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Utility Procurement 2004

Utility Procurement 2004. Utility Procurement 2004 Presenter: Albert A. Stephens, CPM Director of Supply Chain Management Los Angeles Department of Water and Power.

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Utility Procurement 2004

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  1. Utility Procurement 2004

  2. Utility Procurement 2004Presenter: Albert A. Stephens, CPMDirector of Supply Chain ManagementLos Angeles Department of Water and Power

  3. Supply Chain Management with e-Commerce Solutions Provide Savings, Access Parity, Quality Products and Services For Less

  4. 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)

  5. LADWP Quick Facts • 5 – member Board of Water and Power Commissioners • Appointed by the Mayor • Confirmed by the City Council for 5-year term

  6. LADWP Quick Facts • Workforce: 8,100 employees • Area Served: 464 square miles • Population Served: 3.8 million residents • 2025: 30% growth expected

  7. Water Service Connections: 670,000 • Water Usage: 194 billion gallons • Residential: 427,627 acre-feet (64%) • Commercial/Gov: 146,575 acre-feet (24%) • Industrial: 22,393 acre-feet (3%) • Other: 67,030 acre-feet (6%) • Pipe: 7,100 miles

  8. Electric Service Connections: 1.4 million • Total Generating Capacity: 7,000 megawatts • Los Angeles Peak Demand: 5,200 megawatts

  9. 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

  10. CUSTOMER DIVERSITY • Caucasian: 55.1% • Hispanic: 40.3% • Asian: 10.4% • African American: 7.6% • Native American: .9%

  11. Supply Chain Management and e-Procurement Goals Seems impossible? MISSION POSSIBLE

  12. 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

  13. ACCOMPLISHMENTS

  14. 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

  15. COST SAVINGS

  16. 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

  17. Cost Savings for BiddingNETTMFor Period 1/2002 – 3/2004 Savings: $12,160,355 Avg. Monthly Savings: $450,384

  18. Cost Savings Source: FSO Study, November 2002

  19. Measurable Improvements *Projected figures based on contract dollars awarded through April 2003.

  20. Diverse Business Enterprise Activity *Projected figures based on contract dollars awarded through April 2003.

  21. Diverse Business Enterprise Activity *Projected figures based on contract dollars awarded through April 2003.

  22. Diverse Business Enterprise Activity *Projected figures based on contract dollars awarded through April 2003.

  23. SUPPLY CHAINMANAGEMENT

  24. The ‘three T’s’ to optimize the supply chain processes and structures:

  25. Time • Transparency • Trust Source: Dr. Richard Wilding Cranfield School of Management, UK

  26. Conceptual Overview: DWP Supply Chain Implementation Progression PURCHASING • Paper Meetings Files, Copies Turf Claims Snail Mail, Telephone, Fax, Email Reactive Development of Services . . . . . .

  27. 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 . . . . . .

  28. 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 . . . . . .

  29. Supply Chain Management and e-Procurement Goals Seems impossible? MISSION POSSIBLE

  30. Supply Chain Management with e-Commerce Solutions • Savings – Time and Dollars • Access Parity • Quality Products and Services For Less

  31. Utility Procurement 2004Presenter: Albert A. Stephens, CPMDirector of Supply Chain ManagementLos Angeles Department of Water and Power

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