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Procurement Strategy 2019 – 2022

COMMERCIAL STRATEGY

2019 – 2022

Author: Barry Leighton, Head of Commercial Solutions

Reporting to: Stephen KirkpatrickDirector of Corporate Support

Date: April 2019

Cumbria Constabulary of 16 Version: document.docx

Commercial Strategy 2019 – 2022

Version ControlVersion Date Author Comment

V0.1 13/01/16 LH Submitted to SK for reviewV0.4 15/01/16 SCG Reviewed and added minor revisions.V0.5 18/01/16 LH Amendments completedV0.7-V0.9 19-20/01/16 SCGK/LH Final amends before submission to Informal COG.V1.0 - DRAFT 20/01/16 SCGK Circulated to C/S SMT before submission to Informal COGV1.1 - DRAFT 22/01/16 SCGK Updated to reflect comments from C/S SMT and submitted to Informal

COGV1.2 11/02/2016 SCGK Updated protective marking as ‘Not Protectively Marked.V1.2.1 12/12/2016 LH Reviewed and updatedV1.2.1 20/12/2016 LH Submitted to SK for reviewV1.2.2 9/01/2017 LH Submitted to SK for reviewV1.2.3 25/01/17 SCGK Minor amendments.

V3.0 3/01/2018 BL Major update and amendment taking account of current strategy and change of HoP. Replaces all previous versions which have failed to keep version numbers or production dates .

V4.0 16/04/2019 BL Approved by COG and PAC.

Name change to Commercial Department

Acknowledgements

Various officers and staff during consultation

Cumbria Constabulary of 16 Version: document.docxV4.0


Table of Contents

1. Executive Summary..........................................................................................................................................41.1 Introduction.........................................................................................................................................41.2 Vision and Keeping Cumbria Safe.........................................................................................................6

2. Introduction......................................................................................................................................................62.1 Principles..............................................................................................................................................62.2 Approach..............................................................................................................................................72.3 Themes................................................................................................................................................82.4 Commercial Delivery............................................................................................................................9

3. Commercial Structure, Issues & External Drivers...........................................................................................103.1 Commercial Structure 2019...............................................................................................................103.2 Plan on a page....................................................................................................................................103.3 Actions...............................................................................................................................................11

4. Toolkit.............................................................................................................................................................144.1 Links to useful Documents.................................................................................................................14



1. Executive Summary

1.1 Introduction

Welcome to the revised Commercial Strategy which includes Procurement activity and replaces the Procurement Strategy. Following my appointment in October 2018 I have had the opportunity to assess the current “state of play” and, consulting with the procurement team and stakeholders, this revised strategy will take the Commercial function forward in a sustainable manner delivering results that matter focusing on improving efficiency, contractor performance and Constabulary income. Our focus will be creating Commercial Solutions.

It is apparent that the function suffers from a small number of weaknesses causing issues with performance, a number of which have been identified in the 2016 audit and are yet to be addressed, including but not restricted to:

1. High turnover in the Head of Procurement post2. Improvements required in Procurement skills3. Lack of clarity with the Joint Procurement regulations4. Lack of forward planning5. Lack of contract management6. Lack of supplier performance management

These areas will be covered in the improvement initiatives which we will be focusing on in future years.

Cumbria Constabulary has an annual budget in the region of £95 million plus an annual spend, under contract, in the region of £23m per year across c120 contracts accounting for 80% of the Constabulary’s procurement expenditures. Getting control of this spend, and the supply chain culture, is of strategic importance to the performance of the force, the safety of its officers, and reputation of Cumbria whether this spend is concerned with supporting victims, new communication channels with the public or quick and effective support for operation responses these contracts must enable and support the vision of keeping Cumbria safe. It is my ambition is to bring about change resulting in Cumbria Constabulary Commercial being recognised as a centre of excellence and training ground for succession planning.

Commercial capability includes a wide range of skills notably procurement, finance and legal. For this reason we will work collaboratively with colleagues ensuring best in class practices are applied. There is increasing recognition of the need for Forces to collaborate and we will play a key part in the effectiveness of delivering the right equipment and services in an ever challenging environment. Our improvement journey to realise our vision will introduce the concept of intelligent client and build on the opportunities that collaboration (with forces, suppliers and others) can bring.

We have sufficient evidence to show that we have an opportunity to modernise and improve our operating framework including systems, processes, standards and policies which will result in a modern, sustainable procurement lifecycle and it is this modernisation that underpins the ongoing strategy and plans.

It is clear, also, that more is being asked of all of us in the force and Commercial is no exception. We have to change. We will be equipped to manage change both now and into the future by introducing a comprehensive training people plan to support the Commercial team.

This plan will be ambitious and a stretch on our increased resource, and, if we achieve all our aims and objectives, we will have transformed the way we operate resulting in a positive impact on everyone in Commercial, our customers and the force overall.

The strategy comprises three elements:



1. Vision2. Key themes to deliver the vision3. Action plans for each theme

With the themes being:

1. Delivering Strategy2. Leadership and Organisation3. Acting with Professionalism – People and Capability4. Delivering Quality Processes and Systems - including5. Managing Performance

Along with oversight from the Chief Officer Group.

As we work through the strategy we will encounter changes in the environment that require us to adapt. In the immediate term, Brexit is the biggest concern requiring us to ensure critical areas such as continuity of supply, management of fluctuations in price and changes in regulations. Our strategy will be sufficiently flexible to deal with these issues by using the tools at our disposal to fully understand our suppliers, markets and requirements.

This plan is ambitious, demanding and expectant of working at our highest skill level. When achieved it will be rewarding and deliver professional pride for us all. It is a journey taking control of Commercial, utilising our talents and experience, growing our skills and delivering strategic benefits to the force. In short, we are taking Procurement from a partial rated function to a Commercial centre of excellence – I hope you will find it is an exciting place to be.

Barry Leighton

Head of Commercial Solutions



1.2 Vision and Keeping Cumbria Safe

Our updated vision for Commercial is,

“To deliver an Outstanding Commercial and Procurement Service Enabling Safe Policing”.

This 2019/20 refresh of the Procurement Strategy has been developed to actively support the priorities set out in the Police & Crime Commissioner’s Police and Crime Plan 2016 – 2020 and Cumbria Vision 25 while supporting the Internal Change Programme and enabling an effective policing strategy by achieving improved contractor performance, efficiency and effectiveness within challenging budgetary constraints.

This strategy links the objectives of the Constabulary with Commercial goals recognising the responsibilities Commercial have in collaborating with internal and external partners and working in a fair and transparent manner. This is a fundamental key to achieving the drive for obtaining best value for both the organisation and the supply chain.

The first Procurement Strategy was approved by Chief Officers in January 2016 and approved by the Police & Crime Commissioner in February with this 2019 refresh being adopted as a programme of improvement, following the appointment in October 2018 of a Head of Procurement, and necessity to improve procurement performance and effectiveness recognised by audit reports.

Throughout this document where reference is made to the Constabulary, the principles and actions should generally be considered as being relevant to both the Constabulary and the Office of the Police and Crime Commissioner.

2. Introduction

2.1 Principles

In order to achieve the vision it is necessary to manage the Commercial function coherently enabling us to operate to the highest professional standards, expected by our colleagues, using best practice from a range of sectors. In adopting this approach and strengthening our collaborative working we will introduce new ways of working and the efficiencies that result. A critical area to be developed is the RASCI model (Responsible, Approve, Support, Consult, Inform) to be built on the following principles



2.2 Approach

Delivering sustainable results requires improvements to our supplier relationships, contract management and capability along with seamless working across functions many of whom are facing change and operating pressures. We must be respectful of this. Rather than dictating process we will be focused on achieving outcomes required to deliver Cumbria 25 and will deliver the pipelines of activity appropriately. If expenditure is not directly delivering Cumbria 25 it will be constructively challenged and, working proactively with colleagues, if procurements are not taking place in a particular arena such as disruptive technologies (data analytics, AI, robotics) we will identify this as an opportunity.

We will adopt a flexible and positive approach to the challenges that lay before us by working as one team, working as leaders and facilitating budget holders and others to achieve desired results

Procurement does not just relate to “buying” but covers the whole process from initial identification of a need for goods or service, through selecting a supplier, receiving the goods or service, managing a contract, achieving the benefits expected and finally disposing of an asset or ending of a contract as shown on the following diagram:

Source: CIPS 2014



The Constabulary now has strict internal governance through the joint procurement regulations, endorsed by JASC, to ensure robust probity, transparency of processes and compliance are embedded in all our procurement activities.

To ensure a “joined up” process a Commercial approach has been created by forming two key oversight groups, with terms of Reference:

1) Contracts Award Board, and,2) Star Chamber Board (Corporate Support)

As delivering value for money from the Constabulary’s spending is the collective responsibility of everyone involved with Commercial these boards include Key Stakeholders that carry out purchasing on a daily basis, Financial Services for budget control and creditor management and Legal Services for advice and guidance on contracts.

Chief Officers Group (COG) and the Senior Leadership Team (SLT), have an important role in questioning Commercial decisions and ensuring sustainable benefits are achieved.

Collaboration with others is key. Although The Constabulary has a track record of working in partnership with others such as the Crown Commercial Services, Yorkshire Purchasing Organisation, other consortia, and Regional/National Police Forces it is recognised that opportunities may be present outside the usual circle.

This strategy aims to provide plans to help us strive for excellence in the procurement of goods, services and works and to articulate the Constabulary’s positive commitment to partnering, equality and sustainability through procurement.

2.3 Themes

To achieve the vision we need to implement five themes:

Delivering Strategy, including Vision and Programme Action Plan and Spend Waves Commissioning Operational Response - SoP Digital Policing Proactive Plans for: o ICT o Logistics o Fleet and Estate o Corporate Solutions SME and Sustainability

Leadership and Organisation, including Clear Policy and Regulations Partnering & collaboration. Stimulating markets & achieving

market benefits (Market capacity building)

Developing and maximising supplier relations.

Promoting stakeholder involvement Raising awareness of procurement Delivery/Sunset Management Budget Control Recruitment and Succession Plans

Managing Performance, including Segmentation Loss of Supplier, Critical, opportunity,

Single Source MIS – Dashboard Reports, Awards, Tender status,

Spend, No of Suppliers, Supplier Status, Top 10 by spend, category etc, Payment Days

Savings Targets T&C’s Home Office

Delivering Quality Processes and Systems, including Doing business electronically. Commissioning. National Guidelines Governance Contract Register Data Control Ethics Approval GDPR Implementation, Contract Review, , Risk, Audit and Assurance, Due

Diligence Maturity/RAG, Spec, Tender, Open

Book Calendar/Pipeline



Recognising the policy and financial challenges faced by Police forces and the wider public sector the Constabulary Commercial Strategy has been developed in partnership with internal/external Stakeholders and best practice based on the current status of the constabulary with regards skills, capacity, available tools and demand. The themes and action plan has been created to support three critical deliverables:

1) Reduced risk and assurance of supply2) Improved spend efficiency, and,3) Improved contractor performance.

It is recognised that Commercial has a key role to play in ensuring capital and revenue expenditure delivers maximum benefit both in terms of commercial and a sustainable service delivery.

This strategy and associated Action Plan picks up on the current actions many of which remain outstanding such as those mentioned in the audit report. That said, the capability of the Commercial team will ensure swift progress over the next year.

We will rigorously challenge all our Commercial decisions by fully understanding the need, together with effective and efficient procurement procedures. Our approach will in turn generate meaningful cashable savings and improve contract and supplier performance.

2.4 Procurement Delivery

A category management business model has been developed to enable the Constabulary to maximise the benefits from procurement collaboration for categories and sub-categories of works, goods and services. The three key categories, operating with Business Partners, are;

1. ICT2. Operational including operational response to incidents, Fleet and Estates3. Commissioning and Corporate

These key categories head up numerous sub-categories and projects led by a Business Partner within the category team also taking the lead in the important area of sustainable procurement and social value.

Each Category team will use the segmentation model in Section 6 to better understand the criticality of the supplier, goods and service and how aligned to Cumbria Constabulary the service is irrespective of spend. There are four quadrants in the model, each having specific characteristics and appropriate strategies as outlined in the model. The full working model can be found by following the link (INSERT LINK):

Critical - Suppliers are interdependant on each other. Key focus is security of supply, risk mitigation, collaboration, long term agreements, lifecycle and account management approach, technology.

Strategic - Key focus is security of supply, risk mitigation, quality & service performance with long term relationships. As there are few competitors it is capability rather than cost that is the focus.

Specialist/Business Performance - Total cost, savings, incentives for total cost reduction and responsiveness, cost drivers made visible, supply chain innovation, sub tier supplier management.

Standard/Operational - Minimal interaction, low risk items, P2P process automation, commodity products.

In order to deliver Sourcing Projects we will adapt a pragmatic approach making best use of all the resources available to the Constabulary. In particular efforts to minimise resources on low value and standard/operational exercises will be made with critical and strategic contracts closely managed. The following diagram demonstrates (at high level) the methodology to be applied.



3. Commercial Structure, Issues & External Drivers

3.1 Commercial Structure 2019

3.2 Plan on a page

The Commercial Strategy identifies a number of key strategic priorities. Each theme, as shown in the diagram in section 5, will be supported by actions and outcomes that support the Constabulary’s key priorities and aspirations with partnership and collaborative working at the heart of our approach.


Head of Procurement

Procurement Business Partner (Commisioning

and Corporate)

Procurement Officer (Corporate)

Procurement Business Partner (ICT)

Procurement Officer (ICT)

Procurement Business Partner (Operations,Fleet & Estates)

Stores Manager

Supplies Assistants

Procurement Officer (Operations, Fleet &

Estates)


3.3 Actions (Insert link to Delivery plan for details of when each action will be delivered)

3.3.1. Delivering StrategyWe will deliver: Vision meeting the needs of Cumbria Constabulary consistent with Cumbria 25 A programme of improvements that deliver the vision with monitored action plans. Analysis of spend resulting in the creation of spend waves Programmes of work that will support the agenda’s of local Small Medium Enterprise businesses,

Sustainability and Social Values Policy Collaboration principles. Maintenance of the Joint Procurement Regulations reflecting current legislation and best

Commercial practice. A clear brief for staff on revised Joint Procurement Regulations. Best Practices. Promotion of the European procurement principles which are:-.

o Proportionalityo Mutual recognitiono Transparencyo Non-discriminationo Equal treatment

Full support of the commissioning and contract management programme. Engagement with Business Stakeholders on a regular basis.

3.3.2. Leadership and OrganisationWe will deliver: Collaboration and Partnering to change the culture of the supply chain, promote innovation and

acquire all the opportunities from our suppliers recognising that contracts are simply the start of the relationship, not the end state.

Positive stakeholder management Process Improvement by reviewing Commercial processes, documents and practices to ensure

efficiency and achieve Lean Procurement Improved supplier relationships taking into account supplier segmentation focusing our efforts in

the critical areas and recognising Gold, Silver and Bronze suppliers. Speedy routes to market utilising and creating frameworks as appropriate. Supplier charters ensuring they adhere to the Forces Code of Ethics Standards that include:o Equality.o Climate Change.o Sustainability Principles – Major purchases will be reviewed against the 5 sustainability

principles to establish the relevance of the environment and sustainability to the procurement as follows:

Low Weight Few Components Good Materials Long Lifespan Cradle to cradle thinking (Closed lifecycles)

o Re-use and Recycling.o Local Suppliers (SME’s) – o National Concordat for Small Businesses.o Whole life costing.



o Community Benefits. Ethical standards that include:o Conflict of interest recordso Procurement fraud training.o Strict accordance with the Joint Procurement Regulations and current legislationo Whistle blowing policy is understood

• Clear Roles and Responsibilities – Continue to develop the model of Category Management within the Corporate Commercial Team.

• Stakeholder management maximising end user and Stakeholder feedback regarding existing and future commissioning and procurement exercises.

• The Constabulary’s Contract Register and use it to plan and prioritise future tenders. • Standard Procurement Documentation – • Contract Standing Orders ensuring the requirements of Contract Standing orders are being met and

monitored around criteria such as aggregation, OJEU advertising and whole life costing.

3.3.3. Managing PerformanceWe will deliver: Mechanisms for realising and recording savings A range of performance indicators for Commercial and carry out benchmarking. Supplier Performance Monitoring through scorecards and 360 feedback models. Detailed spend analysis enabling a comprehensive understanding of existing expenditure enabling

identification of areas of opportunity. Supply chain reviews to better understand market dynamics. Contract Management support to stakeholders. A Contract Management Guide. Meaningful Supplier key performance indicators. Quarterly report of savings achieved. A full capital/revenue spend analysis The information gained will intelligently enable us to review,

understand and maximise the benefits from those suppliers from whom we purchase, what we purchase, how we purchase and the market/commodity profile of our supplier chain for example are the suppliers local, do they depend on us for work, are they used by other local Constabulary’s are we unintentionally distorting the market place. This information will help set priorities for new Commercial exercises help us better understand the market place and will be used to guide collaboration opportunities.

Details of all contracts awarded and publish on the OPCC and constabulary website providing in accordance with the governments Local Transparency Guidance Agenda

3.3.4. Acting with Professionalism – PeopleWe will deliver: Clear Apprenticeships and training plans Proactive succession plans Senior Business Partner “regrade” to Business Partner so promoting the skills we have while

eliminating unnecessary hierarchy. Five members of staff will commence a Commercial Apprenticeship programme leading to full CIPS

membership. Institute of Collaborative Working membership. CIPS ethics exam for all Commercial team members.

3.3.5. Delivering quality processes and systemsWe will deliver:• Clear Procurement guidelines to reduce ambiguity.



• Clear Governance in all appropriate areas.• Procurement calendar/pipeline• Ordering consistency enforcing the use of Oracle for all orders.• Electronic distribution of orders and electronic communication with suppliers where possible.• A maintained oracle e-catalogue and look to integrate with suppliers catalogues. • Commercial Information on the website and internal procurement advice on the Intranet.• E-tendering by tendering all opportunities on the Constabulary’s e- tendering portal “Blue light” for

advertising opportunities in excess of a total value of £ 100K up to and including the OJEU threshold.

• E-auctions taking advantage of opportunities to participate in e-auctions • E-market Places investigating and adopting if/when there is a business case.• A review of the use of Procurement cards for low value purchases.

3.3.6. RisksThe main risks that may prevent us from achieving our objectives and getting the benefits from better procurement include:

Inaccurate data as the basis for Commercial decisions. Cashable savings are not formally recorded. Lack of support from corporate buy in and non-adoption of standard documents and processes. Lack of appropriate Commercial/commissioning skills. Failure to engage effectively with Stakeholders. Failure to understand the dynamics of Category Management. Senior Management lack of buy in and support. New procurement processes, documents and standards are unworkable and non-compliant. Procurements have an adverse effect on local suppliers. Ineffective Supplier Relationship Management



4. Toolkit

4.1 Links to useful DocumentsJoint Procurement Regulations Joint Procurement Regulations HandbookCommercial Strategy Action PlanCommercial Performance DashboardCommercial Strategy delivery plan.Governance:

Contract Award Board Terms of ReferenceDesign Authority Terms of ReferenceStar Chamber Delivery Terms of ReferenceSocial Values Policy (in Development)

Supplier Management ToolkitSupplier Segmentation ToolSupplier ScorecardCollaboration User Guide (in Development)Collaboration Schedule (in Development)Collaboration Tool (in Development)Supplier Spend ReportContact List – Supplier and Constabulary

TemplatesSupplier PlaybookSupplier Pen PictureJoint Partnership Board (in Development)Joint Partnership Board Agenda (in Development)



5. Plan on a Page



6. Segmentation Model

END OF DOCUMENT


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