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Goals and means of a saving programme Ministère de l’économie des finances et de l’industrie.

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Presentation on theme: "Goals and means of a saving programme Ministère de l’économie des finances et de l’industrie."— Presentation transcript:

1 Goals and means of a saving programme Ministère de l’économie des finances et de l’industrie

2 Ministère de l’économie des finances et de l’industrie - Réduction des coûts et nouvelle organisation des achats 7 mars Le ministère de l’économie des finances et de l’industrie  employees Headquarters employees  6 distinct territorial networks, 7000 establishments Dg Taxation, Dg Treasury, Dg Customs, Dg Statistics and economical studies, Dg Competition and consumer protection, Dg Industry  Some 400 autonomous managing units each manager was responsible for his procurement  annual procurement: 1.9 billion euros 5 main domains : real estate, IT, Postal expenditure, provision of services, general supply  1,1 million commercial transactions yearly 50% < 100€ no standardisation, no aggregation

3 Ministère de l’économie des finances et de l’industrie - Réduction des coûts et nouvelle organisation des achats 7 mars Brother, can you spare € 150 million ? Objective within three years reduce expenditure level by 150 M€ Principle autonomy and responsability of managers  Obligation : conciliate autonomy of managers with procurement efficiency

4 Ministère de l’économie des finances et de l’industrie - Réduction des coûts et nouvelle organisation des achats 7 mars : decision to reassess completely the procurement processes and organization within the Minéfi 3 stages 1) Cartography. Analyse expenditure and assess strengths and weaknesses 2) Set out a saving plan with timetable and quantified objectives 3) Create new organization to carry out the plan Identify best practices accross sister organizations Recourse to a consultancy with experience of procurement reform in large firms

5 Ministère de l’économie des finances et de l’industrie - Réduction des coûts et nouvelle organisation des achats 7 mars Cartography : Example of office stationery average consumption per employee varies from 1 to 2 Unit prices of identical or equivalent goods vary from 1 to 8 Source : Etude Capgemini 2004 Procurement practices and results vary greatly average 1,5 1,9 1,7 2,0 1,4 0,9 0,0 0,5 1,0 1,5 2,0 2,5 ACDGIDGCPDGDDIDARPMIDGCCRFINSEEAutres Ecart par rapport à la moyenne MINEFI

6 Ministère de l’économie des finances et de l’industrie - Réduction des coûts et nouvelle organisation des achats 7 mars Cartography : Example of office stationery suppliers panel Why do we do proportionaly less business with the leaders ? Most of the suppliers make a turnover of less than 1000 € with the MINEFI Procurement is divided among more than suppliers The first 730 (5%) represent 80% of the segment Source : Xerfi et Etude Capgemini 2004 Number of suppliers by turnover category plus de 1ME de 500kE à 1000kE de 50kE à 500kE de 1kE à 50kE de 100E à 1kE moins de 100E NB Fournisseurs 4,3% 4,2% 2,5% 0% 8% 11,5% 6,1% 5,3% 11,8% 1,0% 0,0% 1,0% 2,0% 5,0% 0% 2% 4% 6% 8% 10% 12% GuilbertLyrecoJM BruneauJPG Staples Office dépôt SpicersSACIDYADEM French market MINEFI market Market share by supplier

7 Ministère de l’économie des finances et de l’industrie - Réduction des coûts et nouvelle organisation des achats 7 mars The saving plan was established on each segment by working groups associating all actors Objectives Make buyers, prescribers and users work together Consider that no question is taboo Distinguish high/ low stakes from easy/ difficult to obtain Seek as much consensus as possible on saving possibilities Quantify and plan saving over time

8 Ministère de l’économie des finances et de l’industrie - Réduction des coûts et nouvelle organisation des achats 7 mars Four main levers to obtain saving Aggregate quantities Make buyers more professional Simplify processes Master consumption

9 Ministère de l’économie des finances et de l’industrie - Réduction des coûts et nouvelle organisation des achats 7 mars On each segment combine legal and technical tools to obtain optimal result Objectives Better and more frequent competition Less operating costs Example : procurement of PCs Prerequisite: standardisation, reasonnable knowledge of quantities likely to be ordered in the next period, good knowledge of supply market National frame contract Division into lots according to the supply market lot CPU lot screens lot laptop « Multi awarding » 3 suppliers selected on each lot for the duration of the contract Every 4 months second stage competition, e-auction between the 3 selected suppliers local units pass orders directly and exclusively to the winner of the e- auction   +  +++

10 Ministère de l’économie des finances et de l’industrie - Réduction des coûts et nouvelle organisation des achats 7 mars E-auctions are efficient … laptops best previous price1st auction2nd auction CPUs Best previous price1st auction2nd auction Screens Best previous price1st auction2nd auction Best previous MINEFI price, Spring st auction oct nd auction feb 2005 CPULAPTOPSreen prices of hardware PCs

11 Ministère de l’économie des finances et de l’industrie - Réduction des coûts et nouvelle organisation des achats 7 mars but every silver cloud has a dark lining Advantages  E-auction is a good substitute to negotiation  E-auction encourages professionalism because it requires carefully prepared files  Costs are low (4 to 10 k€) compared to the benefits  Standard and easy to access technologies. No difficulties for suppliers, even SMEs. Risks  too much stress on price means more risks on quality. Loopholes in specifications are thus specially dangerous.  technical problems are a new possible cause for litigations.  Make more difficult to react to abnormally low tenders  Too much efficiency? « abuse of dominating position »? incentive to collude?

12 Ministère de l’économie des finances et de l’industrie - Réduction des coûts et nouvelle organisation des achats 7 mars Towards the complete dematerialisation of the procurement process needs assesment Preparation of contracts Purchase orders deliveriesControls Paymentscontracting users information Minefi Intranet All contract notices and specifications online E-tenders: cannot be barred, cannot be made mandatory e-catalogs e-ordering Buying card inverted e-auctions accounting system

13 Ministère de l’économie des finances et de l’industrie - Réduction des coûts et nouvelle organisation des achats 7 mars Mastering consumptions: a complex task with high saving stakes Objective reduce quantities Example : « printing solutions » segment Save on printers and copiersReplace individual printers by online copiers Set out norms for printer rate (from 1.4 employee/printer in 2005 to 4 emp./print. in 2009) and implement them. Abandon inkjet do not print or else print recto-verso Save on consumables Save on paper

14 Ministère de l’économie des finances et de l’industrie - Réduction des coûts et nouvelle organisation des achats 7 mars How do you figure out efficiency of procurement, compare your prices with public prices? with your previous prices? do you take account of the market evolution (up or down)? and how do you relate it to cash saving? e.g.: buying more goods for the same money is not a saving Urgent need of a measuring system


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