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Utility Procurement 2004
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 For Less
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 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
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Population Served: 3.8 million residents
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2025: 30% growth expected
Water Service Connections: 670,000
•
Water Usage: 194 billion gallons
•
Residential: 427,627 acre-feet (64%)
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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
•
Los Angeles Peak Demand: 5,200 megawatts
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%
•
African American:
7.6%
•
Native American:
.9%
Supply Chain Management and
e-Procurement Goals
Seems impossible?
MISSION POSSIBLE
Supply Chain Management and
e-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
ACCOMPLISHMENTS
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– Eliminated the number of outdated policies by 2/3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
• 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
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Cost Savings for BiddingNETTM
For Period 1/2002 – 3/2004
$14,000,000
$12,000,000
$10,000,000
$4,000,000
$2,000,000
Savings: $12,160,355
$8,000,000
$6,000,000
Avg. Monthly Savings: $450,384
$0
Series2
Series1
Cost Savings
Source: FSO Study, November 2002
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.
SUPPLY CHAIN
MANAGEMENT
The ‘three T’s’ to optimize the
supply chain processes and
structures:
• Time
• Transparency
• Trust
Source: Dr. Richard Wilding
Cranfield School of Management, UK
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
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
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
e-Procurement Goals
Seems impossible?
MISSION POSSIBLE
Supply Chain Management with
e-Commerce Solutions
• Savings – Time and Dollars
• Access Parity
• Quality Products and Services For Less
Utility Procurement 2004
Presenter: Albert A. Stephens, CPM
Director of Supply Chain Management
Los Angeles Department of Water and Power