10 Stage Fixed Procurement Process
By now, we all know how to issue fixed tenders for our customers. The market has been fully de-regulated now for over 15 years so we’ve had plenty of practice. However, fixed procurement seems to have become over-complicated. As TPIs have taken on greater and greater volumes of customers, new teams and new processes have emerged to manage this.
I propose that we look at this process again and take it back to basics, in ten easy steps:
- Upon receipt of signed Letter of Authority from the customer, issue a Request for Information (RFI) to the current supplier. Store this information in your system, ready for tendering.
- Track the market and agree with the customer on a suitable day to present and discuss pricing results.
- If dealing with an I&C portfolio, issue your tender to suppliers. For SME portfolios, instantly generate quotes through supplier pricing files (skip to stage 6 if this is the case).
- Contact all suppliers 24 hours before the tender return date to check that they will be quoting and that there are no credit issues.
- On tender deadline day, load all quotes into your system and generate a reverse auction by providing suppliers with instant pricing feedback.
- Provide your customer with access to your system to review the pricing results – live.
- Once a preferred contract has been agreed with the customer, load the signed contract into your system to the winning supplier.
- Send the counter-signed contract to the customer once the supplier has confirmed lock-in.
- Instantly issue termination notice to the supplier for the contract that has been placed.
- Issue a registration request to the winning supplier 5 working days before the contract is due to go live.
Now I am the first to accept that the above is just a process. Things go wrong during fixed procurement and need to be managed carefully when they do. We will explore some of the issues that occur during the fixed procurement process in later UtilityInsights.
Importantly: every single stage listed above can be automated through technology.
Of course, human intervention is important to keep track of customer / supplier interactions, but in the fixed procurement process lies a huge opportunity for TPIs to greatly improve and streamline their processes.
The best thing about this? It’s not rocket science, but the correct use of logic to control processes through technology and to allow staff to focus on what is most important to their business – speaking with customers.