LDP bEval PRESENTATION

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A Procurement Revolution at UC Berkeley Through
Process Improvement
Ron Coley Associate Vice Chancellor Business and
Administrative Services Lila Mauro Associate
Director for Procurement Services Business
Services Eric Anglim Property Manager Business
Services NCCI Annual Meeting July 9, 2005
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A Procurement Revolution at UC Berkeley Through
Process Improvement
Berkeleys Procurement Revolution

• Berkeley Procurement Initiative
• Berkeley Equipment Tracking System
• Overstock and Surplus Den(formerly Excess,
  Surplus and Salvage)

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A Procurement Revolution at UC Berkeley Through
Process Improvement
A Service Continuum
Procurement
BETS
Overstock Surplus Den
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A Procurement Revolution at UC Berkeley Through
Process Improvement
A Service Continuum
Procurement
BETS
Overstock Surplus Den
LILA MAURO
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A Procurement Revolution at UC Berkeley Through
Process Improvement
Berkeley Procurement Initiative Background
Assessment Findings

• Strategic Sourcing
• Procurement-Related Risk
• Organization and Culture
• Procurement and Sourcing Technologies
• Processes

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A Procurement Revolution at UC Berkeley Through
Process Improvement
Berkeley Procurement Initiative

• Overhaul purchasing function
• Achieve cost savings through greater use of
  negotiated agreements
• Create revenue through vendor incentives
• Improve risk assessment of purchasing processes
• Provide better data through increased use of
  technology

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A Procurement Revolution at UC Berkeley Through
Process Improvement
Berkeley Procurement Initiative Critical
Assessment Findings

• Strategic sourcing
• Procurement-Related risk
• Organization and culture
• Procurement and sourcing technologies
• Processes
• Creating a world-class, customer-focused
  procurement organization

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A Procurement Revolution at UC Berkeley Through
Process Improvement
Strategic Sourcing
Where we are
Where were going
Where we were
Contracts
X

Savings
?
System Approach
X
Data Analysis
? ? ?
Customer Satisfaction
No Dedicated Personnel
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A Procurement Revolution at UC Berkeley Through
Process Improvement
Procurement-Related Risk
Where we are
Where were going
Where we were
X
Assessment
New Leadership
Assessment
COSO Internal Control Integrated Framework
guidelines applied only to Procurement (The
Committee of Sponsoring Organizations of the
Treadway Commission)
P-Card
X
Contract
Purchase Order
Internal Audit and Risk Management
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A Procurement Revolution at UC Berkeley Through
Process Improvement
Organization and Culture
Where we are
Where were going
Where we were
Buyer
Buyer
Buyer
Customers
Customer Satisfaction
Customer Satisfaction
Buyer
Buyer
?
Training
Best In Class Procurement
Purchasing Expertise
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A Procurement Revolution at UC Berkeley Through
Process Improvement
A Service Continuum
Procurement
BETS
Overstock Surplus Den
LILA MAURO
ERIC ANGLIM
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A Procurement Revolution at UC Berkeley Through
Process Improvement
Berkeley Equipment Tracking System (BETS)

• No silos
• Extension of purchasing effort
• UC policy compliance
• Universitys stewardship of resources

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A Procurement Revolution at UC Berkeley Through
Process Improvement
Berkeley Equipment Tracking System
(BETS) Extension of purchasing effort

• Tracks new purchases of tangible property
  (assets)
• Provides ongoing tracking and verification of
  existing assets
• Web-based system with drop-down menus
• Includes inventorial and non-inventorial assets

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A Procurement Revolution at UC Berkeley Through
Process Improvement
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A Procurement Revolution at UC Berkeley Through
Process Improvement
Berkeley Equipment Tracking System
(BETS) University policy compliance

• Biennial self-certification via BETS turn-around
  report
• Biennial on-site audit (statistical sampling) to
  confirm existence of asset, including government
  property
• Biennial random review of sampling of government
  property by the Office of Naval Research,
  including knowledge test of the Equipment
  Custodian

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A Procurement Revolution at UC Berkeley Through
Process Improvement
Berkeley Equipment Tracking System
(BETS) Universitys stewardship of its resources

• Sales
• Transfers
• Loans
• Donations
• Recycling
• Disposal (trash)
• Thefts and other losses

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A Procurement Revolution at UC Berkeley Through
Process Improvement
Tracking Process Comparison
Where we were
Where we are
Where were going
Assets tracked upon receipt by Equipment
Management or verified as received by department
(manual process)

• No change.

Allow departments to accept and track assets,
with an automatic tickler for departments and
Equipment Management.
New Assets
Ongoing tracking of assets by Equipment
Management via departmental self-certification
and physical review by EM according to best
efforts.
Ongoing tracking of assets in compliance with
policy. Equipment Management becomes extension
of funding agencies and federal government.
Ongoing tracking of assets according to policy,
via electronic property tag and proximity scanner
(via department or Equipment Management).
Existing Assets
Effective use of technology facilitates maximum
protection of University assets and optimizes
staff resources.
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A Procurement Revolution at UC Berkeley Through
Process Improvement
A Service Continuum
Procurement
BETS
Overstock Surplus Den
LILA MAURO
ERIC ANGLIM
ERIC ANGLIM
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A Procurement Revolution at UC Berkeley Through
Process Improvement
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A Procurement Revolution at UC Berkeley Through
Process Improvement
Overstock and Surplus Den Disposition of assets
at end of life via

• Sale
• Reuse
• Recycle
• Disposal (trash)

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A Procurement Revolution at UC Berkeley Through
Process Improvement
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A Procurement Revolution at UC Berkeley Through
Process Improvement
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A Procurement Revolution at UC Berkeley Through
Process Improvement
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A Procurement Revolution at UC Berkeley Through
Process Improvement
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A Procurement Revolution at UC Berkeley Through
Process Improvement
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A Procurement Revolution at UC Berkeley Through
Process Improvement
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A Procurement Revolution at UC Berkeley Through
Process Improvement
200,000
Weekly closed-bid auctions Public sale Annual
garage sale
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A Procurement Revolution at UC Berkeley Through
Process Improvement
240,000
200,000
Weekly closed-bid auction Public sale Annual
garage sale
Semi-weekly closed-bid auction Public sale Garage
sale discontinued Consignment Program
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A Procurement Revolution at UC Berkeley Through
Process Improvement
270,000
240,000
200,000
Semi-weekly closed-bid auctions Public
sale Consignment Program discontinued Electronic
sales (eBay . . .)
Weekly closed-bid auctions Public sale Annual
garage sale
Semi-weekly closed-bid auctions Public
sale Garage sale discontinued Consignment Program
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A Procurement Revolution at UC Berkeley Through
Process Improvement
308,000
270,000
240,000
200,000
Semi-weekly closed-bid auctions Public
sale Electronic sales Organized and upgraded
store environment
Semi-weekly closed-bid auctions Public
sale Consignment Program discontinued Electronic
sales (eBay . . .)
Weekly closed-bid auctions Public sale Annual
garage sale
Semi-weekly closed-bid auctions Public
sale Garage sale discontinued Consignment Program
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A Procurement Revolution at UC Berkeley Through
Process Improvement
1,000,000
308,000
270,000
240,000
200,000

• Aggressive marketing campaign
• Increase inventory
• Develop customer base
• Grow revenue

Semi-weekly closed-bid auctions Public
sale Electronic sales Organized and upgraded
store environment
Semi-weekly closed-bid auctions Public
sale Consignment Program discontinued Electronic
sales (eBay . . .)
Weekly closed-bid auctions Public sale Annual
garage sale
Semi-weekly closed-bid auctions Public
sale Garage sale discontinued Consignment Program
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A Procurement Revolution at UC Berkeley Through
Process Improvement
Revenue from Disposals and Recycles
Where we were
Where we are
Where were going
Expense only (20,000 to 30,000 annually).
Everything not sold, donated, or recycled was
thrown in trash.
Maximize revenue-generating opportunities through
vendor competition for excess University
assets.
Refuse
Earn 0.60 per net ton for recycled mixed metals
(projected revenue 5,000).
Monitors
Monitors not sold but disposed of at cost of
0.25 per pound (20,000 per year).
Monitors and other electronic waste now sold for
75 per pallet (projected revenue 18,000).
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A Procurement Revolution at UC Berkeley Through
Process Improvement
Keys to Successful Process Improvement

• Integration of services
• Collaboration among strategic business units
• Shared staff accountability for success

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A Procurement Revolution at UC Berkeley Through
Process Improvement
Questions and Contacts
Lila Mauro Associate Director for Procurement
Services Business Services lmauro_at_berkeley.edu 510
/642-1943 Eric Anglim Property Manager Business
Services eanglim_at_berkeley.edu 510/643-5244