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CityofLee'sSummitObservatory Case Study: City of Lee's Summit, MO

The City of Lee's Summit, MO used our services to get visibility of their spend and to help deliver savings for the city. Not only this, but to be able to identify opportunities to develop spend with the city's local businesses. We talked to Bill Ward, Purchasing Manager, about his experience to date.

"So far we’ve delivered savings in the region of $500,000 and our analysis indicates that there’s plenty more to come."

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Tell me a little bit about your agency?

The City of Lee’s Summit has a population of around 93,000 people and an annual budget of around $300 million.

My agency buys all the goods and services that we need to operate the city - from the salt needed for when it snows to the light bulbs that keep our streets well lit at night. In total we spend around $45m each year on goods and services.

Can you describe your procurement function and where and how it fits into the organization?

My team is comprised of five people that includes three procurement officers, a procurement assistant and myself. I report directly to the City Deputy Manager and it’s my team that buys everything the city needs to run smoothly.

The City’s Purchasing Division has been recognized for the first time in 2011 with the Achievement of Excellence in Procurement award from the National Purchasing Institute Inc. (NPI). Lee’s Summit is one of only three government agencies in Missouri and one of only 57 cities in the United States to receive the award.

Would you describe the procurement function's role as mainly tactical or mainly strategic?

It’s a mix of both. Tools like the Spikes Cavell Observatory are helping us to operate strategically - we now have the information we need to help us identify how and where we might improve the way we do things.

This is increasingly reflected in the way the rest of the organization sees the procurement function. It wasn’t that long ago that all that was expected of procurement was ‘three bids and a cloud of dust’. We now spend time working with each department to help them understand where their spend is and how they might spend it better.

What do you see as the top three challenges for procurement at City of Lee's Summit over the next 12 months?

The focus for us is on saving money and saving time. A lot of our systems are still paper-based so the next most important challenge is increasingly automating as much of the procurement process as we can.

You've been working with Spikes Cavell to deliver improved spend visibility. What were you hoping to achieve when you undertook the data transformation and spend analysis project?

My initial priority was to leverage the Observatory to do what I had been struggling to do myself and quickly analyze all of the City’s spend. I was particularly interested in identifying where we might be spending money with the same suppliers across different departments but not necessarily getting the terms from the vendor that reflected our level of spending.

I also wanted to be able to upload contracts, join it to the spend data and assess where we were using contracted vendors and where we weren’t but should have been. We wanted better visibility of our spend and that’s exactly what we got.

What has better spend visibility enabled you to achieve to date?

The most significant achievement to date has been the identification of opportunities to initiate bid processes in several previously overlooked categories. We’ve already started to deliver savings by rationalizing the number of vendors in a category and getting better terms from the smaller number of vendors from whom we’re now purchasing.

What are you anticipating better spend visibility will help you achieve in the future?

To help us to get more and more into the detail. The better we know how much we spend, who we spend it with and what we spend it on the easier it will be to identify ways to drive out cost and deliver savings.

It will also help us to support the making and monitoring of policy. At the moment we’re being asked to support the local economy in any way that we can. Knowing how much we spend with local businesses, and particularly small local businesses, is helping us to support policy making but also to ensure that we know how we’re doing over time. Before we implemented the Spikes Cavell Observatory that was a difficult, time consuming and expensive undertaking.

Very approximately, how much ($) has better spend visability enabled you to save to date?

So far we’ve delivered savings in the region of $500,000 and our analysis indicates that there’s plenty more to come.

Do you think you could have undertaken the data transformation and spend analysis project without external help?

In a word, no. It was proving problematic getting the procurement information we needed from our finance systems. I was spending upwards of a day a week extracting and then cleansing and categorizing data and I always felt that there had to be a better way. It turns out there was – the Spikes Cavell Observatory. It was as if I’d been given four days a month of my life back.

Not only that the Observatory did everything we needed.

The Observatory has been instrumental in helping me educate my staff on the importance of data and to get them thinking about how we can analyze it and what conclusions we can draw. Now, my staff don’t come into the office unless they know how much we’re spending and with whom!

How did you find working with Spikes Cavell?

You guys are phenomenal. If I have a question about anything, there’s always someone to answer it. Our account manager is excellent to work with and spends time teaching us how to get value from the data in the Observatory - we’re always picking up new tips and new ways to deliver savings.

You have one word to describe Spikes Cavell to a colleague or peer. What would that one word be?

Awesome!

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About City of Lee's Summit, MO

Lee’s Summit is a city in the U.S. state of Missouri, and is contained within the counties of Jackson (primarily) and Cass. As of the 2010 census found the population at 91,364 making it the sixth-largest city in the Kansas City Metropolitan Area and the sixth-largest city in Missouri. In 2006 CNN/Money and Money magazine ranked Lee’s Summit 44th on its list of the 100 Best Cities to Live in the United States. That ranking improved to 27th on the 2010 list.

http://cityofls.net/

Published: 11/4/2011

TAGS: city of lees summit, spend visibility, observatory, procurement

"So far we estimate that we’ve delivered around $120,000 and, with the initiatives that the Observatory has helped us to identify, our forecast is that we’ll multiply our initial savings by a factor of four by year end."

Mike Bevis, City of Naperville