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Beyond Red & Green Books.. [Away from AMS, OPs, BPs & NOLs, this is a snippet of procurement happenings around us. An informalmedium for procurement colleagues to share news, views and new developments in Procurement]

Switzerlands top posi-tion in Global Competi-

tiveness owes to Innovationsin Procurement Global Competi-tive Index 2010-11 published by theWorld Economic Forum identified govern-ment support of innovation through its

procurement processes as one of the fac-tors that had helped Switzerland retain theno 1 position in 2010-11 survey. As per the report, Switzerland retains its 1st place

position, characterized by an excellentcapacity for innovation and a very sophis-ticated business culture, ranked 4th for its

business sophistication and 2nd for itsinnovation capacity. Switzerland s scien-tific research institutions are among theworld s best, and the strong collaboration

between the academic and business sec-tors, combined with high company spend-ing on R&D, ensures that much of thisresearch is translated into marketable

products and processes, reinforced bystrong intellectual property protection andgovernment support of innovation throughits procurement processes. This stronginnovative capacity is captured by the highrate of patenting (158.95 per million in-habitants) in the country, for which Swit-zerland ranks 7th worldwide on a per capita basis. Public institutions in Switzer-land are among the most effective andtransparent in the world (5th), receiving aneven better comparative assessment thisyear than in past years. Governance struc-tures ensure a level playing field, enhanc-ing business confidence; these include anindependent judiciary, strong rule of law,and a highly accountable public sector.

Competitiveness is also buttressed byexcellent infrastructure (6th), a well-functioning goods market (4th), and ahighly developed financial market (8th) aswell as a labor market that is among themost efficient in the world (2nd, just be-hind Singapore s). (Source: http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2010-11.pdf)

Happy Birthday !!!

G u e s t E d i t o r o f t h i s

i s s u e : S h a m b h u P r a s a d

U p r e t y D e s g i n & l a y o u t :

P a y a l M . M a d a n E d i t o r i a l T e a m :

S e n a p a t i B a l a g o p a l

K a l e s h K u m a r

Procurement masters 'get strategy' findings from Accenture Study: According to Accen-

ture s 2011 research into procurement best practices worldwide, procurement organizationshave made big advances across the board in the last few years. The responses to their mostrecent survey suggest that significant progress is being made in most dimensions of procure-ment. But there s a more intriguing discovery. It is that a subset of procurement exemplars isstepping up to add value in unprecedented ways beyond the traditional ways in which pro-curement s contribution has been measured. In effect, they have a compulsion to contributevalue to their companies. In 2011, Accenture conducted the study in 432 procurement organiza-tions in companies across a broad range of industries around the world. The team supported thequantitative findings with insights accumulated from Accenture s longtime monitoring of lead-ing practices and interactions with some of the world s most thoughtful procurement officers. The analysis coveredsix key dimensions of procurement: strategy, sourcing and category management, supplier relationship management,requisition to pay, technology enablement, and workforce and organization.The Main findings of the research are:Seventy-seven percent of masters ensure they have a procurement strategy that is integrated with the corporate strat-egy as compared with 29 percent of contenders.

Ninety percent of masters provide value over and above cost savings as part of this strategy.Two-thirds of masters look beyond their first-tier suppliers to collaborate and improve their businesses only cent of contenders have the same broad view.

Only 18 percent of contenders actively monitor their suppliers performance as compared with 60 percent of masters.Eighty-one percent of masters have integrated the end-to-end source-to-pay process with technology, compared withonly 34 percent of contenders.Although masters are better at developing and attracting the best talent, only 40 percent have formal talent develop-ment programs.More interestingly, the study team found that a group of masters outperformed the weighted average compositescore of the total respondents. These masters are set apart from the contenders by their strong commitment to excel-lence in every dimension. Masters have moved from a total cost of ownership approach to one that strives to contrib-ute to social, environmental and innovation agendas (total value of ownership). In their quest to raise the profile of procurement within their organizations, executives of high-

performance procurement organizations have become compulsive contributors, con-stantly looking for ways to drive revenue growth as well as drive cost savings. Basedon an analysis of the results, Accenture has identified the hallmarks of procurementmastery

Masters get strategy and they practice it.Masters integrate effectively with their supplier networks.Masters excel at sourcing and category management.Masters manage more of their spend.Masters attract and retain the best talent.

(Source: http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture_Compulsive_Contributors.PDF)

Vol. XI Novembe

Millions in savings for UK Cabinet Office through procurement cardsThe UK Cabinet Office has said that expenditure on government procurement cards fell 45m between 2009

-10 and 2010-11 as spend fell from 387m to 342m.According to UK newspaper, The Guardian, the Cabinet Office attributed the reduction in spending to its commit-ment to drive out unnecessary costs and make the UK a leader in transparency. Francis Maude, minister for theCabinet Office, said: "We said that we would reduce spend on government procurement cards and today we havethe evidence. In the last year spend on these cards has been cut by around 10% across government."The department recently introduced new guidance on Government P-cards, designed allow public organisations tosettle payments in full at the end of each month and to ensure suppliers are paid more quickly than usual. As part of the initiative and what Maude has cited as a drive to become more transparent, it has now opened up data on depart-mental government procurement card transactions over 500.(Source: http://www.procurementleaders.com/news/latestnews/4404-millions-in-savings-for-uk)

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[A few years ago, an innovative Trainer asked his participants for a procurement course to write a storyabout procurement from their professional practice experience. In this issue we are happy to present ouGuest Editors Pick - his own story!]Long, long ago there was a small and beautiful country named PROCUREMENT. With its beauty and natural

sources, many countries, even far side of the ocean, fell in love and offered loan, credit and grant aid to support the country's development. Global Bank (GB), Con-tinental Development Bank (CDB), MICA and many donors from European countries came in rows to offer credit lines to the beauty. Well, they just included a lonecondition in their agreements that their Procurement Guidelines shall be followed.The country soon became rich with the money and in having many world class procurement guidelines gifted along with the money. As per the loan condition, thefirst main task was to construct an Office Building for the implementation of the project. BoQ done, the district procuring entity published a notice inviting bids. 23bid documents were sold, but only 3 bids were received.The Evaluation Committee, comprising of 4 persons, immediately started the process and they rejected L1 (Lowest) bid on the ground that bid security was submit-ted in local language. They declared other 2 bids (L2 and L3) also non-responsive because of their bid price being above the estimated amount by more than 10%.Unfortunately, they found all the bids non-responsive.With high pressure, to construct the building at any cost within the FY, the procuring entity looked up for a solution and the state Department sent a lady architecthaving long experience of bid evaluation under MICA projects. She reviewed the bid evaluation report and agreed with the rejection of L1 bid. However, for higher priced bids, she suggested price negotiation with the L2 bidder as it was the normal procedure under MICA Procurement Guidelines.Negotiation was conducted successfully and a contract was entered into. All were very happy with the role of the procurement expert lady. They thanked the ladyfor her wise suggestion and to show their happiness they declared her as Miss Procurement, like Miss Venezuela, Miss India, Miss World and so on.

Building construction was completed within the FY. Donors were happy with the performance of the borrower country. During one of thosemissions to celebrate the success, GB's team also visited the site and carried out post review of the contract. The team found that MICAProcurement Guidelines were followed for the contract funded by the GB. The GB team, complementing the building construction, alsdeclared the lady and the contract as Miss Procurement, albeit less one word- i.e. MISPROCUREMENT.This is the end of first part of the story. The second part begins here in, today when the poor procurement staff who got a lot of flak foMISPROCUREMNT actually arrive here to receive training to ensure not to repeat declaration of any mis-procurement in the country inyears to come.

Let this Training be instrumental in fulfilling our commitment!

This Newsletter is a collage of available articles from public domain for limited internal sharing of information. Th is does not reflect views or positions of World Bank or any of y further information contact pmmadan@worldbank.org*.

Procurement Humor :

Happy Birthday !!!AHMED, Toufiq Nov 01

ISLAM, Muhammed Riadul NSHIVDASANI, Geeta Nov 1

BALASOORIYA Prabha Nov

Guest Editors Pick :Story of Procurement

US non-manufacturing sector growth basedon procurement focus on inventory reduc-

tion Despite the global economic turbulence economic activity, the US non-manufacturing sector grew in October for the 23rd consecutive month as pro-curement professionals focused on inventory reduction, according to a newlypublished survey of North American purchasing and supply executives. How-ever, the same survey noted that US procurement leaders in the non-manufacturing sector are working to reduce inven-tories. The latest Non-Manufacturing ISM Report On Business from the US Institute of Supply Man-agement reported that sales are increasing slightly,but are still lower than they have been historically.Anthony Nieves, chair of the Institute for SupplyManagement Non-Manufacturing Business SurveyCommittee, said that, according to the Non-Manufacturing Index (NMI), eightnon-manufacturing industries reported growth in October. Even though there ismonth-over-month growth in the Employment Index, respondents are still ex-pressing concern over available labour resources and job growth. "The contin-ued strong push for inventory reduction by supply management professionalshas resulted in contraction in the Inventories Index for the first time in eightmonths. Respondents' comments are mixed and reflect concern about futurebusiness conditions." The report added that commodities up in price includedairfares; fluorescent lamps; food and beverages; freight charges; lighting sup-plies; oil products; paper products; plywood; PVC products; software mainte-nance; and steel products. (Source: http://www.procurementleaders.com/news/latestnews/4422-

procurement-professionals)

South Africa pushes for 75 per cent localpurchasing Billions of rand will be directed to South Africa

manufacturers after public sector buyers and a large number of businessesagreed to ensure 75 per cent of their purchasing is local. The Local Procurment Accord, signed on 31 October, commits businesses, public organizatcommunity groups and trade unions that signed up to it to work towards thmedium to long-term goal. A committee of representatives from these growill meet every six months to review progress. Economic developmenter , Ebrahim Patel, who was present at the signing, said: The accord brintogether the efforts of the public and private sectors and will direct billionsrand to local manufacturers. Businesses, unions and community groups ato develop purchasing strategies and analyse their supply chains to identifywhere they can buy more from local suppliers. The 84 largest companiesagreed to drive localisation for the private sector and will report annually o

their targets. The companies also agreed to eliminate collusive and unethic pricing practices in public tenders and promote competitive pricing policieMeanwhile, the South African government has committed to increase its lo

procurement using regulations that come into effect on 7 December. The rlations will empower Department of Trade and Industry (DTI) to rule that

products must be locally sourced. The government said this would include buses, power pylons, railway rolling stock, pharmaceuticals, television set boxes, uniforms and furniture. DTI minister Rob Davies told: We have a broad target of increasing the amount of suppliers of locally made goods fthe current 30 per cent to 40 per cent. We say to foreign companies: You here and manufacture and you will be eligible for public sector contracts. Ycome here and bring your goods by boat, you won t. (Source.http://www.supplymanagement.com/news/2011/south-africa-pushes-for-75-per-cent-local -purchasing/

http://www.info.gov.za/leaders/ministers/index.htmlhttp://www.info.gov.za/leaders/ministers/index.htmlhttp://www.info.gov.za/leaders/ministers/index.htmlhttp://www.info.gov.za/leaders/ministers/index.htmlhttp://www.info.gov.za/leaders/ministers/index.html