«Commodity»

1. PLEASE NOTE: This document has been included as an example. The format & contents of your final commodity strategy may vary as per the internal governance, processes and procedures within your organisation. «Commodity» Version 0.0 Proposed Commodity Strategy «Date» Reference: PCD54-A Released: 21/04/2015

2. Version control

3. Contents Key Contacts: «Name» «Title» Tel: Email: __________________ «Name» «Title» Tel: Email: __________________ «Name» «Title» Tel: Email:

4. Foreword • Purpose • This document describes the commodity strategy for procuring «Commodity» . • The information within this document will be shared and developed with key stakeholders. It contains certain sensitive commercial information and should not be shared beyond this environment. In particular this document should not be shared with suppliers as it discussed several sourcing strategy options and makes recommendations for implementation. • Approval • Approval of this document will come through the established governance route. • Notes • The data contained in this document is based on data provided from several sources. These include: • «i.e. data extracted from the Scottish Procurement Information Hub (formally known as Spikes Cavell Observatory) »; • «i.e. market information provided by «source»»; and • «i.e. product and spend data provided by several of the major incumbent «commodity» providers» • The document takes into account information gathered during «timeframe», including that obtained from participants in the cross-sector User Intelligence Group held during this time.

5. Executive Summary • Key Findings • Total spend is over £«value»: • «i.e. breakdown of spend by organisation» • Products purchased make up «No.» key sub-categories: • «i.e. breakdown of spend by sub-categories»; • More than x-number of suppliers are currently used to provide these products: • «i.e. breakdown by supplier»; • Benchmarking and Opportunities, Options Considered • Scope and Dependencies • «i.e. Department (s), Organisation (s) or sector( s) interested in proposed outcomes; • Options XXXXXXXXXXXXXXXXXXXXXXX; • «i.e. xxxxxxxxxxxxxxxx; • Recommendations and Key Actions • After comprehensive consultation with stakeholders: • «i.e. To go to market on a national, cross-sector basis breakdown by supplier»; • -«i.e. Award new contract/s by «date», with a phased implementation effective from «date»; • Benefits, Justification and projected savings • «i.e. cashable/non-cashable savings»; • «i.e. return on investment»; • Key Risks and Resource Implications • «i.e. Insufficient access to accurate and current spend data and current contract data»; • «i.e. Insufficient stakeholder engagement and demonstrable commitment to required resource». The initial insights, options considered and recommended outcomes are based on careful consideration of the total addressable spend, cashable and non-cashable benefits.

6. Project Timeline per initiative An estimated project plan for the implementation of each feasible option should be included. E x a m p l e Source: Spikes Cavell Key: In process Planned Not agreed Estimated contract awards: May 08.

7. UIG Membership Capture details of UIG members. Add Commodity Name here

8. High Impact on success Med Low Unaware Awareness Understanding Support and Buy-in Commitment and Action Advocacy and Ownership Stakeholder Engagement It is essential that key stakeholders, across the organisation and/or Public Sector, are consulted in the refinement and validation of a number of aspects of this commodity sourcing strategy. • Early engagement of key stakeholders will help to ensure the following benefits: • The closer alignment of strategy and specification with requirements of users; • The identification of leading practices already implemented at local level; • The ability to demonstrate increased buy-in to strategy, enhancing leverage in the supply market; and • The improved take up of contracts once awarded. • A number of stakeholder workshops are planned for «time frame» : • Focus on procurement managers within end user organisations • Sector based approach, reflecting different operating environments and status of current arrangements • Other stakeholders (see below) to be targeted later in the year, this will include developing: • a standard information pack for users; and • a standard information pack/messages for suppliers Tender & Contract Award Level of Engagement

9. Current Status of Commodity/Contracts Provide details of commodities covered by the strategy. 1 - Commodity Definition

10. Current Status of Commodity/Contracts Provide details of existing contracts. 2 – Current Contracts

11. Current Status of Commodity/Contracts It is essential that key stakeholders, across the organisation and/or Public Sector, are consulted in the refinement and validation of a number of aspects of this commodity sourcing strategy. 3 – Relevant Policies/ Processes

12. Current Situation

13. Spend Analysis Create your Spend Analysis and add it here. This is an example of one format

14. Sustainability The Sustainability Test will help identify and prioritise the sustainable aspects and impacts of your requirement and procurement . Consideration and actions identified during strategy development should be reviewed and monitored throughout the life of the contract or framework agreement.

15. Commodity Profile Summarise key findings. Product Profile «product profile details including any relevant graphs/tables » Commodity Tree Examples of Templates available – See Slide Notes for details of templates and guidance Commodity Characteristics Template

16. Market Summary Template Summarise key findings.

17. Supply Market Analysis ECONOMIC Strengths Weaknesses POLITICAL • Text • Text • Text • Text • Text • Text SOCIAL-DEMOGRAPHIC PEST LEE Analysis ETHICAL TECHNOLOGICAL Opportunities Threats • Text • Text • Text • Text • Text • Text ENVIRONMENTAL LEGAL Use the Market Summary Template to populate the following: Market definition «definition» Market size «size» Structure «structure» Current supply «supply» Challenges «challenges» Competition «competition» Include any relevant graphs/tables i.e. Public sector spend £ by supplier size (%), Total Scottish market (£) by supplier size «year» (%), total employment in Scotland by supplier size «year» (%), and a synopsis of the SME market analysis” SWOT Analysis The format of this slide is an example only. You may choose to present different analysis tools depending on your requirement.

18. Supply Market Analysis • Organisation spend as percentage of supplier turnover in Scotland • The table below shows the annual turnover in Scotland for the top 10 suppliers in the UK and the Public Sector spend with them. • The total Scottish Public Sector spend on «Commodity» is greater than any one of the suppliers’ current turnover in Scotland. Summarise findings and conclusions e.g. 80% of the market is with 20% of the suppliers.

19. Supplier Profile Analysis X Supplier is the global leader in the provision of Y solutions Organization and History Strategy and Key Market Segments Products, Service Range and Operations Key Financials and Other Developments Insert commodity specific Supplier Data. Use 1 slide for each of the top 5 suppliers. You should base the top 5 on whether you think the market is global, European, or UK only

20. Supplier Cost Drivers

21. Total Cost of Ownership: Considerations • Acquisition • Ownership • Operation • Disposal

22. Risk Analysis Provide details of risks identified and assessed. Mitigation strategies should be developed where possible/appropriate • Risk Identification & Assessment • The following risks/issues have been identified. • The following mitigation strategies have been developed & deployed • xxxxxxxxx • xxxxxxxxx • xxxxxxxxx

23. Best Value/Opportunity Analysis Highlight your priorities e.g. which proposals will deliver the most significant gains.

24. Best Value Analysis (Cont’d.)

25. Proposed Strategy

26. Strategic Objectives • Objectives • Implementation of this category strategy is intended to address «No.» key objectives: • «i.e. To leverage the £«00»+ million, spent annually, to realise improvements in the value for money obtained in the sourcing of «Commodity» including reductions in product prices, enhancements to product quality and improvements in service levels, where appropriate»; • «i.e. To increase the take up of leading processes and practices across the sector, including increases in the efficiency of key transactional processes including order, delivery and payment»; • «i.e. To release valuable ‘local’ and sector procurement resources to enable them to allow them address other areas of spend, increasing the range and depth of third-party expenditure influenced by procurement across the public sector»; and • «i.e. To reduce the negative environmental and social impact of the use of «Commodity». • In striving to achieve these objectives, the strategy will also seek to consider its impact on: • «i.e. Incumbent and potential SME suppliers»; • «i.e. The long term competition in the provision of «Commodity» to the public sector in Scotland»; • «i.e. The need for continuity of service provision between current and proposed contracts»; and • «i.e. The need for choice and flexibility to be retained in order to address certain, specific needs of individual end user organisations». • Each of the options considered have been tested against its impact on these objectives and considerations. The strategy, and the key options considered, have been tested against the aims of the strategy and a number of other important considerations. Whilst the proposed approach represents the preferred option for realising these aims a number of options were given careful consideration.

27. Principal Options Appraisal The Authority is committed to managing, monitoring and developing supplier performance and understanding whether our contracts are delivering and meeting the needs of our customers.

28. Principal Options Appraisal The Authority is committed to managing, monitoring and developing supplier performance and understanding whether our contracts are delivering and meeting the needs of our customers.

29. Proposed Initiatives The proposed approach is based on «xxxx». • Key Principles • The proposed approach to the supply market includes: • «i.e. A single, national and cross-sector sourcing exercise to commence in «Month/year»»; • «i.e. Contract(s) to be awarded by «Date» with a phased implementation and first orders being placed from «Date»; • «i.e. Contract(s) to cover an initial term of «Years» years with options to extend by a further «Year/s» year/s»; and • «i.e. Public sector organisations will be expected to confirm their commitment to using the/these contract(s) during «Month/year» (regardless of their anticipated migration date)». • More detail on the specific requirements to be addressed with this/these contracts is provided in the Proposed Statement of Requirements document (which is available separate to this strategy document). • Key Advantages • «xxxx»; • «xxxx»; • «xxxx»; • «xxxx». • It is anticipated to deliver savings of up to £«0.0» million per annum for the public sector in Scotland • Potential Issues and Risks • «i.e. Participation by regional SME suppliers may be limited»; • «i.e. Strategy and sourcing process will need to be carefully explained to stakeholders and suppliers».

30. Appendices

31. Supplier Selection Criteria Potential suppliers will be evaluated against a broad range of criteria. The criteria listed here are to be reviewed further and provide only an indication of the range of attributes to be considered during the supplier selection process.

32. Supplier Award Criteria Potential suppliers will be evaluated against a broad range of criteria. The criteria listed here are to be reviewed further and provide only an indication of the range of attributes to be considered during the supplier selection process. Source: Spikes Cavell

33. Communication Plan In addition to the work carried out by the UIG outline how the category strategy and final outcomes will be communicated to individual organisations - << i.e. road shows>> - << workshops>> - << website>> - <<XXXXX>> Do CoEs or individual organisations need to provide information or commitment and at what stage of the strategy development or implementation? - << i.e. intention to participate – before we go out to tender>> - << sign an Agency Agreement – before the Framework is established>> - << sign a Participation Agreement – after the Framework is established and prior to the first order being placed>> - <<XXXXX>> Timescales for critical activities - << outline key dates>> - <<XXXXX>> - <<XXXXX>> Comments….

34. Implementation Plan Comments…. • Key steps and requirements • <<Outline requirements>> • <<XXXXXXXXXXXX>> • <<XXXXXXXXXXXX>> • Content Management requirements • <<XXXXXXXXXXXX>> • <<XXXXXXXXXXXX>> • Resources and structure • <<outline>> • <<XXXXXXXXXXXX>> • <<XXXXXXXXXXXX>> • Timescales • <<outline>> • <<XXXXXXXXXXXX>> • <<XXXXXXXXXXXX>> • Evaluation and Control • <<outline>> • <<XXXXXXXXXXXX>> • <<XXXXXXXXXXXX>>

35. Contract and Supplier Management The Authority is committed to managing, monitoring and developing supplier performance and understanding whether our contracts are delivering and meeting the needs of our customers. • Overview • Strategic Objectives • This approach to Contract & Supplier Management has been developed to; • Drive continual improvement and benefits from existing and future contractual relationships • Ensure that all parties to contracts were meeting their obligations • Measure performance against KPI’s & SLA’s • Measure behaviours such as communication, responsiveness and innovation • Provide end users with an opportunity to provide feedback on supplier & contract performance • Be consistently applied across all categories • Scope • The term ‘contract & supplier management’ can be broken down into the following key component parts: • Contract Implementation and Management • Supplier Management and Development • Operational Management • Contract Administration • Supply Chain Innovation & Development

36. Contract and Supplier Management The Authority is committed to managing, monitoring and developing supplier performance and understanding whether our contracts are delivering and meeting the needs of our customers. Approach A balanced scorecard approach has been developed to manage, monitor and develop supplier performance. The scorecard has 4 core indicators and suggested sub-criteria as follows: At this stage buyers should be aware of the requirement to consider CSM. Further development is required at the ITT stage when Management Information needs will be defined and when KPIs will be identified. The scorecard will be finalised at the contract award stage.