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Stage 13: Assest management/end of life
The procurement professional should evaluate whether the need is still current. If it is and unchanged,
the procurement cycle process commences again but from a different stage as the need is already known
and understood. If the need is not required the buyer should manage the end of life by reducing stock
levels and informing the supplier
Anti-bribery procedures
-Proportionate procedures: should be in line with the ype of bribery risk and scale that is likely to be
faced
-Top level commitment: High level execs should set an example and issue statements, updates and
feedback on the procedures and expectations
-Risk assessment: Regular and documented risk assessment of the likelihood and impact of bribery
-Due diligence: Documented procedures should cover and be enforced by all of the organisation within
the supply chain
-Communication: Ongoing training and updates should be provided to keep the organisation and its
workforce aware of current developments
-Monitoring and reviewing: Methods should be implemented to review compliance with the policies
and procedures
Busisness case for whole life asset management
-Introduction
-Objective
-Approach
-Resources
-Benefits
Procurement Cycle
the cyclical process of key steps when procuring goods or services.
Steps of the Procurement Cycle
1. Understand Need and develop High level Spec.
2. Market/Commodity and options (inc make or buy assessment).
3. Develop Strategy/plan
4. Pre-procurement market test and market engagement.
5. Develop documentation, PPQ/detailed spec/combine with 1.
6. Supplier selection to participate in ITT/RFQ/negotiation.
7. Issue ITT/RFQ.
,8. Bid/Tender Evaluation and validation.
9. Contract award and implementation.
10. Warehouse logistics and receipt.
11. Contract performance review and continuous improvement.
12. SRM and SC management and development.
13. Asset management/end of life and lessons learnt.
Terms and Conditions and the Developing of Contracts
are a very important element of developing contracts, helping to minimise contractual risks and
exposure when doing business.
Supplier Evaluation
the process of evaluating and approving existing and potential suppliers by quantitative assessment
against specific business criteria.
Sourcing
a critical activity that commands increasing attention as managing supply chains becomes more complex
(Trautmann et al., 2009). It is used at both tactical and strategic levels and is concerned with what needs
to be purchased (product/service), in what quantities, for what purpose and where.
Whole life cycle costing
takes into account the total cost of a product or service over its lifetime, from concept through to
disposal including purchase, hire or lease, maintenance, operation, utilities, training and disposal. It is
important for procurement to take all these elements into consideration when making decisions and
comparing the costs of buying, renting or leasing equipment particularly. In most cases the purchase
costs are only a small proportion of the cost of operating it.
Corporate Social Responsibility (CSR)
a way of ensuring that the business monitors its compliance with the law and industry standards. It
embraces the company's obligations and creates a positive impact through its activities and in some
cases relates to a company going beyond its obligations in terms of its effect on the environment and
impact on social welfare.
Diversity and Inclusion
Businesses not only have a responsibility to respect and value all forms of difference including race and
ethnicity, culture and belief, gender and sexuality, age and social status and ability. There is also a huge
business advantage to be had: diverse teams are more innovative, but also people want to be part of
them and stay part of them.
Modern Slavery
possession or control of a person deprived of their rights with the intention of exploiting them
Sustainable and Ethical Procurement
,consider the impact of environmental, economic and social factors along with price and quality. This is
important in terms of how the buyer conducts their relationship with suppliers, including contract
negotiation especially when sourcing globally with unfamiliar work cultures.
Supplier Diversity
A proactive business program which encourages the use of minority-owned, women owned, veteran
owned, LGBT-owned [1], service disabled veteran owned, historically underutilized business, and Small
Business Administration (SBA)-defined small business concerns as suppliers.
Social Value
a way of thinking about how scarce resources are allocated and used. It involves looking beyond the
price of each individual contract and looking at what the collective benefit to a community is, when a
public body chooses to award a contract.
implied terms
always present in a contract and are set by the law of the land.
Express terms
are written into the contract. They usually relate to items that can be negotiated and agreed between
the parties involved. Examples include payment terms, the specification, delivery details, quantities, and
indemnity clauses, etc.
Model Form Contracts
are a templated contract comprising of standardised and non-negotiated terms and conditions. Can be
used to reduce the time required to negotiate specific terms for each agreement.
Conditions
are fundamentally at the heart of the contract. If they arebreached, they give the injured party the full
range of remedies,including the right to terminate.
Warranties
are minor terms. If there is a breach, the injured party still have the right to claim compensation but
might not be able to take any other form of redress.
Liquidated Damages
are fixed amounts of money agreed between the parties that becomes payable upon a breach of
contract. They are enforceable by law.
Unliquidated damages
are an unspecified amount of money. And are used when the amount of money that will compensate the
aggrieved party is unable to be predetermined.
Exclusion clause
, are used in contracts in order to try and totally exclude the amount of liability which would otherwise
arise from some breach of contract.
Indemnity Clause
are designed to secure an undertaking from the other party that it will accept liability and risk for any
loss arising from events in carrying out the contract, and will make good the loss to the injured party or
parties.
Weighted Scorecard
This is a tool that provides a systematic and fair process for selecting suppliers based on predetermined
criteria.
Whole life asset management
relates to fixed assets. It is the process of evaluating the total price and all other costs associated with
the item so an informed decision can be made about which option will provide the best value for money
for the organization.
Fixed Assets
assets that are relatively permanent, such as land, buildings, and equipment
1st stage of whole-life cycle asset management
identify the need, objectives and risk. For example, objectives could include being more energy efficient,
reducing cost or keeping up with the competition.
Current Assets
Assets that companies expect to convert to cash or use up within one year or the operating cycle,
whichever is longer.
2nd stage of whole-life cycle asset management
procurement. The procurement team should consider all the elements within the whole-life asset
management cycle in their process to be sure that the best value is gained.
3rd stage of whole-life cycle asset management
construction. Much of the cost of the asset is derived from this stage. A readily available or mass-
produced asset has lower design and manufacturing costs than bespoke items.
4th stage of whole-life cycle asset management
commissioning. This means bringing the asset into working condition. Costs incurred at this stage include
installation, training, insurance, testing, operational efficiencies and performance and quality.
5th stage of whole-life cycle asset management
deterioration and maintenance. Assets that last longer without deterioration represent better value.
Depreciation gives an indication of how quickly an asset loses value over time. Maintenance costs
Stage 13: Assest management/end of life
The procurement professional should evaluate whether the need is still current. If it is and unchanged,
the procurement cycle process commences again but from a different stage as the need is already known
and understood. If the need is not required the buyer should manage the end of life by reducing stock
levels and informing the supplier
Anti-bribery procedures
-Proportionate procedures: should be in line with the ype of bribery risk and scale that is likely to be
faced
-Top level commitment: High level execs should set an example and issue statements, updates and
feedback on the procedures and expectations
-Risk assessment: Regular and documented risk assessment of the likelihood and impact of bribery
-Due diligence: Documented procedures should cover and be enforced by all of the organisation within
the supply chain
-Communication: Ongoing training and updates should be provided to keep the organisation and its
workforce aware of current developments
-Monitoring and reviewing: Methods should be implemented to review compliance with the policies
and procedures
Busisness case for whole life asset management
-Introduction
-Objective
-Approach
-Resources
-Benefits
Procurement Cycle
the cyclical process of key steps when procuring goods or services.
Steps of the Procurement Cycle
1. Understand Need and develop High level Spec.
2. Market/Commodity and options (inc make or buy assessment).
3. Develop Strategy/plan
4. Pre-procurement market test and market engagement.
5. Develop documentation, PPQ/detailed spec/combine with 1.
6. Supplier selection to participate in ITT/RFQ/negotiation.
7. Issue ITT/RFQ.
,8. Bid/Tender Evaluation and validation.
9. Contract award and implementation.
10. Warehouse logistics and receipt.
11. Contract performance review and continuous improvement.
12. SRM and SC management and development.
13. Asset management/end of life and lessons learnt.
Terms and Conditions and the Developing of Contracts
are a very important element of developing contracts, helping to minimise contractual risks and
exposure when doing business.
Supplier Evaluation
the process of evaluating and approving existing and potential suppliers by quantitative assessment
against specific business criteria.
Sourcing
a critical activity that commands increasing attention as managing supply chains becomes more complex
(Trautmann et al., 2009). It is used at both tactical and strategic levels and is concerned with what needs
to be purchased (product/service), in what quantities, for what purpose and where.
Whole life cycle costing
takes into account the total cost of a product or service over its lifetime, from concept through to
disposal including purchase, hire or lease, maintenance, operation, utilities, training and disposal. It is
important for procurement to take all these elements into consideration when making decisions and
comparing the costs of buying, renting or leasing equipment particularly. In most cases the purchase
costs are only a small proportion of the cost of operating it.
Corporate Social Responsibility (CSR)
a way of ensuring that the business monitors its compliance with the law and industry standards. It
embraces the company's obligations and creates a positive impact through its activities and in some
cases relates to a company going beyond its obligations in terms of its effect on the environment and
impact on social welfare.
Diversity and Inclusion
Businesses not only have a responsibility to respect and value all forms of difference including race and
ethnicity, culture and belief, gender and sexuality, age and social status and ability. There is also a huge
business advantage to be had: diverse teams are more innovative, but also people want to be part of
them and stay part of them.
Modern Slavery
possession or control of a person deprived of their rights with the intention of exploiting them
Sustainable and Ethical Procurement
,consider the impact of environmental, economic and social factors along with price and quality. This is
important in terms of how the buyer conducts their relationship with suppliers, including contract
negotiation especially when sourcing globally with unfamiliar work cultures.
Supplier Diversity
A proactive business program which encourages the use of minority-owned, women owned, veteran
owned, LGBT-owned [1], service disabled veteran owned, historically underutilized business, and Small
Business Administration (SBA)-defined small business concerns as suppliers.
Social Value
a way of thinking about how scarce resources are allocated and used. It involves looking beyond the
price of each individual contract and looking at what the collective benefit to a community is, when a
public body chooses to award a contract.
implied terms
always present in a contract and are set by the law of the land.
Express terms
are written into the contract. They usually relate to items that can be negotiated and agreed between
the parties involved. Examples include payment terms, the specification, delivery details, quantities, and
indemnity clauses, etc.
Model Form Contracts
are a templated contract comprising of standardised and non-negotiated terms and conditions. Can be
used to reduce the time required to negotiate specific terms for each agreement.
Conditions
are fundamentally at the heart of the contract. If they arebreached, they give the injured party the full
range of remedies,including the right to terminate.
Warranties
are minor terms. If there is a breach, the injured party still have the right to claim compensation but
might not be able to take any other form of redress.
Liquidated Damages
are fixed amounts of money agreed between the parties that becomes payable upon a breach of
contract. They are enforceable by law.
Unliquidated damages
are an unspecified amount of money. And are used when the amount of money that will compensate the
aggrieved party is unable to be predetermined.
Exclusion clause
, are used in contracts in order to try and totally exclude the amount of liability which would otherwise
arise from some breach of contract.
Indemnity Clause
are designed to secure an undertaking from the other party that it will accept liability and risk for any
loss arising from events in carrying out the contract, and will make good the loss to the injured party or
parties.
Weighted Scorecard
This is a tool that provides a systematic and fair process for selecting suppliers based on predetermined
criteria.
Whole life asset management
relates to fixed assets. It is the process of evaluating the total price and all other costs associated with
the item so an informed decision can be made about which option will provide the best value for money
for the organization.
Fixed Assets
assets that are relatively permanent, such as land, buildings, and equipment
1st stage of whole-life cycle asset management
identify the need, objectives and risk. For example, objectives could include being more energy efficient,
reducing cost or keeping up with the competition.
Current Assets
Assets that companies expect to convert to cash or use up within one year or the operating cycle,
whichever is longer.
2nd stage of whole-life cycle asset management
procurement. The procurement team should consider all the elements within the whole-life asset
management cycle in their process to be sure that the best value is gained.
3rd stage of whole-life cycle asset management
construction. Much of the cost of the asset is derived from this stage. A readily available or mass-
produced asset has lower design and manufacturing costs than bespoke items.
4th stage of whole-life cycle asset management
commissioning. This means bringing the asset into working condition. Costs incurred at this stage include
installation, training, insurance, testing, operational efficiencies and performance and quality.
5th stage of whole-life cycle asset management
deterioration and maintenance. Assets that last longer without deterioration represent better value.
Depreciation gives an indication of how quickly an asset loses value over time. Maintenance costs
