Canadian Government Executive - Volume 23 - Issue 03

March/April 2017 // Canadian Government Executive / 7 knowledge of the organization’s busi- ness and of the multiple ways in which a specific commodity is linked to goals and business needs. Also key is access to required informa- tion: the right people getting the right information at the right time. Liaising horizontally across business lines and synthesizing information into a cohe- sive rationale upon which to formulate evidence-based decisions is critical to suc- cessful strategic commodity management. Strategic Commodity Management at the CBSA Strategic Commodity Management is an active practice at the Canada Border Services Agency (CBSA). For security rea- sons, the following example describes the process undertaken without identify- ing specifics. The Strategic Procurement andMaterial Management Division (SPMMD) took the lead on enabling the design, implementa- tion and execution of a strategy to manage one specific commodity. The result was a procurement and material management- led cross-functional team of experts able to address subjects such as: • material management considerations (from acquisition to disposal); • operational needs; • policy guidelines; • infrastructure considerations; • security and technical requirements; and • strategic procurement options to ac- quire the goods once the exact need is determined. SPMMD employees dedicated to this file became intimately familiar with the com- modity requirements and were empow- ered to make strategic decisions based on stakeholder inputs as well as CBSA’s goals and priorities. All stakeholders were able to make real, tangible contributions and enable efficiencies. No procurement ac- tion for this commodity was taken without their input. This strategic commodity man- agement marked a revolutionary change in strategic procurement and MM, allowing it to use its capacities to their full potential. Strategy SPMMD demonstrated that Procure- ment and MM groups were core services supporting entire organizations. Their overall understanding of the required sup- ply chain, business investments, financial implications, risk and opportunities, as well as strengths and weaknesses, enabled them to influence corporate outcomes. Commodity management proved to be a continual, multi-cycle planning exercise, building on lessons learned to capture and interpret true cost of ownership data. The strategy was kept evergreen with on- going dialogue between various business owners and continuous commodity man- agement renewal. This led to a “smarter” planning cycle, returning real, tangible results to Canadians. Real Life Application of Strategic Commodity Management The benefits of applying strategic com- modity management can be more easily gauged in light of an organization’s need for printers, scanners, and/or multi-func- tional devices (MFDs). An enterprise-wide view of this group of goods would include strategic planning and sourcing; consid- eration of all aspects of the life-cycle, in- cluding acquisition, usage and eventual disposal; and analysis of the commodity group’s implication in business needs and organizational goals. The first step comprises the analysis of the current state, including comparison of location of planned use (for example, downtown offices versus potentially re- mote settings); organization-wide inves- tigation of need and definition of ‘must have’ requirements (for example, separate printers and scanners, versus the all-in- one MFD option); and other dependencies (for example, required certifications, or limited number of qualified suppliers). One would consider the financial situ- ation, including present and planned investments, as well as available capital, and funds for ongoing maintenance. Ini- tial financial analysis would determine the feasibility of acquisition options and inform the decision of lease versus buy. Overall strategy direction would factor in Agile practitioners have demonstrated that procurement and material management can effectively influence business, drive full integration of the supply chain, and optimize the cost of ownership for the Crown. benefits of leasing, such as the adminis- trative ease of paying one fee per month, inclusive of toner, parts and mainte- nance, as well as forfeiting responsibility for unforeseen repairs, balanced against ownership of the asset throughout the lifecycle, sans continual lease renewal. Furthermore, one would ascertain that MFDs, whether leased or bought, are ad- vantageous, as these machines consoli- date the need for printers and scanners, and reduce overall costs. Information gathered would be gath- ered organization wide, including inven- tory and age of current assets; compliance with overall strategy regarding location and numbers of MFDs (for example, one per floor, or one per 100 employees, etc.); infrastructure requirements (i.e. appropri- ate floor space and wiring); and security specifications (certification requirements may limit which products can be procured and connected to existing networks). A plan would be created to detail how stra- tegic commodity management would be rolled out, including estimated costs and timelines, as well as provisions for support to existing printers and scanners, while the larger MFD strategy is implemented. Consideration would be given to ex- ternal influences, such as plans to create government-wide programs to address the same needs tackled in this commod- ity management exercise, but on a big- ger scale. The organization would plan in the interim, while remaining aware of the changes such external actions would bring, and aligning their strategies to fu- ture proposals. Strategic commodity management of MFDs allows the organization to consoli- date procurement needs. Administrative efficiencies are gained, which could be further amplified with centralized fund- ing, eliminating the need to process multi- ple invoices across the organization. Stra- tegic commodity management would also facilitate universal understanding of the entity’s MFD requirements, allowing for consolidated asset planning, tied soundly to investment planning. Any organization applying SCM would capture the costs of the entire process and document lessons learned, to leverage the experience and knowledge gained from the process for the next strategic commodity management exercise, thereby providing an even greater return on investment. J essica S ultan is the Executive Director, Strategic Procurement and Material Management Division, Canada Border Services Agency.