Report on procurement key performance Indicators - Essex Police

Meeting: Performance Committee
Date: 17 January 2011
PROCUREMENT SERVICES
<strong>Report</strong> of the Chief Constable
Contact: Candace Bloomfield-Howe
1.0 Purpose of <strong>Report</strong>
EPA/01/11
AGENDA ITEM 4
The purpose of this report is to set out the targets and Key Performance Indicators
(KPIs) for Procurement Services for Kent Police and Essex Police.
Performance against the targets and KPIs will be reported quarterly to the
Performance Committees of both Police Authorities.
Many of the targets and KPIs have not been measured previously; therefore,
2010/2011 will be the base year.
2.0 Recommendation
That members approve the proposed targets and key performance indicators for the
collaborative Procurement Services Department.
Chief Constable
Jim Barker-McCardle
Essex Police
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3.0 Background
Kent Police and Essex Police have separate targets and performance indicators for
Procurement Services; however, to improve the performance and consistency of
standards it is proposed that there should be one combined set. Those set out
below have been approved by the joint Essex and Kent Police Collaboration
Programme Board chaired by both Deputy Chief Constables. This followed
consultation with nominated Police Authority members.
4.0 Proposed Targets and Key Performance Indicators
The proposed targets and key performance indicators are as follows:
Target 1
Achieve cashable savings in each year.
2010/11 £ 500,000
2011/12 £1,500,000
2012/13 £1,500,000
Note these savings will reflect Procurement activity, but may appear as part of
savings in the accounts of other budget holders. The Directors of Finance and
Administration will ensure that the savings are not double-counted and are clearly
cross-referenced.
The targets for 2012 and 2013 are deliberately set as stretch targets. This may
mean that cash savings will take priority over customer choice in future
procurements.
Savings may occur as the result of national or regional procurement (which will still
require input from Procurement Services) and will be counted in the savings targets.
The savings are forecast for two years ahead, as the renewal date of all contracts
are still being developed, particularly in IT and the reviews of non-pay savings
potential in both forces may accelerate the number of contract reviews in the short
term. The contracts database is being improved all the time and therefore the
forecast period will extend.
The Procurement activity will include demand and specification management as
well as price reduction in accordance with national definitions.
If price reductions are achieved but the business owner consumes a greater
volume, Procurement Services will record the price saving achieved.
Target 2
Ensure that 50% of all contracts tendered (by volume) in the year 2010/11 and 80%
in the year 2012/13 and beyond are collaborative. A ‘collaborative contract’ will
include those between:
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a) Kent Police and Essex Police;
b) Any other police forces, including national framework agreements;
c) Office of Government Commerce (OCG), local authorities and other frameworks.
Key Performance Indicators
Program Delivery
KPI 1 Amount of spend committed through Procurement contracts as a
fraction of total non-pay budget for 2011 will exceed 70% in value.
Rationale This indicator assesses the level of non-contract spend across the
organisation and so provides an indication of the level of influence and
control exerted by procurement professionals.
Definitions An efficient organisation that buys specific goods or services regularly
should establish pre-agreements so that terms are clear, risks are mitigated
and a degree of leverage will be applied.
Kent Police and Essex Police will seek to achieve and maintain a high
proportion of contract spend to non-pay budget.
Calculation % Contract spend
Data
source
Non-pay budget
Contracts Database and Financial Records
Service Management
KPI 2 To achieve a reduction in the volume of unplanned work to 55% in
2011/12 and 45% in 2012/13 and 30% in 2013/14.
Rationale This indicator measures the effectiveness of the contract calendar.
Definitions The contract calendar is an effective planning tool the use of which reduces
the impact of unscheduled activity on the Procurement Services workforce.
Calculation
% Number of contracts not shown on the current year’s work schedule
Data
source
Total number of contracts negotiated during that year
Procurement Services Work Plan
KPI 3 To reduce the number of active suppliers in 2011 onwards by 10% per
annum.
Rationale This indicator allows the number of active suppliers to be measured. By
reducing the number of suppliers, it reduces the processing costs for both
organisations.
Definitions Number of suppliers is the number of active suppliers shown on the financial
systems
Calculation Percentage = Number of suppliers in current year
Data
source
Number of suppliers in base year
Financial Records
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KPI 4 To increase the average order value by 10% pa commencing 2011
Rationale This indicator provides an overall measure of the average order value to
increase productivity and reduce costs of invoice processing. This will be
achieved by the Business Centre amalgamating requisition orders and by
Procurement restricting the Suppliers available to use.
Definitions Average order value is the average of each purchase order
Calculation Average £ = Number of orders x value
Data
source
Number of orders
Financial Records
Quality of Service Provision
KPI 5 The percentage of staff satisfied with the Procurement service they
received.
Rationale The indicator measures the quality of the Procurement service and whether
the customer felt they received good advice, were assisted with the process
and achieved a satisfactory outcome.
Definitions The customer will score aspects of the Procurement service and indicate
whether they were satisfied, very satisfied or unhappy with the experience.
Calculation % = Number of satisfied customers in current year
Data
source
Number of Procurement contracts in the current year
Questionnaire given to the customer at the end of each procurement
process.
KPI 6 To measure and increase the number of full and part qualified staff into
the team to ensure that at least 50% staff hold suitable qualifications
Rationale This indicator provides an overall measure of the quality of procurement
staff in the department. A good skill base means effective contracts and a
reduction in legal challenges.
Definitions Qualified staff means those staff who have achieved MCIPS and part
qualified are those who have achieved some level of qualification and are
continuing to study towards achievement of MCIPS,
Calculation % Number of fully qualified and part qualified staff
Data
source
Employee Records
Number of Procurement Staff
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