http://www.slideshare.net/STIEAS/developing-a-framework-for-measuring-public
39
1) Rank the TOP 4 of the groups’ organisations (3 min)
2) Discuss what should change or remain the same (3 min)
4 DISCUSSION– innovative suppliers
6 minutes with your neighbour(s)
please use the format
Value stream mapping: procurement savings
40
Johnsen: Purchasing & Supply Chain Management (2014)
Simple or Complex – keep an open dialogue
ADS: 21st Century Supply Chains - relationship management tools (2012)
41
Structured problem solving
(within contract & development management)
42
Talking money & examples
NZBCSD: Sustainable Procurement in Government (2010)
43
Some reasons for doing nothing …
1. Short-term interest & other priorities
2. Market failure – we cannot find suppliers
3. Too high in uncertainty & risks
4. We’d rather be a steady follower with better results
5. No best-practices available
6. I will retire next year
7. No resources – no business case
8. We are satisfied with the status-quo
44
45
1 Big firms
2 Hungarian SMEs
3 Specifications
4 Innovation
Wrapping up …
Thank you
46
• You will receive
- slides & collected
information.
- a brief survey on:
o Today’s topic
o I&G suppliers
Check the AUT - FMANZ Master classes
Check the new AUT - MBA procurement paper
Check the Sustainable Business Network
Or check the CIPS educational offering in NZ

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Get green & innovative suppliers on board - All slides used for FMANZ Summit Workshop May 2015

  • 1. G e t y o u r G r e e n S u p p l i e r s o n B o a r d procurement workshop FMANZ Summit Villa Maria -- May 2015 Strategies for FM procurement Innovative & Green Suppliers Please leave your name & email You will receive our info package & survey Check: CIPS meetings & the Internet Check: FMANZ Master class & AUT - MBA “And stop calling it a family holiday !!” . . G e t Yo u r G r e e n S u p p l i e r s o n B o a r d . .
  • 2. Get Your Green Suppliers on Board procurement workshop FMANZ Summit Villa Maria - May 2015 with Anne Staal Strategies for FM procurement Innovative & Green Suppliers Please leave your name & email You will receive our info package & survey Check: CIPS meetings & the Internet Check: FMANZ Master class & AUT - MBA This publication uses work of others for educational and research purposes - please check the references.
  • 3. Procurement = easy !? Buy or Make wheel
  • 4. A Dutchie in New Zealand Industry experience (15 years) Large (international) organizations include positions of supply chain manager, B2B account manager, procurement manager, project manager and consultant. Senior lecturer (6 years) At the Hanze University - School of Facility Management (with 1000 students). Teach change management, marketing & procurement to (under)graduates. Supervise final bachelor theses. Teaching to a wide range of students in different settings. Teach FMANZ master classes at AUT. Applied research (3 years) Started PhD in NOV13. Specialize in management of innovation & procurement. Research context is construction & sustainability. Thesis ready: AUG / DEC 16. Background BEng, MA, DMS, MBA Dutch; married, 2 kids. We live on the Shore near the beach 4
  • 5. This workshop  Trends in procurement & innovation  Others using green & innovative suppliers  Three discussions & takeaways: how can we manage? 5 LATER: more info & brief survey
  • 6. No man steps in the same river twice: it’s not the same river & he’s not the same man. Change is Constant Heraclitus 6
  • 7. We do not live in changing times but move into a new era in history Professor Jan Rotmans - Erasmus University at the ASITO Facility Management Conference – March 2015 7
  • 8. But what exactly is GREEN? Hill (1915) That depends on what you want & what the market thinks is possible ! Money Environ- ment People Culture generate profit while improving societal & environment conditions 8 sustainable business network NZ: www.sustainable.org.nz
  • 9. From (conflicting) overlapping perspectives slowly moving towards a nested model to…from… 9 Giddings: Environment, Economy & Society – fitting them into sustainable development (2012)
  • 10. There’s more than money … 10 What Gross Domestic Product (GDP) does & does not measure Deutsche Bank Research - Measures of Wellbeing (2006)
  • 11. Waves of innovations (1) Hargroves & Smith (2005) | McKinsey report (2013) 11
  • 12. … of Innovations (2) 12 Gartner: Annual Technology Report (2014)
  • 13. Circular model & cost saving potentials EllenMacArthur Foundation: Report on European Circular Economy (2013) Computers & office machinery NZ 150 mio ? Furniture NZ 500 mio ? 13 (p.a.) example
  • 14. Green drives (will drive) business & innovation … it will take some time … (WBCSD => 2050) 14 ?2050?
  • 15. BUT: Customer strategies  green? 15 Example next slide Treacy & Wiersema: Discipline of Market Leaders (1997)
  • 16. YES: LEAN equals GREEN 16 Website: goleansixsigma.com (2015) example
  • 18. Procuring: Simpson ice traders vs fridges 2015: portable ice maker 18 … it will take some time … (WBCSD => 2050) 1 minute video
  • 19. Source: Informed procurement decision-making – a guide for government agencies (2014) Zooming in: NZ 19 IT projects 39%
  • 20. ZOOMING IN: Current FM procurement 20 • Procurement often & still cost-driven • Global sourcing is best-practice, often at low-cost • Outsourcing 50 – 90% of turnover • Services more important than goods BUT: • Risks associated with global sourcing have impact on sustainability & profits • Total costs & life-cycle perspectives • Procurement becomes a key player Johnsen: Purchasing & Supply Chain Management (2014)
  • 21. 21 • FM procurement 2 billion NZD? • Still technical focus & business continuity • Not yet hospitality & value-driven? • More or Less outsourcing? • FM users want: Delivery instead of Lowest price? • Often lot of suppliers; tough contract mgmt • No whole-of-life costs; short-term outcomes • Multi-service contract vs specialist supplier? • Suppliers bear risk & liability • Service levels at target cost; averse relationships • Improving Service Levels & Service Delivery ZOOMING IN: Current FM procurement NZCIC, 2006; Hinton 2013; Van Weele 2010; FMANZ Masterclasses; Programmed, 2014
  • 22. FM – Times are Changing 22
  • 23. What can we learn from others on: Innovation & Green procurement? 100 Hungarian SMEs Public green procurement (1) (2) (3 & 4) 23
  • 24. 1 Big-firms went GREEN 24
  • 25. 1 Big-firm behaviour prevents suppliers from delivering more value Hughes & Weiss: Kraft Food - Getting closer to key suppliers (2007, cited in Johnsen 2014) 25
  • 26. DISCUSSION 1 – what Big-Firms do 6 minutes with your neighbour(s) please use the format 26 1) Rank the group’s TOP 3 barriers (3 min) 2) Discuss underlying reasons (3 min)
  • 27. 2 Why green procurement … (a) Vörösmarty: SME research at Budapest University. IPSERA (2015) WHY: Attitude % of responses Avoidance of negative effects (Avoidance) 13% Compliance to expectations (Compliance) 58% Achievement of positive goals (Positive) 28% WHY: Motivation Scale 1-5 Regulation & Law 4.2 Cost saving targets 4.0 Customer demand 4.0 Top management support 3.9 Procurement value 3.9 109 Hungarian SMEs These SME are probably ‘front-runners’ 27
  • 28. 2 What these 109 SMEs did (b) 1. Require product content restrictions 2. Supplier evaluation with environmental requirements for purchased items 3. Supplier evaluation with environmental requirements for packaging 4. Supplier must disclose the environmental attributes of product content 5. Supplier evaluation with environmental requirements for the suppliers operations 6. Supplier must have ISO 14000 7. Product lifecycle analysis is part of supplier evaluation 8. Suppliers must commit to waste-reduction goals 9. Environmental assessment of suppliers' processes 10. Setting environmental standards for suppliers 11. Cooperation with the suppliers to develop environmentally better products 12. Educate suppliers about environmental issues (In decreasing order) 28 109 Hungarian SMEs Vörösmarty: SME research at Budapest University. IPSERA (2015)
  • 29. 29 1) Rank the group’s TOP 3 topics (3 min) 2) Discuss how to realise this TOP 3 (3 min) 2 DISCUSSION– what those SMEs did 6 minutes with your neighbour(s) please use the format
  • 30. 3 Different & more relationships? Stakeholders needed for low-energy buildings (Source: WBCSD)  It depends on Money & Risk 30 Public Procurement www.business.govt.nz/procurement MBIE (2012)
  • 31. (acquisition) (profit) (strategic) The Kraljics matrix does the same, but changes the X and Y axes. 31 3 GREEN procurement strategies (a) Public Procurement www.business.govt.nz/procurement MBIE (2012)
  • 32. 3 GREEN procurement strategies (b) 32 www.business.govt.nz/procurement MBIE (2012)
  • 33. 3 Ways of procuring services (c) 33 Output Specification (what supplier sells) Input specification (what supplier needs) Throughput specification (what supplier does) Outcome specification (what YOU want in the end) Focus on the functionality or the performance of the service. Focus on resources & capabilities of the supplier to produce the service. Focus on supplier processes needed to produce the service. Focus on the economic value for the customer to be generated by the service. Van Weele: Purchasing & Supply Chain Management (2010) Public Procurement
  • 34. 3 DISCUSSION– on specifications 6 minutes with your neighbour(s) please use the format 34 1) Relate the group discussion to critical (strategic) suppliers or services i.e. with high risk & big money. 2) Rank the specification strategies (3 min) 3) Discuss to what extent the group is satisfied with results from such strategies (3 min)
  • 35. 35 We need :  Long-term focus: trees do not grow faster  Combining continuous improvement & radical innovations  Early FM-involvement to increase potential to change  More parties involved? 4 Innovative suppliers in UK (a) Van Weele: Purchasing & Supply Chain Management (2010)
  • 36. 36 Innovation pays off (in survey of 725 suppliers for public procurement) : 60 % of suppliers got more business contract because of an innovation. AND this figure raises to 72% with more friendly public procurement. 4 Innovative suppliers in UK (b) Rigby: OECD conference on Public Procurement (2013) http://www.slideshare.net/STIEAS/developing-a-framework-for-measuring-public
  • 37. 37 4 Innovative suppliers in UK (c) Rigby: OECD conference on Public Procurement (2013) http://www.slideshare.net/STIEAS/developing-a-framework-for-measuring-public
  • 38. innovative procurement 38 55% 85% 4 Innovative suppliers in UK (d) Rigby: OECD conference on Public Procurement (2013) http://www.slideshare.net/STIEAS/developing-a-framework-for-measuring-public
  • 39. 39 1) Rank the TOP 4 of the groups’ organisations (3 min) 2) Discuss what should change or remain the same (3 min) 4 DISCUSSION– innovative suppliers 6 minutes with your neighbour(s) please use the format
  • 40. Value stream mapping: procurement savings 40 Johnsen: Purchasing & Supply Chain Management (2014)
  • 41. Simple or Complex – keep an open dialogue ADS: 21st Century Supply Chains - relationship management tools (2012) 41
  • 42. Structured problem solving (within contract & development management) 42
  • 43. Talking money & examples NZBCSD: Sustainable Procurement in Government (2010) 43
  • 44. Some reasons for doing nothing … 1. Short-term interest & other priorities 2. Market failure – we cannot find suppliers 3. Too high in uncertainty & risks 4. We’d rather be a steady follower with better results 5. No best-practices available 6. I will retire next year 7. No resources – no business case 8. We are satisfied with the status-quo 44
  • 45. 45 1 Big firms 2 Hungarian SMEs 3 Specifications 4 Innovation Wrapping up …
  • 46. Thank you 46 • You will receive - slides & collected information. - a brief survey on: o Today’s topic o I&G suppliers Check the AUT - FMANZ Master classes Check the new AUT - MBA procurement paper Check the Sustainable Business Network Or check the CIPS educational offering in NZ