Utility Procurement 2004 Utility Procurement 2004 Presenter Albert

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Utility Procurement 2004

Utility Procurement 2004

Utility Procurement 2004 Presenter: Albert A. Stephens, CPM Director of Supply Chain Management Los

Utility Procurement 2004 Presenter: Albert A. Stephens, CPM Director of Supply Chain Management Los Angeles Department of Water and Power

Supply Chain Management with e-Commerce Solutions Provide Savings, Access Parity, Quality Products and Services

Supply Chain Management with e-Commerce Solutions Provide Savings, Access Parity, Quality Products and Services For Less

LADWP Quick Facts • Established in 1902 to deliver water • Electric distribution began

LADWP Quick Facts • Established in 1902 to deliver water • Electric distribution began in 1916 • Today, largest municipal utility in the nation • 2003 -2004 Budget: $3. 04 billion (water and electric)

LADWP Quick Facts • 5 – member Board of Water and Power • Appointed

LADWP Quick Facts • 5 – member Board of Water and Power • Appointed by the Mayor • Confirmed by the City Council for 5 -year term Commissioners

LADWP Quick Facts • Workforce: 8, 100 employees • Area Served: 464 square miles

LADWP Quick Facts • Workforce: 8, 100 employees • Area Served: 464 square miles • Population Served: 3. 8 million residents • 2025: 30% growth expected

Water Service Connections: 670, 000 • Water Usage: 194 billion gallons • Residential: 427,

Water Service Connections: 670, 000 • Water Usage: 194 billion gallons • Residential: 427, 627 acre-feet (64%) • Commercial/Gov: 146, 575 acre-feet (24%) • Industrial: 22, 393 acre-feet (3%) • Other: 67, 030 acre-feet (6%) • Pipe: 7, 100 miles

Electric Service Connections: 1. 4 million • Total Generating Capacity: 7, 000 megawatts •

Electric Service Connections: 1. 4 million • Total Generating Capacity: 7, 000 megawatts • Los Angeles Peak Demand: 5, 200 megawatts

ELECTRICITY USAGE • Residential: 6, 531, 813 megawatt-hours (30%) • Commercial: 12, 901, 820

ELECTRICITY USAGE • Residential: 6, 531, 813 megawatt-hours (30%) • Commercial: 12, 901, 820 megawatt-hours (59%) • Industrial: 2, 382, 942 megawatt-hours (11%) • Number of Poles: 290, 239 • Number of Street Lights: 250, 000

CUSTOMER DIVERSITY • Caucasian: 55. 1% • Hispanic: 40. 3% • Asian: 10. 4%

CUSTOMER DIVERSITY • Caucasian: 55. 1% • Hispanic: 40. 3% • Asian: 10. 4% • African American: 7. 6% • Native American: . 9%

Supply Chain Management and -Procurement Goals Seems impossible? MISSION POSSIBLE e

Supply Chain Management and -Procurement Goals Seems impossible? MISSION POSSIBLE e

Supply Chain Management and -Procurement Goals • • • Increase access to the local

Supply Chain Management and -Procurement Goals • • • Increase access to the local and diverse business community Have accurate and timely reporting for purchase, procurement, construction, and professional services contracts Improve the efficiency of the Department’s internal buying operations Increase accountability and control Reduce the processing time from requisition to award through payment e

ACCOMPLISHMENTS

ACCOMPLISHMENTS

Accomplishments • • Business Process Improvements – Eliminated the number of outdated policies by

Accomplishments • • Business Process Improvements – Eliminated the number of outdated policies by 2/3 Restructured Buyer Groups and Process Flow – Implemented new review and approval process for all requisitions Utilized Technology Tools – e-commerce solutions – Transparent purchasing process – Decreased processing time – Increased diverse business contract awards – Increased accountability and control Supply Chain/CPS Internal Accomplishments – Comprehensive internal training program – Collaborative efforts (Accounts Payable) – Supply Chain Links Newsletter – Customer Survey/Forums

COST SAVINGS

COST SAVINGS

Cost Savings • Implemented a cost savings program that will save the Department $20

Cost Savings • Implemented a cost savings program that will save the Department $20 million per year by 2004 • Currently with 60% implementation, hard savings are $10. 3 million to date • Reduced processing time by an average of 35% from contract requisition to award • 57% savings in processing informal bids

Cost Savings for Bidding. NETTM For Period 1/2002 – 3/2004 Savings: $12, 160, 355

Cost Savings for Bidding. NETTM For Period 1/2002 – 3/2004 Savings: $12, 160, 355 Avg. Monthly Savings: $450, 384

Cost Savings Source: FSO Study, November 2002

Cost Savings Source: FSO Study, November 2002

Measurable Improvements *Projected figures based on contract dollars awarded through April 2003.

Measurable Improvements *Projected figures based on contract dollars awarded through April 2003.

Diverse Business Enterprise Activity *Projected figures based on contract dollars awarded through April 2003.

Diverse Business Enterprise Activity *Projected figures based on contract dollars awarded through April 2003.

Diverse Business Enterprise Activity *Projected figures based on contract dollars awarded through April 2003.

Diverse Business Enterprise Activity *Projected figures based on contract dollars awarded through April 2003.

Diverse Business Enterprise Activity *Projected figures based on contract dollars awarded through April 2003.

Diverse Business Enterprise Activity *Projected figures based on contract dollars awarded through April 2003.

SUPPLY CHAIN MANAGEMENT

SUPPLY CHAIN MANAGEMENT

The ‘three T’s’ to optimize the supply chain processes and structures:

The ‘three T’s’ to optimize the supply chain processes and structures:

 • Time • Transparency • Trust Source: Dr. Richard Wilding Cranfield School of

• Time • Transparency • Trust Source: Dr. Richard Wilding Cranfield School of Management, UK

Conceptual Overview: DWP Supply Chain Implementation Progression PURCHASING . . Paper Meetings Files, Copies

Conceptual Overview: DWP Supply Chain Implementation Progression PURCHASING . . Paper Meetings Files, Copies Turf. Claims Snail. Mail, Telephone, Fax, Email Reactive. Development of Services.

Conceptual Overview: DWP Supply Chain Implementation Progression SUPPLY CHAIN . . Internet & Intranet

Conceptual Overview: DWP Supply Chain Implementation Progression SUPPLY CHAIN . . Internet & Intranet Document Management Work Flow System. Procure Essentials Advanced E. Mail, Pager, Cell Phone Proactive. Client Services Static Helpdesk, File Sharing Transparency Menu Driven Systems Cost Savings. Increased Supplier Access Inventory Management

Conceptual Overview: DWP Supply Chain Implementation Progression VALUE CHAIN . . Internet, Intranet, Extranet

Conceptual Overview: DWP Supply Chain Implementation Progression VALUE CHAIN . . Internet, Intranet, Extranet Work Enhancement Logistics, . Contract Management Economic Development. . Market Tracking By Information Push Interactive Catalog Auto Response Help Increased $ Availability Follow-Me Communications. Hyperlink File Navigation Supplier Access Parity

Supply Chain Management and -Procurement Goals Seems impossible? MISSION POSSIBLE e

Supply Chain Management and -Procurement Goals Seems impossible? MISSION POSSIBLE e

Supply Chain Management with Commerce Solutions • Savings – Time and Dollars • Access

Supply Chain Management with Commerce Solutions • Savings – Time and Dollars • Access Parity • Quality Products and Services For Less e-

Utility Procurement 2004 Presenter: Albert A. Stephens, CPM Director of Supply Chain Management Los

Utility Procurement 2004 Presenter: Albert A. Stephens, CPM Director of Supply Chain Management Los Angeles Department of Water and Power