Introduction to Procurement | Michael Young | Skillshare

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Lessons in This Class

9 Lessons (2h 3m)
    • 1. Intro to Proc Intro

      1:08
    • 2. Intro to Proc Module 1

      28:03
    • 3. Intro to Proc Module 2

      23:26
    • 4. Intro to Proc Module 3

      8:20
    • 5. Intro to Proc Module 4

      16:14
    • 6. Intro to Proc Module 5

      13:37
    • 7. Intro to Proc Module 6

      17:43
    • 8. Intro to Proc Module 7

      11:33
    • 9. Intro to Proc Module 8

      2:54
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About This Class

New to procurement? Get to grips with procurement including key objectives of procurement, the elements of procurement planning, going out to market with an RFQ , quote release and evaluation. Join this online short course today.

Why join the course?

Spending on goods and services comes with huge expectations, especially when you’re spending shareholders or tax payers money. You need to operate transparently – all while navigating a web of procurement legislation, policies and procedures. This online short course will help you get to grips with procurement essentials, specifically focusing on the legislation, regulation and policies. Learn the mandatory requirements plus helpful tips to make the whole procurement process easy to understand and less stressful.

Who is the course for?

This online introductory level course is designed for those new to procurement or for those who have procurement as part of their job either in a private or government organisation.

Meet Your Teacher

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Michael Young

Procurement and Contract Management faci

Teacher

Michael Young is a leading advisor with over 20 years experience working with federal, state and local government in procurement, contract management and related fields. He has published over 60 papers, articles, book chapters and written and edited five books. He is a sought after speaker and presenter, having delivered keynote presentations in over 20 countries. Michael has been actively involved in the development of standards in Australia and internationally, where he is currently working with ISO. He is a member of CIPS and a Chartered Procurement and Supply Professional and holds numerous qualifications including a Bachelor of Science, Graduate Diploma of Portfolio Management and a Masters of Business Administration.

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Transcripts

1. Intro to Proc Intro: introduction to procurement. Welcome to the course on procurement. What we're gonna be doing in these courses providing on introduction and overview off procurement on purchasing. We're going to work through a number of models. First, they're going to start in Marjah warm with an introduction. Multitude. We're going to look at ethical procurement and looking at why it's important to operate with a high level of ethical standards, particularly in a za bar in the market. Model three. We got to look at why procurement planning is important in some of the key aspects off planning. All the procurement of purchasing we're going to be undertaking model for is we look at the request for quote development, and this is where we develop the documentation we put out to the market out to potential supplies, too. Uptight quotes. Uh, Model five is where we actually look at the process off releasing that to the market to obtain quotes. Model six is where we actually received the quotes back, and we undertake the evaluation to I don't want to him to modulate. We wrap up with a summary 2. Intro to Proc Module 1: well, the one introduction. Now it's important before we start to understand the context in which were actually operating when we're undertaking procurement or purchasing. And it's important, understand that the world in which we're working doesn't matter whether it's public sector or private sector. The world in which working is is changing, and we're seeing a a number of different expectations put upon us particularly externally as I procurement or purchasing officer. So it's important, understand that we're actually spending shareholders money. And so, as part of the process, we need to keep in mind that we need to be accountable to the overall bottom line. Now the shareholders themselves. If it's I publicly listed company, obviously is going to be public shareholders, and I will bathe at It's a private company, in which case the shareholders might be investors. Or in fact, the owner, uh or my will be that the shareholders are effect taxpayers, all the government, and so we're spending other people's money, and so it's important that we ensure that women spending that money we're doing so in a manner that is fair and transparent on we need to be accountable for what we do because ultimately they're going to be asking questions if we don't do what we should be doing. We're also seeing as I mentioned before, there's a greater expectation that procurement. And so what we're finding is that the organizations, particularly when we're seeing downturns in the economy when we're seeing shrinking my markets and in particular wising shrinking margins through greater competition and so on. What we're seeing now is that procurement teams are being asked to deliver more for less, and we're seeing an expectation that procurement can squeeze, Ah, a couple of percent adult better deals or get better terms and conditions or ultimately reduced the actual operating costs of the organization. And so as I procurement or purchasing professional we're being asked to do to do that and actually deliver greater value to the organization. We're also saying is an increasing competition and we're seeing that in many markets, not only are we seeing more supplies coming into the market on and said it is, therefore there's more competition. There's more choice for buyers. But we're also seeing that there's lot off technology driven disruption going on as well, and so was saying new business models, New operating models and through the access to the Internet and use of a range of technologies. But finding that some of those existing business models from those new competitors are really changing the landscape, and so as an example, Lift and the other ride sharing top services have a had a significant impact, for example, on the taxi industry was starting to see those same types of things occur across a range of different types of industries. And so we're seeing ah, lot of more competition. The net result for us is that in any organization, as a procurement professional with an increasing competition once again was saying, Ah, pressure downward pressure on margins and we're being asked to actually deliver greater value for the organization. With the advent of globalization, was seeing a lot more purchasing from a number of sources around the world were able to actually tap into lower cost economies. And through the use of outsourcing and in particular offshoring, we can often get better value for money at comes through a purchasing. Often what we're finding to is that manufacturing on and certain other services are now being performed in places like China, the Philippines, on someone, and we've seen that there's Bean Business Process Outsourcing Center set up in some of these countries, and I specialize in delivering our services to international businesses. So there are many benefits of that. Of course, we can obviously reduce our costs or approval margin in doing so, but it also comes with some implications and trade offs. What we find in some countries is that they don't have necessarily the skills and expertise . We also may find that they also don't have the legislation for particular off of individuals or the environment. And so we can find that sometimes to reduce their costs. That's great. But the trade off we're making is that we may actually expose this supply chain or exposure business to reputational risks in relation to environmental degradation or perhaps, um, human rights violations. And a little bit lighter will talk about some of the issues around modern slavery. The other thing, too, was seeing is a lot more scrutiny not only by shareholders and the public, but also by stuff. And we're finding that with staff in particular with the Millennials and Gen Z generations , they find more interested in working for organizations that have an appropriate purpose, and they're inclined to call out some potential issues that my exist in A for we've also seen publicly there's Bean a number of significant issues over the last few years that have led to a distrust of large firms and a degradation in trust off certain organizations. And as a result, what we're what we're saying is that the public in certain activist groups are being much more vigilant, and what they're really calling for is a higher level of transparency and accountability for everything we do. What we're finding, of course, is that with the advent of social media and also the with everyone carrying a mobile finding the camera, any issues that may occur in their supply chain could very quickly become public information. So on shape with millions of people around the world is really important that we take some of these things into account. Now when it comes to procurement, there's a number of key outcomes were trying to achieve. Ultimately, what we're trying to do is increase that value for the organization. Now this might come through, you know, purchasing, getting better deal that could result in perhaps, um reduce costs. Or maybe the improves the terms that were actually purchasing under so might reduce the risk through certain contractual terms of conditions or what may well be just a better relationship. Larger volumes, a certainty of supply or a range of other affect is that might be relevant for the specifics of our business. We also tried to engage with the best supplies, and I guess the thing is that everyone's trying to engage with the best supplies everyone wants the best supplies to work with. But we need to make sure that we understand the context, understand your specific requirements, and we also get really crystal clear as to what type of organization what tops the supplies we need to do business with. As a preference, we find that quite often as the level of service increases would also will find that we may need to pay a higher price and so we need to balance what our requirements are with what we're able to. We're prepared to pay the supply for their services, and so it is very much a balancing act between those things. Often what we find is that the cheapest price is not always the best deal what? We may find these, depending on what it is that we're trying to purchase on where they might fit within their supply chain. Often we might find that three ability to deliver rapidly on demand or perhaps provide a quality of service. Or they have access to at technique technicians or support staff in the range of locations . Some of these other factors couldn't quite often be more relevant or more important to us on then the actual price we pay. Ideally, what we want to do is develop productive relationships. Ultimately, what the supplies are looking forward to work with us, and they're looking for sort of longer high levels of a certainty are longer contracts, high levels of certainty. Eso what they can do is actually employ staff and build a relationship with us is a buyer. Likewise, We like to develop those relationships with their supplies and so we can get certainly continuity of service. We can ensure that we don't have any delivery failures or issues on. Most importantly, when were actually receiving the goods of service they offer are waking incorporate those into whatever product or service that we're having to offer in turn to our clients as well . And so we want to make sure that we can work collaboratively to ensure the best outcome for air clients on and ast part of that. Of course, what we're trying to do is make sure that I says the supplies client is happy and we're working with them Teoh to optimize that relationship. We're also looking to streamline business processes, and what we can find is that if there's a lot of manual or or other human interaction required throughout the ordering or supply chain process, we can often find that that can take a huge amount of time. And if it and if this humans involved often we can result in in some sort of issue, a failure. What we're seeing a lot more off over the last few years is fully integrated supply chain systems, and we've seen our links with financial systems between suppliers and buyers and based upon certain triggers in, for example, out particular side manufacturing processes for manufacturing business that can automatically trigger the purchase off raw materials or other inputs into our process. And so we're seeing fully integrated systems that help do that ultimately what we're trying to do is make sure that we minimize the time and if it required and weaken, streamline the process is that makes it easy for us, is a bar, but also makes it easier for the supplies to understand what out demand requirements likely to be, and so they can make sure that they can deliver their services, raw materials, whatever it is that we're purchasing just in time. So we don't need to store things, and we can actually use those services or materials. Aziz. We need them. Onda We don't need to Then obviously stockpile, Um and I have storage facilities and so on. So we're trying to optimize that business process. We also need to keep in mind that the market is constantly changing, and so we need to monitor and respond to those changes, just as as an example. What we've found over the last couple of years is we've had fluctuations in, for example, the construction off minds and mining talk, uh, sites. And so what we see is the availability of certain people with certain skills trade. He's etcetera, thieve availability will fluctuate. And so when things are going gangbusters in the mining sector, for example. What we find is that because there's, Ah, a lot of people end up moving into those particular jobs. Then there's list available elsewhere. And of course, that means that we're playing a much fire price. Then we would otherwise likewise once that construction finished those people that moved back into other roles, other other industries, other sectors that went back to construction, then went back to engineering etcetera. And we found that there were more people available, so the price went down as well. And so what get off and find is depending on when we're buying on what we're buying. If we're trying to buy at a very, very beautiful, busy period of time, then we can find that just purely on supply and demand. The cost can actually go up, and we're paying a lot more on. And if we're locking in longer term contracts for 35 or seven years, and if we're buying at the top of the market, then of course we're not necessarily going to, um, get the best pricing. Whereas if we're buying at the bottom the market, we find that we may get better pricing over the longer term. But the downside beer is that as the mind starts to increase, you may find that supplies have problems retaining star for. You may in fact, find that the contracts that we have in place, my actually send them broke all they become insolvent. And so we need to understand what's happening in their market and understand to an extent was happening in the supplies market so we can ensure that we get continuity of supply and minimize that risk. We may also be called on to provide top class expertise and often what we're finding, particularly if we having sort of project based procurements. One offs here and there are different parts of the organization running requests for quite a request for tenders. We might be called on to bring that expertise to the table and assist other people in the organization to actually develop this petrification, develop their evaluation or assessment criteria on, then assist in the actual perhaps the evaluation, off responses or even through the actual negotiation process. And so we may be asked to provide that expertise in the process. We also have a role in terms of compliance and What we're trying to do is part of their procurement X expertise and roll used to make sure that people understand what their procurement purchasing policy is. They follow the procedures that we have in place. But importantly, it's also critical that we putting place and we continue to support and promote the right kind of culture. I've seen in many organizations that, you know, some organizations procurement have seen as an assistant and very helpful. But in a lot of organizations are also saying that procurement on purchasing a seen as the road block because of the the attitude on the culture of the exists procurement saying is the as the organizational, the part of the business that actually stops everything from happening because of all the hoops we have to jump through. And so once again, we need to create and set the rights tone and create the right kind of culture. What we want to have happen is people understand why we have these policies and procedures and we need Teoh also educate on help them through that process. And so if we don't develop that report across the business, we can find that on the culture doesn't develop the right way. Ultimately, what we're really trying to do here is we're trying to achieve, five writes. What we're really trying to do is engage the right supplier at the right price to deliver the right quality, the right quantities at the right time. And so these five rights is really what we're trying to do with each individual contract. We're trying to find the right deal, the right supplier, to deliver what's best for that particular circumstance, and we find that in each circumstance there might be some elements or aspects of their requirements or specification that are somewhat different or unique on. We may find that in a different set of circumstances, it might require different kind of supply or a different kind of price to get the outcome that really after now, when we move into the contract once of actually undertake their procurement, we move into the contract phase and there's number key things were after at that point as well. Now, whilst a contract management's covered in a different course is important to understand what contract objectives are because once we actually start the procurement process, we often shape and create a draft contract and as a result, we can if we get things right now, that it makes life easier contract management phase. But if we have some heroes or issues or problems along the way during procurement, then we can look ourselves into a contract that doesn't give us the outcome or after. Now we may find that there's a few different things we're trying to achieve through a contract on my will be that we're trying Teoh improve profitability. So in these instances, obviously margin and the purchase cost is probably going to be relevant may well be that cash flows more important. And so in these instances, and they will be are the terms off payment that way? Ah, agreeing And I will obey that we might have a 60 or 90 product development, re Spanish mint. Even business ethics might be different drivers, and as a result of these things, we find that that can shape the type of contract that we have, or maybe certain specifications or requirements that we put in place. We may saw also be focusing on things like cost reductions, which of course can help her profitability. We might be looking at payment terms Azzam mentioned, which can help a cash flow on time delivery, might be a key focus. Of course, that helps us achieve your customer service gold supplier. Innovation might be something is important to us, and so that helps us achieve their product developments. Focus on Product development Goal We might have a particular strong legal position on that might be able to achieve a risk management outcome or if their focus in a contract is one of business ethics. Then we may focus that contracts around ethical training you may require in 1/3 party accreditation or endorsement. We may be looking for a particular clauses around corporate social responsibility on and other ethical training requirements. And so once again, these particular objectives can help us obviously focus. The Y A contract is drafted, but it also my shape the y a procurements undertaken. There's a mission before, with the Globe onset of globalization, we're finding that when when they are starting to purchase a lot mawr from many different countries and many different locations, and in this just sort of example here we're talking about a re tile of that selling clothing of some type and we can say he that in the supply chain we have the apparel distribution centers on that deals with all of the shooting and stalking and so on. And then on the left inside we can say the waving factory, and we can see he were sourcing the world materials on. Then we're actually manufacturing the garments themselves. And so hanging all of this together or pulling all this together is a network or system that helps to manage the ordering A to retail end, making sure that we have the rights, colors, product types, sizes, etcetera in the distribution center. And that then obviously draws upon the actual factories to ensure that we have the volumes that we need in the right place in the right time. And so often. What we find is that in this example, we can see that depending on where we fit in toe into the supply chain, we're going to have upstream customers. We're also going to have down desperate customers. Israel's upstream supplies, and so depending on where we feel in their supply chain, will depend on what a particular purchasing focus or procurement fake a smart bait now in different kinds of sectors, different kinds of businesses. That's not a retail sales type of arrangement, will see a slightly different supply channels well, But I think the key thing here is for us to understand where we fit in the supply chain. We need to understand what the dance stream re tile of customers of wanting from us on. And then we need to look upstream to see what our supplies are doing and how we bought Be able to actually, um, work out or put in place better contracts, better relationships with their supplies to help achieve our customers downstream objectives and requirements. When we talk about procurement, what we're talking about is a process off buying, and we tend to go through a number of common stages. And here is a fairly, I guess, generic diagram off what that looks like now. It's important to understand that quite often we talk about procurement and contracting or procurement and contract management. What we're talking about use two different actual faces. Some people talk about procurement that's the entire into in process. Quite often, it's because it's a procurement team that manages this type of work, but when we actually dig into it. What we generally finds the most references and most sources, most texts and and someone I tend to talk about procurement as the purchasing phase and contract management as the, um, subsequent post contract administration management face. And so we've got procurement, and we're gonna run through it if they step shortly on. And that's usually the point happened to which you get the contract that sort signed. And then once a contract is signed, you then move into a contract management top face. They're the procurement devices. The first fights. We usually stop with these procurement planning, and generally these planning is really starting 1st 1st principles we were really trying to identify. Well, what is it that we're trying to retrieve? What's their objectives? Is there a business case or reason that we're doing this? What approach we're going to take? Do we actually understand what the market is capable of supplying? Do we have a clear picture of one of these that we're trying to purchase the goods, the services or or what if it happens to be a what approach are we going to take? Do we have to go out to a public tender or is around the one supply are off. This type off, proactive the market and therefore there's not need despite what the policy requires us to do. If we went out to when I have been tended, we were down to get one response because his only went supply. So, in other words, what was their procurement strategy? We also need to understand, Do we have a plan for dealing with property? And we talk about probably a bit later in this course. What's the budget? What's the anticipated cost on someone so forth? So these are the sorts of things that we need to think about ahead of time before we go anywhere near the market on. If we don't get this right, we don't get the Skype of a procurement right and so on. Then there's no point proceeding any further because we're going to create a whole pile of issues down the track. The next. It is where we develop our request for tender or requests for quite documentation, and generally what we're doing is we're putting out Ah, A document to the market could be to the open market for an open tender, a public tender or could be through a particular set of providers that could be on a panel or some sort of preferred supplier top arrangement or because of the values line. We may actually just go out to the general market and get a number of quite generally, what we have the guys at is some type of conditions of tender conditions were quite eso. It describes the conditions under which the actual request prices is being undertaken. There's usually a draft contract. We obviously have a specification or a statement of work, which described one of these that we want all well, what do you want? The supply to provide a do. There's usually then a syriza temples and forms that we want the respondents to respond with. And they may also be some form of evaluation criteria or something Aziz will now, depending on the the organization, on the particular value of the procurement. You may also need to establish an evaluation panel and put together in a very Western plan before you get a marker. Once that request to sit out to the market, we then have a Siris of questions that are likely to come in. We have questions coming from potential supplies they're saying now are tell your are cute and they might have some questions in relation to that. So we need to manage those are questions and respond with answers. Let's use it done through some form of addendum. We may be doing some form of industry briefing or perhaps a site walk through or something like that. And then we also need to manage the process off tender. Quite large mints that could be via on online system could be through a website or could be through a tender box of our Emma. Once we receive the documentation from the supplies, we then have the actual evaluation process and was, there's usually a number of steps that we tend to go through. Usually there's some form of compliance. Check initially to make sure that the quotes are correct. Complaint made the minimum conditions and so on and so forth. We may I go through a short listing process whereby we knock out any or set aside any that are not complied, or that may be mandatory criteria that supplies don't make. We then go through a technical evaluation, which is where we evaluate the responses in relation till those evaluation criteria and intensity, usually around the technical aspect off the response for a large procurement. We may also get through a separate financial evaluation around financial viability. Look at risk, but usually we do a technical evaluation on, then secondary. After that, we do some form off financial evaluation, and that's where we look pricing when we bring those two elements together. What we were able to do is I'm gonna fall, which supplies value for money. We may get referee reports were made your site visits and other additional things as part of that. But that all is as per the evaluation criteria as detailed in the conditions of general conditions of quiet in that second step. Now, once we have completed the evaluation in may, well be that we have a clear we don't we have a preferred supplier, but it may well be that we actually have a number of supplies that we wish to negotiate with the X Step use negotiation. So, in essence, what we're doing is where taking into the negotiations process one or more supplies, and we're not necessarily trying to get a cheaper price or whatever. But we may be trying to get an overall better deal. And so generally what we're trying to do is negotiate around certain terms of conditions. And most often, what were actually negotiating is where the supply had some departure from the actual contract. And so in their response, they may have identified that they partially comply or can't comply with a particular condition of contract. And this is usually this negotiation state is usually where we would attempt to resolve those types of issues Now through that process, what we're doing is we may do with due diligence process, but generally what we're trying to do is come up with a final a great outcome, at which point the supply would put forward a best and final offer. And usually that's the offer that goes forward that we would then accept if we're happy to entering the contract. So what have now just Danny's? That line, in essence, the five fairly generic steps in the procurement process. What you'll find is that in each organization, or it in each state is a slightly different approach. But by and large, they all tender fall out of the same five step process 3. Intro to Proc Module 2: module. Two ethical procurement Now, at first glance, we might think, Well, why do we need to understand ethics and whether we need to be if they call them what we do ? And you know, in many ways it's probably good question to us. But what we're seeing a lot more I've is an expectation that society and organisations have of us. Many organizations on certainly many industries and professions operate under codes of practice and codes of ethics, and under such codes, being organizational or professional or industry, there's an expectation that we operate with the highest of ethical standards. Now, for some organizations that don't have those kinds of codes of conduct, it doesn't mean that we can ignore them or do what if we like what we're seeing a lot more off His expectations of society, particularly around issues of trust on by the way that we do we trust and ensuring that way operate transparently, is to operate with ethics, be aware of the conflicts of interest on someone, and we're gonna talk about some of those things a bit more in this module. It's important to understand that we operate in the market as a buyer and a reputation as a buyer is particularly important if we develop a poor reputation. What we often find is that when we put a request for tender or requests for quite aftermarket, we may find that we actually get little or no response or may find that we're forced to pay much higher prices. Because if we are known as the organization that Mrs people around or is difficult to deal with, then supplies will respond appropriately. The later not responded all to a requests, or what they'll do is they'll actually load up the pricing to take into account that were difficult to deal with. And so the reputation we have is a by our eyes particularly important. And so core off that reputation comes back to Theis Fix in the way that we all Paride now, before we get into things in more detail. If it's important to understand a number of terms and definitions, often what we find is people's values, ethics and principles are interlinked, but we often find that the terms are used interchangeably or or often confused, and so just some definitions, firstly, values. So the values of those things that we hold to be good for ourselves or for everyone else. And so we might are as an individual value, friendship or family. And so that's something that we see is important on may well be that we expect everybody else to to share that. That value was, well, ethical values. Generally, those sayings that we believe to be at the ethical values that we, uh I guess a spouse or would like to see is that everyone operates honestly or everyone operates with integrity. And so we have an expectation that regardless of whether everyone likes it or not, everyone should be honest. As an example, we also have underlying principles and principles are usually rules of for action that is supposed to guide our everyday behavior there, the way we put our ethical values into action and so an example he might be, you know, we might have a principle that honesty is the best policy or trade others as you would have them treat you. And so these are just examples of principles that we might apply. Often we see within codes of conduct and courage of ethics way often have principle based Kurds now, and so we'll see certain principles outlined in these codes or certain principles outlined in their policies. And that will be, for example, that we have to operate with the highest level of evict ethics or transparency or or so OK , so it's important to understand that principles are the actions that guide or the rules of God, erection and the ethical values are those things that we see need to be applied, irrespective of whether we like it or not. So when we translate that into a procurement context, we often will see that, as I said, we have codes of practice. But we may also have supply codes of conduct of supply codes of practice. And so we're expecting supplies to sign up and operate with those specific ethical values of principles and apply them in our dealings on their dealings with us as part off our lied to supply check. And when it comes to some specifics around ethical procurement, there's a number of expected behaviors that we want to see, and we're also wanting to make sure that they clearly articulated and particularly supplies , ensuring that they're enforced. And so what we often find is that we want to see values that we operate transparently way need to be accountable for what we do. We want to make sure that there's no unfavorable treatment or bias and what we do, etcetera, etcetera, and so often the organization's code of conduct. Will that line what it is that we're expected to do? And the supplies code of conduct will outline what we expect supplies to do now those they're involved in procurement. What we wanting to see is those involved have the skills and knowledgeable and have sufficient experience to manage the tops of procurement so involved with the office of You'll have to start somewhere and often we may find that we're working on smaller components of a larger procurement. Or we might be dealing with lower dahlia dollar value costs, um, procurement, small, quiet, etcetera on. That's right. But over time, as we deal with larger, more complex procurements, we expect to develop the skills and experience in doing so. What we also wanted Teoh ensures that there's appropriate checks and balances in place, the very stages, the procurement process. What we're trying to make sure is that we don't have any one individual from a government perspective, being able to hijack the process, are or right off and do things that sits outside of the policy or outside of the Viet delegation. And so we need to make sure we have appropriate checks and balances. We might have particular sign offs required a different points. We might have a particular review process required before contracts signed or a manager undertake some sort of check on what gets done. And so I would expect to see those things along the way as well. It's important that we also understand what a conflict of interest is, and we also put in place any strategies to identify manage any potential or perceived issues. I'm gonna talk about conflicts of interest in just a moment. It's important that we also communicates supply with supplies in a way that's consistent, and we're not providing any advantage or disadvantage to anyone. What we often find is that this is an area that supplies get particular aggravated about because if, for example, you know we operated unethically and we got quite from on supply, we after the mop, and then we went to a mate who works for another business and says all your got the work. If you can do it better than this on share, the first supplies are pricing in their response to wear. Quite. We often find that, you know, that might work as a one off. But we find over time we actually developed a very poor reputation. The market is a buyer and we'll fire that over time. It may not necessarily get the cause of responses or the card of supplies responding to us that we really want to work with. We also need to make sure that we're not compromised in a zone individual on some, once again, this goes back to the conflicts of interest, and we need to make sure that was saying toe operate in a way that's impartial. Whilst we all know people, we all have different experiences. We will work to different places and so on. We need to make sure that we could operate impartially and identify the best outcome for the organization, irrespective of any relationships are the other dealings we might have had as a result of these sorts of elements? It's important that we actually might turn the confidentiality as well confidentiality of supplier information on making sure that the evaluation that's undertaken to determine who the best supplier is, he's kept secure, so we can't see pricing that's being shared among supplies now, once that kind of situation occurs and that becomes, if it becomes known to the supplier market, we may find that they just don't want to deal with us anymore. And so it's important that we actually operate in a way that's ethical on and fear and making sure away with my tidying, the confidentiality where that's been on in the fort. So a key element here is one of accountability and as a procurement officer is important that we are accountable for the decisions we make. And what that means is that we need to be not only accountable for decisions, but we also need to take responsibility for the achievement procurement outcomes. We can't just sort of sit back and say, Well, that's someone else's problem. We need to be accountable for the decisions and the outcomes that created the organization . That's why were employed to do this work on. And if we're not yet working in these roles, that's what's going to be expected by organizations is that we need to do what's best for the organization and be accountable for those that comes and sometimes we don't always get it right. But that's that's part of the process. What this practically means is we need to be take responsibility for decisions on the responsibilities is identifiable. And so it's clearly saying that that's their cells or a particular individual person is responsible. We need to buy time any at any appropriate or adequate records. And so if, for example, is an issue in negotiation and it ends up, it's a legal issue. Then we may find that we need to provide that information to illegal teams because there's some sort of ongoing legal situation. So if it ends up in court, then of course is going to be looked at by the courts in that scenario. And so we need to make sure we keep the paper trial in the event that that that does get a Clio does get pay shot. We need to make sure we comply with any organisations, policies, eso. We need to understand what the organization's policies are on. We need to comply with those and we also need to make sure we put in place any processes to provide feedback to, I think, unsuccessful bidders and manage any supply complaints as I sigh way need to operate within any codes of practice and codes of conduct on. And also we need to keep in mind that we're operating in a market, a za buyer, and if we don't have a good reputation in that market, then we confined that there's issues arise down the track. And so the way that we deal with any potential complaints, supply compliance or bitter complaints is important that we do that in a professional way. Now I mentioned before conflicts of interest and conflict of interest is where now put the situation where we have to make a decision against either personal interest compared to a professional interest or our employ on. So we want to find we don't want to find ourselves in that circumstance. We want to make sure that we avoid any perceived or potential conflicts of interest. Now a conflict of interest could exist where, you know we have access to certain information through our employment, and we wanted Teoh. We won't want to make sure that let's not improperly used and so we won't have access to sensitive information. What we can't use that outside of our employment. We can't use that for personal reasons or t o buy shares or do something else like that for personal gain. We need to make sure we compartmentalizing information on and make sure that we only know that piece of information in the context of their work on a roll. And so we need to make sure we deal with it appropriately. We see issues Iran accepting bribes, gifts or in the time and in return for preferential treatment in some sectors in some industries, as's fairly common practice that you know that the tickets to the corporate box at the 40 or you know, Christmas hampers or or cases of beer all those sorts of things given Teoh for helping people out and, you know, doing favors. And that sort of stuff is just what we do is people. But I guess we need to just keep in mind. Is that going to create a perceived or potential issue for a stay on the track? If we do a favor for someone or we accept I'm sending into time with or bribe or something else like that then, then, is an expectation that's been set up with that particular person, a supplier organization. And there's gonna be an expectation that we pay them back or or they have scratched out back, and now it's our turn to scratch. There's by giving them work, and they may not be necessarily the best supplier. Or that might not be able to deliver one of these that we asked for and say we confined. That's a very SIPRI slight before you. If we accept the tickets to the footie on and then we have established in expectation the supplies going to get, get work from us, but they're not capable, then I will. You know, a situation where we forced toe do that with creating a bit of a conflict of interest for ourselves, conflicts, riding to tendering and contracting. Obviously, we've dealt with different supplies a two different times before. We may have existing working relationships, which is fantastic, but there may also be circumstances where we may have worked for that business before or or someone and so we just need to be aware off any of those conflicts and my exist at that point in time doing favors for family and friends. Now, whether it's for free or whether it's in return for money, then you know we confine ourselves in a bit of a situation a bit like the bribes in the time. And I mentioned earlier whereby you know, we do a favor, and then there's an expectation that they can call on that favor to get more work on more business or something else like that. They that may be sort of the done thing, but it may well be that they're not the best supply for what it is that we need and so you can create a bit of a challenge or conflict of interest in that circumstance. You may also find that depending upon the the organization you're working for, in depending upon what the organization's policies or codes of ethics or codes of conduct are, you may find that outside employment or in involvement with part time jobs in different organizations. My actually create a conflict because of your employment, and so certain organizations have policies around outside employment, part time jobs other than your main job, and you need to be aware of those things Likewise, memberships of certain organizations could actually create a potential or perceived conflict. And so once again, you need to understand what the organization's policies are on need to comply with those particular policies. And one of the bigger ethical issues that we're starting to see across their supply chain is this concept of modern slavery and what button slavery is is where we threw our supply chain putting in place different kinds off arrangements that effectively result in a slavery kind of arrangement. Now, often what we see is that this could take the form off indentured labor. Ah, could be that there's working in particular conditions could be that there's exploitation of individuals that's taking place on what we often see is that it's not usually they are direct contracts with suppliers, and so it's not the supplies were dealing with directly, but quite often that could be two or three levels down the supply chain on. So we find that way need to have ah, level of transparency in relation to where supply chain. Now why this is relevant to us is that we may in fact find that in this case we're in Australia. But we may find that were actually unknowingly benefiting from modern slavery. And this may be through the food we purchase, the closer by the supplies we choose and the companies and companies in which we invest. As I've mentioned earlier, one of the issues we were seeing becoming much more prominent used. These issue around trust and transparency. And we're seeing a number of issues over the last few years whereby there's Bailey, the bridges of trust with the public, or there's been issues with human rights violations in company supply chains. And this is something that's becoming more commonly sing throughout the media. And we're saying that the public's now starting to hold a companies to account for this. A number of years ago, there were issues where one of the department stores were selling $2 school uniforms, and that would be great for your customers or consumers. Um, but what? Ah, what fans was found very quickly and what was actually plastered all over social media within about 24 hours of the actual ads going out was that the clothing was made by Children in Bangladesh, and they're working in effectively, like a slave factory making clothing and these roll kids that that couldn't go to school because they were being forced to work. And the great already was that they were making $2 school shirts and shorts. Eso our kids could go to school, but by us buying them with were actually preventing kids in Bangladesh from going to school . And so that became plastered all over social media that had an immediate negative hit to the business's reputation on but also because they were publicly listed. Company had a significant impact on the share price. In fact, the share price decreased 30% pretty much within hours of that that going out and it took almost 12 months to recover. And so, yes, it's just one example. But there's been many other examples like this where there's bean human rights violations in a supply chain on Ben through social media. This has made known, and it has, ah, significant reputation impact on Doris. Also, any impact on share price. And so if we're involved with procurement and really important that we understand what's happening with modern slavery, particularly as there's been legislation introduced nationally within Australia in late 2018 and also with the new South wiles that requires certain requirements of organizations in relation to modern slavery in the mapping of the supply time. Now there's a number of key respect is that we need to consider and take into account. And what we find is that there's particular categories of goods and services that we procure that result in higher risk. And so you know, if we're buying, for example, cocoa from certain countries or were Buoying Elektronik components in certain countries, that may create higher risks because off the source of those particular items and because of the why those industries operate. We also find this certain harvest biographies. And so places like South America, Africa and parts of Asia may be considered harvest. Geography is because off the lack off legislation, another controls in relation to employment. There's also certain vulnerable populations. And so people that are even within Australia they might have Bean recently immigrated to Australia on day might be working in particular roles, and because of that they are they are vulnerable to exploitation. We also find their certain business models that result in higher risks. And so if we're operating in particular industries with certain business models will find that some of those business models may result in a higher risk for modern slavery. Now we love so you spend some time going through each of these particular elements. But this is really just to give you an awareness, solve off how modern slavery can come about and why we need to consider this is part of unethical procurement process. There is actually a further course that goes into these normal detail. Should you wish to look at that? I did not light a time. Now. The thing is that in relation to the supply, China's I mentioned modern slavery is relevant firstly, because we're saying that there's an expectation off our says organizations. We have, ah, a social licence to operate if you like. Society has an expectation that we operate ethically and above board, and that's great for us directly. But more often than not the issues and not so much with us directly as a business or an organization. But more often than not, it's actually in our supply chain. As I mentioned, we find that office awful. It often we only have visibility of what their direct supplies or doing, but it's important that we have an understanding of what their supply child looks like. And we may need to look at the the second or third to supply there. In this example, he three acquisition procurement officer. That's us. We're dealing with the prime contractor or a major supplier, and they might have a number of supplies that provide imports or, you know, raw materials or other labour to them. And so they will have second Teoh supplies. And then, of course, they will have 30 supplies as well. And so often what we find. It's the 3rd 4th of 50 years, usually the bottom rung off that supply chain letter is where many of the violations actually took place. And so even if we requiring out prime contract, where that sort of first arrow at the top ease, even we've got certain requirements around how they deal with their supplies, ethics and so on. We need to make sure that just because that's in the contract, that doesn't mean that the supplies necessarily going to want you to that. And so we may need to actually look further down the supply tone and ask them to wear the map. It well, maybe ask them to participate in some sort of supply chain transparency, your third party accreditation process to ensure that there are no violations throughout the supply chain on there. So some organizations where they want to take a particular market position or a market stance, Aziz being unethical supplier or unethical provider, that it's important that we we do with any modern slowly that may exist. We can't really call there Selves, ethical if we're allowing human rights or another violations to take place in the supply chain on not being a dealing with those ones appropriately. 4. Intro to Proc Module 3: little three procurement planning. Before we make any start on the procurement process, we need to undertake some planning. There's number key things that the planning involves. First, we need to be clear on what our objectives are and what their come are trying to achieve. What we find is that depending upon what that objective or outcome is, it can actually lead to a number of different approaches that we can take and that can help shape our procurement strategy. It's also important to understand the market, the size, the shape of the composition, the market Now there. Lots of supplies around. The few supplies are there is a very beauty, busy period of time in the market right now, and so are in a scenario where we will have to pay a lot Mawr because of that business. Then perhaps if the markets in a bit of a slump would have a low do we have a scenario where there's only a few competitors and they have a lot of market power and therefore, when it comes to negotiation, we're not gonna have much of a say in the matter, So there's some of the things we need to think about in terms of the market. We also need to look at the internal approval process. You know, we may need to prepare a business case and identify what we're trying to do and identify the costs and benefits of doing that particular thing and, of course, pulling it all together in relation to a procurement plane. Part of that, of course, is looking at the resource is required, but also thinking about the potential budget that might be needed for the actual contract. We will eventually assign what's with finished the procurement now the planning process. We tend to follow through, ah, number of steps in this example. He we're actually creating a business case, and we're using that as a basis to the terminal help, influence or shakeout procurement strategy. But as I mentioned earlier, we really need to stop with the business name. What are we trying to achieve? What's the problem we're trying to solve? What outcome is critical for us to to deliver the benefits of the of the that comes to our organization? We need to develop the business case, and if that involves developing any costume cost benefit analysis, then that's what we need to do. But of course, part of that is we need It could clear on the scope off the procurement. Think of a range of potential options on those things, then will help step three. He shape house procurement strategy. Eso procurement strategy is really understanding and looking at the market and thinking about well, based upon that, based upon the outcome were looking to achieve in their business case. How do we actually go about the procurement? Do we go through an open tender process and sent it that the entire universe on? Then see what pops up? Do we leverage often existing preferred supply arrangement or panel and go to a subset of supplies or based upon their market research? We find that there's only one supplier of this particular product in the in the world, and so we can go to them and get a single quiet on. Take it from there. So procurement strategies particularly important and step for he now we had to take the competitive procurement process on, and that's where we actually develop bids, get out to market requirements, got to market on, get responses within need to get through and look at how we award implement the actual contract in Step six. Manage the contract and, of course, in Step seven, close and review. But the key elements that we're talking about, he is really the steps one through three, because that's really the core element of planning process. Now it's important that we actually undertake planning and there are many, many benefits to come from. These are dearly. What we see is once have actually gone through the planning process and really thought about what we're trying to do. It helps us to align their procurement business goals and so we can see what the overarching strategy of the organization of businesses see, what the business goals and objectives are. And then what we can do is use procurement as a wife assisting to achieve that, we might gain some form of purchasing advantage, and so we may take advantage of emerging situations in the market. Or perhaps we might be able to structure up an arrangement which provides a longer term arrangement with the supplier, gives them certainty in in return for that gives us a bit a bit across point every time a delouse is to better managing risks. There are always risks in any procurement activity and serving, able to consider those as part of their plan on, then put in place the appropriate mitigations and treatments to minimize any potential impacts that that might have. It also helps us to be more efficient in a procurement. One thing we're seeing a lot of organizations do is more category management, and in particular, what they're looking at is the types of categories of goods and services there regularly purchase. And they're putting place particular strategies that relevant to that particular volume and also that the nature of the goods and services themselves. And so for mechanisms like that, we can actually become more efficient, on more cost effective in their procurement process. We can also look to innovations in the tendering and contract management approach, and there will be that we use procured a plate pay systems or we may have integrated yuppie ordering systems that exist between ourselves and our supplies. And so, as we order materials in throughout supply chain, it automatically activates an order in their system and and contribute a shipping just in time shipping top arrangements. So what's a game we can actually look for innovations in the actual tendering process, ALS contract management and ultimately glasses to retrieve those strategic objectives rare for our employer or a business. No mention before that. Market research is critically important, and it's an area that I often see that's really not looked at much, looked at at all or is just really undercooked. Understanding what's available in the market is critically important because as a buyer, if we don't understand who the supplies may potentially be or what the market can provide, or so on, it means that we can find ourselves being locked into a situation where we end up with a poor contract. We end up with a poor supplier or ultimately, we don't achieve the value for money for a cost effective solution. Eso lets us really sort of hiding on a couple of key areas. First thing we can identify what existing products exist, what water in the market, what's available. And you know we can look for things like what small businesses might be capable off providing services to us. We can get a real appreciation for any competitive market forces as well as any commercial practices that might be common in that particular industrial sector, and all of these things can shape either the nature of the contract we put in place. It may shape the way that we actually go about the purchasing or procurement process, or it may have an impact on the way that we actually negotiate. It's also important to understand you know what's available in the market, you know, Are the products generally good value? Are they quality? What's the general performance like, You know, how long do they last and those sorts of things, what's what's exists, exists there and what's available. If we're we're trying Teoh design and procure something that just doesn't exist at all. It's going to take much longer in the scandal, usually come with higher risk in and also hard costs that come with that. It's also important to consider what else is happening in the procurement space. We have seen many examples where, by different organizations in different countries or different parts of the country or in different states have been arable, Teoh partner up and actually achieve a better outcome for both organizations when they enter, almost like a joint venture, top model to actually purchase, you know, equipment or or services we need to think about, you know, how available the businesses or the market sources. Are there a lot of buyers? Ah, lot of sellers. Are they small businesses of the large businesses? What do they look like? How what's the shape and size and composition the market? It's also with while thinking about the tops of contracts that might be needed on and how we might be able to incorporate those contracts into the way that we undertake a procurement. 5. Intro to Proc Module 4: module four requests for quite development. At this point in the procurement places, we need to start developing our request for quote or request for tender documentation. Now, this is the documentation that we send out to potential supplies. Ah, that gives them the information that we're after and give them the opportunity to then respond with their tender submission. All that quite as part of the process we normally send out. A number of elements are a number of documents. Not only is there the specification or statement requirements, so what it is that we actually want them to do often what we'll do is send out conditions of tender or conditions, a quote which gives them information around how the tendering or quiting process would work of what conditions I need to make. We'll also send them a draft contract. At this point, it's important that we provide some level of contractor or give them at least some information about the contract being a link to a standard terms of conditions, albeit a specific contract for this particular engagement. Because when the supply comes Teoh price up the response. They need to actually understand what the terms of conditions of contract up. And so, for example, if we want them to hold particular insurance policies around, say, public liability or professional indemnity, that we didn't need to include that in our specifications and or our contract and then the supply, I can make sure that they factory any costs associated with that insurance, just as an example for large tenders, particularly for high risk or hide elevated tenders. There's usually also Whitmore that's involved. Quite often we might have a particular performance standard could be service level agreements or some other set of KP eyes that were going to measure performance. We may also have an evaluation plan that we need to prepare internally, and we also need to think about how we might be going to evaluate the actual responses once we get them. So who's gonna be involved? Evaluation criteria and so on? And so you need to set up an evaluation panel as well Now, in relation to the specification, this is one of the most critical things to get right. We find generally that our terms of conditions of contract and in terms of conditions of tender I usually put together by the legal area within our organization. But the specifications is what we have to put together on, and it really is important we get a right. So as for the different he's in here. The specifications is a document primarily fusin procurement, which clearly neck and accurately describes the essential requirements for goods, products or services. So, in other words, is what what the supplies going to provide or what we're actually asking for in their response? And so this is the basis upon which they actually cost any submission, all proposal or their response to the quite a tender. And it also becomes the basis against which we measure the supplies performance once they're actually in contract. And so it's really important that we get this right, make sure it's accurate, make sure it's in a sufficient level of detail, and it covers all the things that we want them to provide. Generally, what we're trying to do with their specifications is achieve a number of key objectives here. We want to make sure that when we develop our specification, it supports the organization's value for money objectives, and in particular it's written in a way that ensures impartiality and objectivity. is reasonably practicable. So in other words, what we're trying to do is to make sure that we write their specification in such a way that AH, number of supplies have the opportunity to bid for on now. Through that process, we encourage competition if we write the specifications. So it only fits one particular business or organizational supply. The problem that we have is the other supplies or potential suppliers will look at the speck on A and I've gotten you know what, this is actually written for company extra company. Why we're not even going to respond. And so you can substantially cut down the number responses. So much so that you may only get one response, Andi, particularly if it's the company that the company realizes that has been written for them and no one else can do it. They have no real particular reason Teoh to provide a competitive beat. And so what we want is a bit of competition to make sure that the supplies I have to actually, uh, strive for the work and have to compete and have to win. What we want to do is also encourage the use of standard products Ah, I t in particular over the years has been problematic where everyone wants to customize, develop and create sort of unique or bespoke solutions. And the problem that creates is that it's a lot more expensive, but also down the track. When we need to upgrade or or, you know, from a maintenance and support perspective, we often find that time the costs can be substantial. And so what we tend to see is that most buyers wanted to standardize the product sweets and they want toe, particularly when it's involving equipment. They want to tend t work to a particular ah configuration or a particular Michael model, or even a particular brand, so that allows easier management. It also means that we don't need a whole pile of parts in different support contracts as well, so standard products that are the way to go. We also need to think about the sustainability. And I'm not just talking here about environmental. We're talking about sustainability in the broadest possible sense. We want to make sure that we're buying equipment. If it is equipment that has some sort of useful life, we want something to be able to be supporting maintained over time rather than today. So have used wants to then throwing a white. The same thing also needs to be considered when it comes to services as well. And so, just for example, you know, if you engaging a clean contractor, they need to understand their obligations under certain environmental legislation. When it comes to use of chemicals and disposal of chemicals on someone, we also need to make sure that we eliminate any unnecessarily stringent requirements. What we see sometimes is that some organizations gold plate their specs, and in essence, what they do is they. They want the Rolls Royce when the actual mini the Mini Cooper, will do, and we often find that by gold plating specifications, you end up getting something which is not really what you need might be nice toe have, and it might be all wonderful. But it's not necessarily what you need, and it also leads to a scenario where you're paying substantially higher prices than you really need to pay. And so they're stringent. Requirements often mean that supplies need to incorporate additional people staff equipment , checks and balances governments. All those sorts of other additional elements need to be incorporated into their into their response, and they're also into their pricing. And so the Net result is you pay a lot more than you probably need to. We want to also think about proprietary products, and I guess that this goes to my comments earlier about standard products. We want to make sure that we're on the using proprietary products where that's relevant, necessary and so often we find where we have to integrate with existing equipment. Say, you know, in in engineering context or perhaps an Arctic context. Um, that always said that's relevant. But if that's the case, we went office to get approval or at least make reference to the organizational, the division or the branch or the or the department that has responsibility for these things, to make sure that there across that on and they're okay with that. Now we end up with a number of common problems that we see when it comes to a specifications. Sometimes you see that we've got inappropriate customization eso the example I gave before with the Arctic system. Once we start to customize, we find that it becomes very costly and difficult to upgrade because effectively we need to upgrade to the new version, then we need to pay somebody to re customize the next version. And so that could be problematic. More often than not, we're better off using what we're buying pretty much out of the box unless there's a very strong, compelling reason to do so. We also have issues around the level of detail. And so here we've got under specifications and over specification eso. We find that sometimes some specs Ah, fairly bright Vega in general. And the net result of that is that, of course, you end up in a scenario where the supply is not really clear on what you want. Uh, you end up with something that you don't really need or or more problematic is. You don't get what you think you're going to get, and so that the problem we have is that we need to get the level of detail right. It's sort of a bit like the Goldilocks and not too hot, not too cold. We need to make sure we get the level of detail, right. And when it comes to over specification. As I said, what we see is that the goal planning that I mentioned earlier, and quite often I find sometimes that some buyers they put a whole pile of additional nice toe halves into the actual requirements or the specification. Just because they might possibly noted at some point in the future on the reality is that in most cases never actually used. It's important to consider any performance requirements, and so often what we find is that we tend to think about, ah, you know, fairly practical, tangible things. But we don't necessarily think about performance requirements. We've that think about things like the how long the particular item needs to last. What sort of performance standard needs Teoh operate to? Likewise, when it comes to services we need to think about, you know, before engaging, Cyclone is how we're going to actually determine that they are doing their work and how we're going to make sure that I clean things to the standard we expect. We also seen instances where there's subjective terms used. We say the words good or best, and the one that often pops ups as head up is operating to best practice or or use best efforts, and the problem with that is that Well, what is that? How do you measure it? And because it's a subjective term, what might be good for you may not be necessarily good for me. What you might think is being best might not be best in my eyes. And so we end up with differences in interpretations or or gap and expectations. Sometimes you see instances where brand names used. The problem with brand names is that it means that the supply has to provide something off that particular brand, and the example often uses if you're purchasing liquid paper branded correction fluid. And that's what you ask for if someone provides in their response wide out or Tipp ex or any of the other brands while their responses non compliant or non conforming because they haven't provided liquid paper brand correction fluid. And so it's important that if you're going to use a brand, you have to sort of use terminology like, for example, the good piper or something like liquid paper or equivalent in that example. So be careful of brand names because quite often that locks you into a particular product type. Using outdated specifications could be problematic. This can occur when you've got changes of standards or change of engineering requirements on. You may also find that sometimes if there's changes of specific legislation, then that that can also resulting in after the specs. The problem that we run into is that if we're asking for something that's currently not correct, you may find that you may have to pay for a Phillies 50 variation to the contract to bring whatever you've asked for initially in line with the new specification that may may not have been referenced in your documentation. The other one we see sometimes is that we actually had contract clauses into the spit. The specifications really should be the the specifics as to what you want to buy, what good you buying or the services you're actually buying. The actual contract clauses themselves should sit in the in the actual contract now Mr before sustainability. And it's important that we consider what the impact of what we're doing has on the environment and on human health. What we're seeing over the last few years on they're becoming Maura Maura on area of focus is that, um, both sustainability from an economic, environmental and social perspective is becoming a really key focal point we're starting to see through legislation like the modern slavery legislation. We're also seeing a focus around human rights on environmental areas, and so that's becoming more and more prevalent. And so we need to think about in their specification when it comes to products, packaging or someone you know, what we gonna do with recycling? How actually going to manage the waste that might be produced? Eso This might be a by product of, ah manufacturing process or may well be that you know, you've got leftover parts and you can't recycle him in some way. How are we going to deal with the missions? The emissions, Marty Carbon emissions? There might be some other gaseous emissions. It could be just light or noise emissions, and so we need to consider what might be relevant. They habitat destruction, particularly environmental perspective. This might be relevant, not specifically in relation to the goods or services that were purchasing, but it may well be some of the raw materials that might be required or might be used in the manufacture of parts or or of those goods themselves. There might be issues around toxicity, and that could be a simple Aziz. You're engaging a cleaning contract during your dealing move chemicals in some way. And so there's a health and safety issue for the cleaners. Is a health and safety issue for the staff that might be coming into contact with the disks or whatever that might have been claimed with those chemicals. And, of course, the needs to be the safe storage in the safe disposal of those chemicals. Just as an example, issues around Seoul degradation a say similar to habitat destruction issues around water conservation. And it may well be that this is once again in the raw materials of the manufacturer, or may well be that it's to do with the actual efficiency off the actual items, your purchasing. So the equipment needs to be water efficient. Likewise, where we're seeing a lot more focus around energy efficiency and so we're looking for equipment that has low power usage, little or no standby power on and so on when it comes to facilities and buildings were also saying there's a lot more focus around green building design, so we're looking to see that buildings are not only energy and water efficient, but they also are thermally efficient. So in other words, we don't need to expend huge amounts of money on heating and cooling to make to ensure the building. He's actually operating at a stable thermal, a thermally stable point where we see that there's many different programs that exist in relation to green building. For example, Ah, lot of government buildings, just as an example, require the buildings that they might build a lease. They have to be a minimum number of stars under the neighbors scheme on the national built energy writing scheme, and so there are different schemes that exist for that. 6. Intro to Proc Module 5: module five released the market. So once you've actually develop your documentation there, Christopher quite request for tender documentation. You got your specifications in your draft contract. It's now time to actually release it to the market now, depending on what your organization's policies and procedures are, this may determine how you go about this for some organizations that use their website, and they published the documentation on the website on and that's Ah, that's where it starts. Others used different on line platforms. Two applied and communicate the tenders and quotes to the to the public. And so guys out to, ah, to individuals who have registered businesses that have registered in certain categories and ah, and some in some instances. And they will be that you picked the supplies you're gonna go to when you just send them an email with those documents attached. So depending on the nature of the actual goods and services, you procuring the complexity of what's involved cost etcetera, you may find that there is a few other steps, and so you may find that you need to do some form off industry briefing generally larger or more complex procurements that might be the industry briefing. It may well be that you need to do a bit of a site, walk through or meet potential bidders on site s so they can actually see the premises. See what's there, etcetera or my will be just a more generic sort of information session where you can sort of provide a bit of another view of what's actually required. They tend to be not used that often, but it is, ah, strategy that you could use. What we find is that the key element is to get it out to the market. And then we need to look at how we might deal with any questions that come in. Ah, and we also need to make sure it's, ah, clear the actual close date and time for the actual responses on how they're gonna be submitted. So in sort of the the old days, often the responses were hand written and there were the posted in, or they were dropped into a tender box. But what? Saying a lot more now off is submissions either via email or we we have particularly the website or or on online platforms being used. Then, quite often, the supplies or bidders will actually applied their response directly into that Web sort of platform. Now, depending on the type off approach to market using, there's a number of different methods that we could use. We have different approaches that we use depending on. What of these were trying to achieve is every outcome. Eso we may use an expression of interest. And that's where we actually put together a bit of a high level overview of what it is that we want done. And we send it out to a number of potential respondents orbiters and is to basically get them to put in the proposal or submission. And so, in essence, by them responding, they're expressing their interest. Uh, the second is a request for information. This is often what we often use this where we don't really have a great level of clarity as to what we want done. Or we might have a particular problem that we need solved. And so what we do is we send this out and each respondent orbiter will provide their solution all their way to do with it. Ast part off their of their response. I request for quite eyes quite often the most commonly used vehicle. Often we have, ah, fairly small set of documentation, and we we have our specifications. Send it out often by a mile, and we get the quote. So responses. The that quite may be nothing more than, ah, one page written quite, and there will be a price or four services. It may be a lot more involved than that. Request for proposal is slightly different. You may use this kind of arrangement where we've got a bit lucky near why, where you're actually putting it out to a number of organizations, and, in essence, you're asking them to provide a response or proposal in relation to have them watch, do a particular thing, and so it. So that's it's halfway between your request for quiet and your expression of interest. A request for tender A tender response is usually a lot Mawr complex. A lot mawr involved on tends to my only be used where there's a high risk or there's ah, there's a fairly significant dollar amount used. So for some organizations, they may not go to tender until you're talking half a $1,000,000 plus or it ends up being Ah, very complex kind of project or activity that has, ah, fairly substantial specifications and contract, in essence, the process for a request for quite requested attenders really, quite the same. We may have some organizations that establish a panel or standing offer top arrangement, and that's where they go out to market. And they set up a new arrangement with, say, five legal firms, for example, and what they then do is, they agree. The terms of conditions that may even agree with certain categories of work, and possibly even the the rights or pricing. And, um, that's so established and what it then means, particularly if it's ah, is usually used where it's commonly ah, commonly use service. So for a large organization, Legal services would be with these the example here on. So when you have a particular piece of work that needs to be done, what you do is create a work order or, um or a brief, if you like, and you send that out to one or all of those particular organizations on that panel, and they didn't come back with the details of the individual on an idea of how long it's going to take to actually do that particular piece of work that give you any indication of pricing. But the pricing is based upon the group rates, often in the actual standing offer itself, and so tends to be used as a say where it's a regularly repeated type of service, often legal services. A good one Arctic contract is one that's commonly used with that condom model as well. We may have what's called a pre qualified tender process on. This is usually a two step procurement. And so what we might do is go out with, um, perhaps Teoh organizations that they previously responded to in the air. Why? And we've done some sort of vetting or or preliminary, um, evaluation. It may also be used where it's going to supplies that made a particular licensing or other kind of situation. So even went on to go out to engineering firms that have registered engineers or Electrician's have to be a license electrician's so in sort of, in essence, pre qualified, because I have there are license, electrical business so often we see that, and in essence, that goes to those particular organizations or businesses on, and then it's just dealt with like any other kind of tender process. Some organizations and in some and certainly with government, we also have certain mandatory procurement processes. And so one that's happening more and more often across ah federal government as well as in different states, is that they are requiring, um, public servants to go to Aboriginal and in indigenous businesses or social enterprises to get quite says part of their procurement process on The idea in these instances is to actually build capability and capacity in that in that those types of businesses in that sicked up. And so that's an example of a particular policy that they need to follow, and therefore they need to follow the process that's affiliated with that. Likewise, there might be requirements to use particular panels of standing offers, or there might be certain mandatory whole of government kind of models or arrangements. And so in Victoria, for example, it might be a state purchasing contract in federal government. It might be a whole of government arrangement on, and that's mandatory to be used. So once again we see those kinds of models being used in a little places. We also have the two stage procurement, and I sort of touched on the solar before with that pre qualified process. But in essence, it's where we might go out to the market initially with that request for info here, why we sort of dance elect to a handful of potential bidders on then. We actually issue a very detailed requests for tender type of arrangement to that sort of pre qualified or dance elected set of supplies, and so they have to effectively be twice if you like. The first is sort of fairly generic high level. They make the initial cut, and then we go in with the detailed second step on. So that's often whether to SAGES is useful. Where it could be useful is where you might end up with a very large number of supplies responding and so you can sort of down select to a reasonable number in that second stage or where you are aren't really sure what you need or how the solution might be implemented and say you'll go out with that sort of request for information request proposal to start with on, and then only those that you like you coning actually go through a detailed down tender process with now the request documentation that gets sent out to the market. As we mentioned before, your conditions of tender acquired draft terms of conditions you specification. And you may also be sending out response templates, particularly for for tender documents. And the idea is that by sitting at this package to all of potential bidders, they say all of the detail that's required they have a clear picture of one of these that you are after in your specification and by looking at the tender. The draft. 10 terms of conditions of contract. Sorry they actually can then price based upon on those particular teas and seats. Response temples were a really good idea because it allows you to compare apples to apples and so you can ask particular questions or ask for particular responses. Diet I etcetera. And if you're using standard templates, that means that all of the responses that you're going to get from different bidders ah, consistent and so it makes it easier in the evaluation process there once the documentation is released. But that whether it's Senate, Vier, Emaar, whether it's put out Vira website or some sort of online platform, Uh, what will usually start the flow is a series of questions, and potential bidders are raiding the documentation and them. I find that some things just unclear. Um, I will be that there's something that's a bit ambiguous, or it may well be that there's something about the specifications contract that they're just not sure about. So what you'll start to see is, ah, steady trickle or steady flow off questions that come through now. The best way to deal with these is to create what's called an agenda. And what in the Dender is is any change to the documentation pack that you've actually sent out? In essence, that's ah, in addition to or a change to that first document set that you sent out now for fairness and transparency purposes on to make sure that you encourage that competition as best that you actually send the questions and the answers to everyone that's actually been sent the initial package to anyone who might be beating eso. If that's a tender, then it gets uploaded to a website. It was going that by a mile that I get sent to everyone. Now the idea is here that we don't this necessarily mention the name of the supply has asked the question. But a lot of questions and answers can have the ability to actually alter the specifications or alter the contract. And so it's good that everyone gets those that that why you can't be ever accused. I provided providing favorable treatment a wine or disadvantaging another. You may also find through the process that if there's a question, for example, arrange specifications, something's unclear. Vagal. Maybe you just plain and simply forgot something. Then you can actually issue an updated specifications in this example and include any of those changes. But if you do make any of these, Chinese is really important that you give any potential bidder time to be able to incorporate any changes to the speck into their response and into their pricing, and so usually lay our ah, a few days to maybe a week before the actual closed eight. Um, to make sure that you got that to everyone so they can make any adjustments that they might need to make, So it's important that everyone gets it. As I mentioned, we want to make sure that everyone is clear on what's required, and we don't have a situation where we're providing favorable trip in the one or disadvantaging another. 7. Intro to Proc Module 6: Montel six. Arabic Your evaluation. Once we have received the responses back from the potential bidders, when they are ready to move into the actual request for tender or quite evaluation, there's a couple of steps to the process, which we're gonna look at shortly. But in essence, what we need to do is look at the responses from its supplier. We need to evaluate them in a number of different ways. We need look at the pricing or financials. We also need to do ah, technical evaluation when they do compliance checks to make sure it actually makes all the requirements for that were specified. And we may also need Teoh contract. Referees decide visits, etcetera. And so, in essence, we're taking all of those particular elements into account on. Then we may get to the point where we short list down to a few supplies to negotiate with, or we may identify the fact that we've got I stand up supply from the evaluation process and we may wish just go just go straight into contract with them. There are a few particular aspects that we may need to take into account, but ultimately what we're trying to do is to get a best the best value for money outcome. It may not necessarily be the cheapest price, but we're trying to find the deal that basically gives us the best outcome. Gives it that gives us the best sort of balance, off price and in value. Now he's a fairly typical evaluation kind of process that you may wish to follow, and I just use it. Here is an example. T give you an idea of what that end when process might be. As you can see here are at the top. Once the actual process that the response time period is closed, then we need to check all the submissions to make sure that mate the specifications and requirements. Now he may. At this point I find that there are some issues or areas where we may require some clarification and within May may need to go out to individual respondents to actually clarify some of those particular aspects. If there's areas where they don't comply and they're not prepared to provide any clarification, then we might reject the actual responsive that point in time. Uh, if there are no clarifications within moved down down the stack here, and so we may have some specific manager criteria on either. Don't make that manager criteria we set aside or we cull. We may also then need to step into a short listing based upon desirable criteria, and then we're evaluating based upon those specific criteria, we moved to a price analysis and evaluate based on price associated with the actual responses. And it's a combination of these price in the actual technical score or the evaluation that gives us our value for money top off decision. Based upon that, we need to identify which is the specific response that gives us the best value for money on once again as the sights, the best combination of value in price that gives us that based upon that we were make recommendations to a manager or boss or if we have the authority to do so, we identify the preferred supplier, and then we recommend that they we enter into a contract with that particular organization . There's a mission before we may have a couple of steps to the determination off which supplies we value white. We're not going to necessarily evaluate all responses, particularly if they don't meet certain conditions of a dissipation of mandatory criteria that were set out. And so, for example, if we are looking to engage a licensed unqualified electrician's, for example, we may specify by may need to be a a license electrician's in New South Wales, for example, Aziz one of conditions before participation. If they are not, then that can participate in the process on and even if they put in the response. If in of Lost Electrician's, we can't legally use them eso there's no point of value awaiting their response, and so they might get out of sight. And so we look for any specific conditions of participation in government contracts. We often see that there's certain policy elements that people need to comply with. So, for example, or they're not listed on the terrorist watch list or they're not listed on a list that demonstrates they've been involved with human rights abuses, for example, And so you know, if if you're not this storm those particular list, then then you might satisfy the conditions of participation. We may also have mandatory criteria. The license electrician's could be one. I could be that they have to be a registered engineer or made some other technical qualification requirement be a Microsoft authorized reseller, for example, on by only those organizations. Will we actually then go to the next step in evaluate once was set aside those particular elements? The response then enters into that qualitative evaluation, and this is where we have to a very wide against the particular criterion, we've said. We'll look at some examples in just a moment now, depending on what are these that we're actually trying to achieve. We have to identify specific evaluation criteria, and this is where the criteria were used to. A very away in each and every response. And so some typical examples you might expect to see our capacity and capability to provide the specified products and services ability to make timelines, innovation or value. Add technical knowledge, qualifications or experience of relevant personnel, financial viability and insurances. Maybe they've got experience or had experienced delivering similar products or services to similar organizations, or maybe because off risk or safety, they might need to have certain safe work practices or or particular health and safety system in place. And so what we're usually looking for is a range of criteria that allows us to delineate between the supplies that are the best and the ones that we will don't want to enter into an agreement with on those that just don't quite get there. So it's only the evaluation criteria that allows us to do that. Now he these ones here obviously fairly high level, and you might be able to actually split them out into further detail. We also need to use some sort of scoring system or mechanism against each of these criteria . Now, this example here we're using scores from one through 51 doesn't meet requirements, five exceeds all requirements on and obviously can see the gradation in between. Now, in this example here, we've got a series of evaluation criteria on DSO he The 1st 1 is degree of every complies with the request for offer on, and we can see here that we've We've got four responses and we've scored each response using a schemer against each one of these criteria. As you can see, we've got a four or five criteria, and when you look at the overall scoring that's been applied to which response we can see here that often, number one achieves the overall highest score. And so in this example, often Number one would be a preferred response or responded. Ah, and we may at this point shoes to wear the enter into negotiations. Or if we're happy, where the response as it is, we might actually offer them the contract, and I look to enter into a contract with them now. I mentioned earlier that value for money is something that we're trying to achieve. What we're really trying to do is balance the price we're paying with the value or the technical capabilities off the supply. And the net result is that we're trying to get a best value for money outcome now. A couple of things to keep in minds on the first thing is that value for money is not necessarily achieved by going for the tubers price, as consumers were generally being sort of conditioned over time into buying commodity items and often in a commodity top market where everything is fairly similar or very much the same, cheapest his office and often what we go for, but particularly when we're buying services or buying complex products or goods, we find that cheapest isn't always the best often if we say supply, that's trying to lowball the price to get to get the work. Often, what we find is that part way through the delivery that lay the cut, start cutting corners, or you may find that they actually start issuing ah, heart pile of variations or claims for additional payment for additional work because off off the global price, it's also important to keep in mind that going with the supply of always used is not necessarily the best value for money. Whilst you might have a good relationship with them and you might be happy with what they do, if that's supplied, knows that they're always gonna win work. There's no incentive for them to actually get their pencil sharp and get to keep the pricing type. And there's no incentive for them to continue to to offer good customer service. And so if they know they're going to continue to win the work, then they'll just over time slack and often that may start to increase pricing and and Gary doing that process. And so you want you want to go for a competitive market and sometimes going testing the market, going to a different supply can help you do that. It's also important to make sure you don't get sucked into buying unnecessary goods or services because the price looks good quite often. What we see. Supplies were bundled together, a range of things into a particular package, and often what they find is that what you find is that some of these bundled items this sort of OK or that maybe sort of nice the haves, but not not things that you really need, but you end up paying for them anyway. And so we need to make sure we are only buying what's absolutely necessary and required otherwise. We confined ourselves, spending a lot more money and getting things we don't really want on the. It's important that we actually also have very clear specifications. Some organizations are fine, you know. They just can't clearly articulate what they need, or they're not really sure what they want. And so what they do is a creative, fairly open or vague specification. This ends up achieving one of two outcomes. Quite often what happens is that you get a vagal or generic response when you're asking for Viagra generic things probably comes as no surprise if you're not really clear what you want, Hair on a supply give you what it is that you want, so you're gonna get a fairly vagal generic response. Often. What you'll also find, too, is that you end up paying substantially more. Because if the supplies get a really clear picture of what it is that you want, they can get quite accurate with the pricing where if it's very generic, vagal broad, then they have to factor in a whole pile of risk or contingency or additional money, just in case I haven't quite got it right. Or just in case you want something that's not quite so specific. That factor in additional costs there is well, just in case. And so you end up paying a lot more. Likewise, conducting a procurement with a predetermined supply is also not a bad, not a good idea. You can find that often. If you're pre determined that the outcome is supply Rex, then what often you do is close your mind and you wind up icing the evaluation. And so the net result is that you often can end up paying mawr. We can end up getting a supply that you don't necessarily need or is not necessarily the best value in the actual evaluation process. The other thing, that's ah also eliminates very for money use just picking a supply than adding to their scope continually over time. If you're the supply that gets this goat constantly attitude once again, you gonna be happy. But you're not necessarily gained to be operating in a competitive environment. And so quite often the pencil won't be necessarily sharp. You won't necessarily get the best deal is the buyer in that kind of arrangement? So you're better off actually going to the market on a number of occasions in a competitive environment to get the best outcome. Now we're looking at what we're trying to do with very for money now have looked at the negative. Let's look at how we can actually achieve the best value for money outcome now. It's important that we actually factor in a whole pile of non cost elements into our equation. He It's important that we look at quality considerations, including fitness of purpose. What is it that the goods or services are supposed to do? Are there any technical or financial issues. That may be problematic. And so if we're asking for a significant investment by firm to do the work to tool up or whatever, is that going to have an impact on the actual level, ongoing contract? You know what sort of capability disrupt the supply? Have Do they have the skills that they have the available people? Can they ramp up rapidly? Find need to do so? I have they done similar work before? Have they work for a similar organization like ours before? What sort of capability, depth and breadth of expertise do they have? Do they have systems in place to support them? Do they have a framework? A methodology? We also need to consider sustainability. Do we have any other sustainability issues that need to be taken into account? Are there any potential risk exposures, including financial viability issues? What about maintenance service? Ongoing support? If we're buying goods or services, are is there equipment involved? Do we need to provide some sort of maintenance of support? Is that local is that interstate is an international where the spot, the parts and spares of stored, How quickly can we get things resolved if there's a bright down so those sorts of things may meet, maybe mess relevant to us. Of course, we're gonna be concerned and interested in compliance with any specifications. And, you know, we may also find that easy inspection communication delivery. So how easy is it for the supply for us to work with the supplier? Are they responsive? Are they happy, Teoh, be flexible and work with us to achieve the outcome were trying to achieve. And, you know, are there any predictable hole of life costs that need to be taken into account? What we find sometimes is that we only think about the upfront purchase. But quite often that can be the ongoing costs to support. The maintenance is where the price that the actual cost really rex up. But we also need to think about disposal at the end of life. Do we have to do something to dispose off the equipment or ship it back to Australia or or did commission? And in some way, maybe there's some some sort of waste or hazards involved with that? Or maybe it's just some costs that may need a factoring when we need to take equipment to auction, for example. Now I like to look at value for money in a graphical sense. And so what we often find is that if we draw it out like this on my nexus, we've got value. And on the other exes who have got the actual money or the cost. Now, like all of these things, we have a minimum set of requirements for a minimum specification. And so I gently won't wanting to seize responses to Arab requests, meet the minimum requirement, or that that one always and we also tend to have a particular budget. And so we have worked out what it's like to Costas per year over a period of time, and so generally won't want to see is the responses for within this sort of arrangement. We wanted to make the minimum requirements, and we wanted to actually big within that budget. So this sort of Zion he when we actually plot the responses that we get, what we'll find is that summer within their budget, and some extend their budget on, and some may not meet the minimum requirements, and some will. And so we end up with often a spread off potential responses that looks something like these. Then when we actually go through and have a look, we can see that there's some obvious ones that we can knock out. And so this one here, Number four. Whilst that exceeds out minimum requirements, when you actually look at it, it's substantially lower than the price of all of the others. And so, from a risk perspective, we might consider that this is actually high risk. And it may well be a situation where the supplies trying to buy into the contract. In other words, they've gone in really cheap, perhaps at or below cost on. And they're hoping that they can win the work by going in cheap, and then they'll make it up through ever degrading the service. Or maybe through variations. We may also find that this one gets knocked out as well, because whilst they might be offering ah, whole pile of additional things over and above a minimum requirements, it's the highest price point, only marginally. But we may find that it, in fact, may be providing the support may be providing, um, all of those bills of whistles that we really don't need, and so they got planning their response. Number 2 may also be knocked out for a similar reason. And whilst it's only slightly above their budget insult above the minimum requirements, we may find that it's also more than we really need. And so, really, what it comes down to is in this example here, Number three is their preferred response. It's the process, the process within that budget. And we may also find that in this example here meets the minimum requirements. And so it's the lowest cost, or the lowest price. Compliant bead is what achieves value for money in this example. 8. Intro to Proc Module 7: Model seven contract negotiation. So once we've finalized the evaluation off the responses and we've got to the point where we have perhaps one or maybe two or three potential supplies that we made want to enter a contract with, it gets to the point where we may need to consider some form of contract negotiation. During the actual response evaluation process we spoke about earlier, You may have identified that some potential supplies or respondent orbiters have identified what's called departures, and in essence, what they may have identified in their response is particular clauses of the contract or particular aspects of your specification that they may not fully meet all the my only partially meat. And so we need to look at these particular items because we may find that we need to negotiate, perhaps, um, cost or maybe some other elements in relation to that. We may also find that we want to discuss a number of particular aspects of the supplies response, and we didn't get to the point where we may wish to get to a best and final offer, and based upon that, we we may choose to select a particular supplier from that sort of short listed group, and so there's a number of elements here that come into play. Now. It's important to keep in mind that when we negotiate, we need to do so ethically because it's important that we understand that the negotiation process may be the actual first riel engagement when they have with a potential supplier. And if we want toe play silly games and try and screw them down and ah, and so on, then and then we sign a contract with them for, say, three years of its day of service of contract. They'll spend the next three years trying to get us back for anything we might have done in the negotiation process. And so it's important that were honest and operating ethically in this particular process. And so we want to make sure that we don't do anything that's going to affect trust. But we're also not going to do anything that sort of tries to now the supplies to the war. We're trying to operate in an appropriate way on. At the end of the day, if we if we, um you know, play silly games is gonna come back and bodice and The other thing is important is that we shouldn't be trying to try it off one supplier against the other. And I know this is sort of what we may often see in the movies or may have seen down in practice in the past. But generally what we're trying to do is we're trying to get to an impeccable in a great point with one particular supplier. And so if we go, then sharing their pricing with somebody else may, in fact, that we find ourselves in bridge off privacy or or some other particular aspect because we've been sharing commercial information when we shouldn't have. So we need to make sure that any competitors are traded fairly on when we need to be, you know, operating ethically throughout this entire process. So we we don't play silly games. We don't play silly buggers. And whilst we may find that negotiations themselves can be detail that can be involved, that could take some time. We need to operate ethically throughout the entire process, and in particular, we need to make sure we maintain confidentiality through that we confined ourselves in, Ah, very, very hot water. If we're leaking commercial information from one supplier to the next. Generally, what we find is that with any particular supplier or, in fact, any negotiation type situation, we're going tohave. Ah, what's called a bargaining range. And what this is is that if the supply are is this top bar, he and what they've done is they have, might initial offer, and that's going to be a little bit of flexibility, often in what they can do now. We're not just talking about Price, and they will be around responsive nurse and maybe around insurance requirements and maybe around a few different things. And so we may find that there's a little flexibility and what they can offer. I and often you know, they're trying Teoh not necessarily maximise that profit all the time, But the trying to find, ah, medium where or point where they're making ah reasonable profit on and they're operating in a way that means they're not going to get breaking the process. Likewise, we're going to have our initial law for our initial thought were going to be office looking for probably better pricing, cheaper pricing, lower pricing as an example on, and we're gonna have a bit of a limit us to where, how much we can actually go to because of their budget or whatever. And so we can see here that where the two are sort of offers overlap. Ah, this is where the bargaining rains release. And so what we're really trying to do is find a solution that fits so lends within the bargaining range. It could be around. Prices could be around in terms of conditions that could be around a range of different things. Now I've got a particular process that we tend to go through, like with any negotiation on is really important to get clear and you spend enough time in this preparation process. Proper prior preparation prevents poor performances that saves on. So we need to be clear on what are these? That the issues are, um, what particular goals are what we're trying to get out of this process. We want to also think about where the supplies coming from, so we need to understand what they're trying to achieve on, and where we best can understand what their goals or objectives might be. And based upon that, we need to think about what approach might be best in this circumstance. I think it's also important. Teoh. Think about what is something that we must have. What's something that we might be able to give away or concede? Ah, and you know, get clear on what point we need to actually walk away because we can't give away everything . That's just not possible in most cases. But we also often need to negotiate Teoh improve what that initial offer might be. So some sort preparations are he's definitely needed when we get into the actual negotiation process itself. Obviously we need to get started. Set the agenda in the atmosphere, and I think it's it's always good Teoh to try and start establish a bit of a report on the particular sort of get to the point where we can sort of genuine, genuinely see that we're both trying to achieve on outcome this mutually beneficial. Okay, really, what we're aiming for is a win win kind of outcome, because ultimately, if we get to a situation where one supplies the supply, for example, reluctantly agrees, or one party is just not happy, they may initially agree, but what you'll find is the relationship will say, are pretty quickly on things will start to fall apart. And so it's important that we we get that win when the outcome. Now we often start by sort of exchanging positions. And the challenge with positions, though, is that it's almost like you're putting your stick in the sand or putting. You're putting a line in the sand, a single. This is what we're going to accept and nothing else. And whilst the great I get the that, that's usually an opening gambit. Um, quite often we need to relax their positions and so on. So I think it's really important to actually understand what the underlying drivers are, what some of the underlying challenges are, because once you understand our some of those underlying aspects you can find on, you can actually understand why the supply may have certain might have to take a certain position. Likewise, I think it's also important to, um, communicate. You know, some of the reasons behind or underlying why you might have certain positions as well may well be that you you are constrained in certain areas and they will be that, you know, company policy or some other thing means you can't do do These will do that? Um And, um that's that's okay, is just something that you probably need to discuss in that negotiation process. If that's what the constraint is, it's important to also then look at how you might be all Teoh trade any priority differences. So we're looking to see where we might be able to make some concessions, were looking to see where the supply might want to make some concessions, were trying to get to the point where we're in that bargaining zone, and we can get to the point where we can I conclude the agreement. Now. There's many, many examples of different negotiation employees and techniques that they used. Some of them are good, some of them not so good. But I think it's important Teoh understand that there are, you know, certain wise that individuals will negotiate and certain techniques. L used to do that, and they may not necessarily be sort of, ah, fair and above board, but it's important that we understand that these things do go on often. What we find is if we can get agreement on whatever we can first and we lock those in, then what we can do is move into the perhaps the more contentious areas or the areas where we may not be able to get agreement. So we may find that we just made the maxim conditions in those instances or perhaps the supply makes the concessions and so on. But by agreeing whatever we can first, you often find that you can quickly get to the to the more contentious issues. Once the negotiations complete, we need to obviously document the agreement itself. We may need to also implement the agreement, so that may mean that we need to make changes to the documentation of the contract or there may be something else that we need to do. I think it's also important, like all of these activities is to do a bit of a review and so it's important to think about what worked and what didn't work, how we could improve it. Next time. I think about you know where this and any skills gaps personally, that we may need to look at on and fill before we get involved with next negotiation. There's a mission before it's important that we also understand what airplane but use. We need to consider what might happen in the event that we are able to negotiate the desired outcome. And so we need to think about their Plan B or or what we're going to do in the event the negotiation doesn't break down. Um, I will be that we just walk away and when there were soft. But it may well be that if the negotiators not able to be achieved, we then need Teoh Look it. Ah, or move to l Airplane. There are Errol turned it. And so we need to really clear on what air batteries were best alternative to a negotiated agreement. What often we find is that if you approach the negotiation and you have to win at all costs , quite often you find that the negotiation becomes very protracted on drawn out, and quite often it can be. It can be very aggressive and it doesn't work, and so eventually someone's gonna walk away. But if you tend to go into the negotiation knowing what your Plan B's on, then if you don't get what you need or what you you specifically want, well, you can walk away from the table knowing that you've got your playing very or you're back there in place 9. Intro to Proc Module 8: modulate summary in this course. We've looked at all of the aspects as an overview off procurement, purchasing and what with so that with the introduction, we looked at a bit of context and why it's important to undertake purchasing and procurement in particular. What in modern to we looked at the ethics off procurement and in particular, we looked at wise, important to operate in a fair and transparent manner. Why it's important to avoid conflicts of interest and particularly when we're operating is a bar in the market. How their reputations abaya can actually heavily influence the tops of arrangements we put in place and whether people respond to our quotes on tenders and so forth. In Model three, we looked at procurement, planning and what's really important to planet procurements, and in particular understand what the market is able to provide on and have a good understanding of the capability off potential supplies or what's potentially available from supplies in the market. Because that can shape the way that we actually undertake AP acumen activities in downstream. I could undertake out contracts. We've looked at the development of our of cues and what's particularly important, ticket out specifications clear and right, because ultimately, if we don't get expects right at this point in time, there were confined. That creates problems for its downstream in their contract. Management were spoken about how in Model five, the release off the request for quotes to the market and how we got about this and how we could make sure we can operate in the why that's fair and transparent toward potential bidders in the evaluation module model six. We have looked at the process of evaluating the responses were received, and we could look at how we can find the best value for money outcome through that evaluation process. Once again, this evaluations really important. Ultimately, if we get this wrong, we can end up with a supply that doesn't deliver what we're after or doesn't provide a good potential solution on, and therefore could create a whole pile of headaches for us in the contract. Management fights a bit lighter, wrong in total, seven will looked at negotiation process on how he may wish to negotiate a contract on and , you know, depending on what it is that we're trying to negotiate, we confined that it might be a very simple, straightforward exercise. Or it may take a lot of time and effort, depending on the neck of the contracts. And, of course, we're now in Model six, where we've undertaken a bit of a summary off what we've learned so far. So I hope you've enjoyed this particular course. Certainly, I have a look at number of our courses that we do have available. We actually have courses that cover each of these elements in a lot more detail. And eso if you do want to get more information or doing a bit more detail than have a look at some of the other courses that we have on, offer a Lavery best in your procurement and hope to see you against it.