Improvement of

a Tender Management Process

Annalisa Caponerahttp://ie.linkedin.com/pub/annalisa-caponera/31/253/8ba/

Lean

Project6σ

Statement before improvement (from the project Chart)

The tender management process is

controlled by the project management

office (PMO) and provide the 80% of

company’s procurements

The process has high standard of

quality: 0 defects, 90% of placement in

the first 4 positions and 40% of success

INTRO

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

0

1

2

3

4

5

6

7

8

9Tenders distribution

Number of tenders Team Capacity

Problem Statement (from the project Chart)

Company: IT and Services

Sponsor of the Project is the top management

Customer: PMO (Project Management Office)

Project Manager: PMO manager

Project Leader: Annalisa Caponera

Other Stakeholders: Final Clients, Tenders team, HR, Delivery Managers, QMS Team

Duration 2 years

Budget 40.000 € per year

Approved by Technical Direction

DEFINE

Problem Statement: VoC

Business Case: Cost cutting

1. Reduce use of Delivery Managers

(500€/d)

Time= 4day/tender *68 tender= 272 day

Cost= 272 day *500 €/day= 136.000 €

2. Reduce Overtime of the PMO team

(350€/day)

Time= 10 day/month *12 month= 120 day

Cost=350 €/d * 120 day=42.000 €

3. Invest part of the saving to enforce the

team (SW, HW, Resources)

4. Keep the same results in terms of

placement

VoC

PMO wants

to reduce the involvement of Delivery

Managers in Tender Management at 2

day per tender

Increase process speed

Add resources to the tender team

PMO doesn’t want:

the cost of the improvement exceeds

the budget.

the quality of the business proposal

decreases in term of:

Image (good placements)

Procurements

DEFINE

CTQ SMART GOALS

Decrease DM Work-time

Goal 1: -50% in 2 years

-25% effort first year (4 to 3d)

-33% effort second (3 to 2d)

Reduce Overtime PMO:

Goal 2: -50% in 2 years

-25% effort first year (120 to 90 day per year)

-33% effort second (90 to 60 day/year)

Increase Process speed

Goal 3: reduce the Lead Time:

-15% Lead time first year

-15% lead time the second year

Goal 1 Goal 2 Goal 3 Goal 4

Specific

Measurable

Assignable

Realistic

Time-related

DEFINE

Keep Quality Standard

Goal 4: expected results≥90% of placements in the first 4 positions

General

≥90% of placements in the first 4 positions

Technical

≥40% of success (procurements)

SIP

OC

Supplier Input Process Output Customer

Customer Tender requirements Tender publication

Top management Margin and availability

Decision and margin

PMO Team Tender SchemeWriting contribution

Strategy, Tender scheme, Request for contributionWritingControl

business proposal(technical financial)

Respect of rules

PM Information writer contribution

Writing business proposal(technical)

Respect of delivery deadline

HWSW suppliers quotation Writing business proposal Evaluation: technical score + financial score

Writers ContributionSchemes pictures

Writing business proposal

Bid manager Administrative and financial contributions

Writing closure

business proposal

DEFINE

S I OP C

VSM (present)MEASURE

Customer

ApprovalBrainsto

rmingRFI Draft

Editingparts

Merge Control Closure Delivery

IN IN IN

DM

P/T 2h

W/T ---

FTQ 100%

4

P/T 4h

W/T ---

FTQ 100%

6

P/T 2days

W/T ---

FTQ 50%

2

P/T 1d

W/T ----

FTQ 100%

1

P/T 3d

W/T 1d

FTQ 80%

2

P/T 1d

W/T 1d

FTQ 100%

2

P/T 4 h

W/T ---

FTQ 100%

2

P/T 4h

W/T ---

FTQ 100%

2

P/T 2h

W/T ---

FTQ 100%

1

68

3 days 3 days 3 days

Total P/T: 8 d

Total W/T: 2w and 1d

Total FTQ: 0.4

Lead time: 3w and 4d

2h

3 days 3 days 3 days

4h 2d 1d 3d 1d 4h 4h 2h

1 d 1 d

1

1 PMO Team

DM

1

Requests for

missed info

HW SW

suppliers

Contributions

1/2

Customer

ApprovalBrainsto

rmingRFI Draft

Editingparts

Merge Control Closure Delivery

IN IN IN

DM

P/T 2h

W/T ---

FTQ 100%

4

P/T 4h

W/T ---

FTQ 100%

6

P/T 2days

W/T ---

FTQ 50%

2

P/T 1d

W/T ----

FTQ 100%

1

P/T 3d

W/T 1d

FTQ 80%

2

P/T 1d

W/T 1d

FTQ 100%

2

P/T 4 h

W/T ---

FTQ 100%

2

P/T 4h

W/T ---

FTQ 100%

2

P/T 2h

W/T ---

FTQ 100%

1

68

3 days 3 days 3 days

W= Waiting

P=Over-processing

D=Defect

T=Transportation

M=Motion

I=Inventory

O=Overproduction

U= Non-utilized talent

2h

3 days 3 days 3 days

4h 2d 1d 3d 1d 4h 4h 2h

1 d 1 d

1

1 PMO Team

DM

1

Requests for

missed info

HW SW

suppliers

Contributions

1/2

MEASURE VSM: Waste

Brainstorming

RFI require a lot of time:

answer time is too high

Information about internal

skills and experience are difficult

to collect (personal records)

People don’t like share

information about their projects

Past procurements

Information are on paper

DM are busy and don’t respects deadlines

Contribution from DM are often fragmentary and incomplete

DM writes too slow

Works from different tenders could be mixed

Long time to correct defects (overwriting, more realise)

ANALYSE

Fishbone diagram: delaysANALYSE

Delay in the process

Materials Method Manpower

Management Machine Measure

Workload too high

Lack of skills

No control

Lack of a

monitoring system

Information are

not shared

Organization

chart

static approach:

Waterfall

Absence of a digital

repository for all

documentation

No activity

tracking systemNo KPI

Documents in

hard copy

Network issues

No template for

documentsMotivation (DM)

To many picture to

realisePeople involved in

more than on

activity per time

ANALYSE

Improve Phase: Output

Infrastructure

Content Management System (all in 1)

Tool Scrum to define, measure analyse and

control (Visual monitoring)

Method

Agile approach: SCRUM

Standard template for contribution:

Poke Yoke

skills

Training about:

the process

New tools

Lean Six Sigma

New people in the team with cross functional skills:

Technical Writer

Graphic Designer

IMPROVE

Customer

ApprovalPlanning

TasksRFI

EditingTask

Merge Control Closure Delivery

P/T 2h

W/T ---

FTQ 100%

4

P/T 1d

W/T ---

FTQ 100%

6

P/T 1d

W/T ---

FTQ 90%

2

P/T 2d

W/T ---

FTQ 80%

5

P/T 1d

W/T 1d

FTQ 100%

2

P/T 4 h

W/T ---

FTQ 100%

2

P/T 4h

W/T ---

FTQ 100%

2

P/T 2h

W/T ---

FTQ 100%

1

68

Total P/T: 6 d 4 h

Total W/T: 3 d

Total FTQ: 0.72

Lead time: 9d 4h

Quote

1 day 1 day

1

HW SW

suppliers1

1 PMO Team

DM

IN

2h2h 1d 1d 2d 1d 4h 4h

1 d 1 d

1d

Quick Checks

Content management fulfilment

SCRUMWISE (project

management Tool)

Content Management

System

Feedbacks results

VSM: futureIMPROVE

Framework: SCRUM MEASUREIMPROVE

Content Management System MEASUREIMPROVE

CMS manual fulfilment process (Data entry)

Criteria:

Number of tender to process

Revenue per tender

Number

Revenue

Teleco Energy P. Admin. Others

Number of tender

per client

Teleco Energy P. Admin. Others

CMS Automatic Fulfilment

Criteria:

Occurrence of argument for typology (Pareto Charts)

Automatic fulfilment

during the data process

1. Open Source

2. Simple to use

3. Safe

4. Powerful

Search en.

Kanban vs SCRUM

A Kanban Board helps to manage the

WIP of a value stream or process.

A Scrum Board helps to

manage the WIP associated with a complex

project.

A Kanban Board is usually better suited to

manage the WIP of

individuals

a Scrum Board is better suited to manage the

WIP of cross-functional

teams.

IMPROVEMEASUREIMPROVE

A Kanban Board and a Scrum Board are similar. Both are used to help manage WIP.

However the type of WIP that is managed by each is different.

Control

Inventory

Change management

Capacity/ Respect of deadline

(Burn-down charts)

Daily scrum

Issues resolution

Visual control (Scrumwise Board)

Error control

Process audit every 2-4 week:

Retrospective meetings

Standard template for contribution:

Poke Yoke

CONTROL

SCRUMWISE Story Board & BURNDOWN ChartsIMPROVECONTROL

Effect of the process Improvement in €

Define

Measure

Analyse

Improve

Control

Total P/T: 8 d

Total W/T: 2w and 1d

Total FTQ: 0.4

Lead time: 3w and 4d

Total P/T: 6 d 4 h 1.5days less

Total W/T: 3 d 1W 3d less

Total FTQ: 0.72 +0.32

Lead time: 1W 4d 4h ~𝟐𝐖 𝐥𝐞𝐬𝐬

Use of delivery Managers

2 day/Tender cost 68.000 €

Overtime PMO Team

0 days/month cost 0 €

Use of delivery Managers

4 day/Tender cost 136.000 €

Overtime PMO Team

10 days/month cost 42.000 €

Reduction of process steps

2 part-time resource employed

New Content Management system for RFI

New Agile Method

New Agile tool for continuous

Improvement

Reduction of process time

Cost of the implementation:

8.000 € CMS

1.000€ HW+ installation

7.000€ Data entry cost

Cost of SCRUM Tool: 2.500€/y

New Resource:

• 1 designer (part-time) 12.000€/y

• 1 technical writer (part-time) 10.000 €/y

TOTAL: 30.500€

CONCLUSION

Effect of the process Improvement in QA

Define

Measure

Analyse

Improve

Control

RESULTS: All quality goals achieved

Increase of good placements for technical

proposals (+8%)

Improvements for the future:introduce a set of KPI to monitor the number of

partnerships derived from tender placements

Quality Standard Before:0 defects,

90% of placements in the first 4 positions general

90% of placements in the first 4 positions for the

technical proposal

40% of success

Quality Standard After:

defects: 0

% 1st – 4th place general: 90%

% 1st – 4th place technical: 98%

% of success: 40%

GOAL 4: Keep the same

standard of quality

Evaluation method: clients

graded list (general and for the

technical proposal)

CONCLUSION

“The journey of a thousand

miles begins with one step”

Thanks for your attention!

Lao Tzu - 604 BC