PRCH-3020 - Public Sector Supply Chain Management PRCH-3020 - Public Sector Supply Chain Management PRCH-3020 - Public Sector Supply Chain Management frame. Supplier payments were coordinated by Purchasing and Supply through their ordering customer. Kumar was not sure how to adequately staff the department so that On November 20, Ajith Kumar, Manager of Purchasing and Supply for the City of procurement system. the increased workload could be handled. Usmildon got off the telephone frustrated. According to the Fleet Manager, Zuri Young from Environmental Services, an out-of-stock wiper blade had idled an expensive snow- The warehouse stocked items that had been purchased in bulk, these items were paid Despite the issues, Kumar knew that the long-term advantages of the new system were removal truck. Kumar was concerned that the new integrated procurement system was for using operational expense accounts. Customers could request an order from potentially great. The new system integrated previously stand-alone systems into one, affecting the department's service. How many other orders were not being processed by inventory and the Purchasing and Supply staff would pick the items and prepare for areas such as Purchasing, Accounts, Warehousing, and Payroll would all have access the new system? The situation required immediate attention. pick-up. It was the responsibility of the customer to ensure that items they used o information which reduced duplication. Integrating these systems allowed for superior regularly were in stock. Purchasing and Supply would reorder on request only. management control - supplier payments and customer orders could be tracked better, Background reports on staff productivity were available for the first time, and back-orders could be If the order was not in inventory, the office initiated one of the following procedures: filled automatically through the warehouse. Further, the integrated procurement system The City of Hamildoo had about 500,000 residents, the corporation was responsible for supported supplier performance management. These tools could ultimately help Kumar an area of 41,250 acres. The City's responsibilities ranged from police services and fire Request for Tender - for orders over $100,000 improve the efficiency of the entire buying process at the City. services to the management of parks and recreation facilities. Environmental Services Formal Request for Quotation - for orders between $50,000 and $100,000 represented the highest budget allocation due to the nature of its activities and size of Informal Request for Quotation - for orders below $50,000 Impact of Change the deparment Supplier selection was based on the principles of tendering and quoting which was Many of Purchasing and Supply's customers had not been happy with the new system; Annual budgets are determined in a four (4) year budget that identifies capital funds and lowest bidder was successful. Level of approval authority defined which order process they felt they had had lost control over some critical parts of the ordering process operational funds. Departments are allocated a certain amount of capital funds for would be used investments like road work and operational funds which are used for annual expenses. During the training on the new system, Kumar's team voiced concerns about the lower At the end of the year, any unused capital budget was withdrawn from the departments, Integrated Procurement productivity levels and the increase in work. It didn't make sense that an internet-based whereas unused operational budget was carried forward to the next year. tool would require so much additional work. Concerns continued after the launch date. A new computer system had been implemented in Purchasing and Supply a month ago. Kumar had intended to abandon the older program but was now unsure The City was accountable to the tax-paying public for its expenditures. It was the Still in the early stages of implementation, Kumar was faced with several challenges responsibility of the municipality to ensure efficient and appropriate use of the funds. that the new system brought to the department The Wiper Blade Stock-out Problem The Purchasing and Supply Department The integrated procurement system was a finance-based system that was not Kumar reviewed the wiper blade stock out problem that Young had brought him. An customizable for procurement. A disadvantage was that the tool limited online ordering order entered by Fleet was created by one of the customers who had online access. Purchasing and Supply was part of the Finance and Administration department of to ten (10) major customers only: the rest were relegated to a manual system to order The requested blade had failed to be accepted through the new system. As a result, the Uemaildoo Purchasing was mainly centralized and provided support as needed to their supplies. The previous system allowed all customers online ordering capabilities. warehouse had not received a request and it was not re-ordered. Young explained that branches of the city which included the libraries and the construction board. It also The new system provided limited order management information to the customers the snow plow that required the blade could not be used as it did not pass Health and provided warehousing services for supplies that were part of the regular materials placing orders which decreased information needed for their budget accounts. Kumar Safety's vehicle safety check. This was costing the department and the residents of the inventory, such as paper goods for the City's facilities such as toilet paper and printer found the employees disliked the order entry requirements of the new system, one of City as snow removal was delayed. Snow removal was important for road safety and to paper, as well as maintenance equipment for the fleet vehicles. Essentially, every the biggest complaints was that the new system required information to be entered on ensure emergency vehicles could reach residents or hospitals in a timely manner. service within the city departments was a customer of the Purchasing and Supply. seven (7) screens while the former system only needed manual input on one (1) screen. Many of the Purchasing and Supply team had been in the department for over ten (10) Kumar wondered what could have caused the order not to be processed? Was there The Ordering Process years and were comfortable with the old system. In their opinion, the new system human error in data entry? Errors in learning the new system? Or were there technical appeared to increase the staff workload which lowered the level of service they could glitches involved? Kumar had to solve the immediate problem for the Fleet department Individual departments initiated the process to purchase goods and services. The provide to the customers. and was concerned about similar problems with other orders. What could be done to request was sent to Purchasing and Supply, who filled the order from the warehouse, or prevent this from happening again? Could any safety measures be implemented? initiated the process of purchasing from suppliers. Supplier selection was restricted to Since there were no customization options, several ordering processes needed revision. the lowest-cost bidder and specifications set by the requesting department. Purchasing For example, for those departments who no longer had online ordering capabilities had and Supply staff tracked orders to ensure delivery occurred within an acceptable time to fax or email requisitions to the Purchasing and Supply department which required manual follow-up. Order status checks required telephone or email contact with the