10 June 2004

Manukau Procures Savings For Its Residents

A new way of working at Manukau City Council is paying off for residents.

Manukau City Council's Procurement Team was established in 2003 to manage spending and achieve the best value and service for Manukau's residents by actively managing cost efficiencies, monitoring contracts and reducing internal transactions.

Corporate Business Committee Chairperson Councillor Neil Morrison is pleased with the work of the procurement team. "Prior to the introduction of Council's new technology platform in July 2003, Council operated a decentralised purchasing approach with many low-level transactions. This meant that the organisation could not establish relationships with vendors to take advantage of the volume discounts they offered."

Examples of benefits achieved so far are; " improved vendor management. The new centralised management system has resulted in a reduction in the number of vendors Council deals with from 2983 in 2002/03 to 2200 in 2003/04 " improved internal processes. Staff must send a request for a new vendor to be added to the system via the procurement team. If these goods, services or works are being provided under an existing contract then the request is declined and the staff directed to use the existing vendor " a recently approved contract for the supply, maintenance and disposal of cardiac fitness equipment at leisure centres has achieved a saving of $270,955 over the three-year contract " a collaborative Electronic Funds Transfer project between Council's Finance and Financial Transaction Unit which has seen 68% of our vendors paid through EFT instead of cheque. Prior to this iniative Council was writing and posting 10,000 cheques per annum at a cost of $30 per cheque " the current review of our electronic office products catalogue will enable us to provide staff with the 'lowest cost alternative' product.

"The introduction of the Procurement Policy and the tools provided by the new technology platform has enabled the procurement team to analyse all Council's expenditure, encourage an organisation-wide understanding of what is bought, from whom and by which department and enable the residents in Manukau, New Zealand's third largest city, to benefit from this investment well into the future," said Councillor Morrison.

ENDS

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