Decision Making by VORT
As an executive of a company or projects, you prefer to decide based on quantitative and qualitative data. Basically you are balancing risks when you decide. VORT supports the executive by eliminating risks or reducing risks wherever possible or giving insight in the possible consequences of a decision for the remaining risks.
VORT is specialized in decision making related to the transition to smart, sustainable and innovative city logistics. Always the executive board is in charge of any decision. The executive board exists of the executive (sponsor), senior user(s) and senior supplier(s) sometimes supported by a senior consultant (e.g. lawyer).
DECISION PREPARATION
The service "Decision Preparation" of VORT exists of 6 steps:
1. Situation appraisal:
Clarify the situation, outline concenrs and choose direction
2. Gap analysis:
Clarify the gap between the current situation (situation appraisal) and the preferred situation including the requirements
3. Decision analysis:
Identify alternatives; analyse risks on each alternative
4. Potential problem analysis:
Scrutinize against the potential problems and negative consequences for the best of the alternatives; propose countermeasures to minimize the risks
5. Rough-cut business case:
Determine financial kpi's for the best of the alternatives: total cost of ownership (TCO), return on investment (ROI); tailor made kpi's can be included. The KPI's are based on first quotations and assumptions and need to be reviewed after the decision (preparation phase of a project; see Project Management). The same KPI's will be reviewed after disclosure of the project.
6. Report with recommendation:
Finally VORT will create a report. The report will be to the point, a management summary containing: which decision is requested, a recommendation supported by the main conclusions with the financial kpi's, and which countermeasures should be included in the next step.
Basically the only thing you need to do is taking the decision!
TENDER
The tender process of VORT is based on the theory of Van Weele. The following aspects of the purchase process according Van Weele (2010), Specifying, Selecting, Contracting will be executed during decision making. The remaining aspects his purchasing process, Ordering, Expediting, Follow-up and Evaluation, shall be part of Project Management. It is possible that multiple tenders should be executed in parallel (e.g. IT, logistics, hardware). Of course, VORT can provide templates for each of the following stages.
i. Installation Tender Team
In the team should participate senior user(s) (able to specify the requirements), a purchaser and a legal officer. VORT shall take care of the project management.
ii. Determination of Strategies
This is an important activity. You need to have an idea about the general strategy (e.g. of a city, neighbourhood association), a strategy on the solution (e.g. customers should have the possibility to pick-up the goods), a purchage strategy (e.g. the implementation will be fully outsourced).
iii. Specification
Based on the strategy the final requirements are determined. Basically this activity is a review of the gap analysis during the decision preparation stage (step 2. Gap analysis) under the responsibility of the senior user(s) supported by VORT.
iv. Selection
During this stage two selections need to be done: selection of the preferred supplier(s) and the preferred solution. The purchaser should analyze the market and develop a long-list of potential suppliers.
Request for Information (RFI)
The next step is to invite the kandidates of the long-list to attend to a request for information (RFI). VORT will create the RFI document together with the purchaser (general company information, reference projects, net profit, working capital, cash-flow position, etc.). The tender team prepares a short presentation and a recommendation for the short-list.
Request for Quotation (RFQ)
After the decision for the short-list, the suppliers not selected for the short-list will be informed. The selected suppliers will be invited to participate in the RFQ. The RFQ document will be created by the team of senior user(s) and the purchaser of course supported by VORT. The kandidates are requested to answer general questions, to recommend solutions and alternatives and to provide the quotation for the recommended alternative plus one other alternative. The kandidates have the opportunity to raise questions during one meeting. The answers will be shared with all the kandidates. During the second meeting, the kandidates have the opportunity to present their answer to the RFQ. After the meeting the kandidates can review their answer one more time, before they send the final version back to the team.
The team needs to analyse the answers and compare the outcome. Based on this analyses the first selection will take place: suppliers that cannot meet the requirements, will be excluded from the RFQ. Negotiations (by the purchaser) shall start with the remaining suppliers.
After the negotiations again a short presentation will be prepared by the tender team with the final recommendation for the preferred solution from the preferred supplier(s). The executive board shall decide now if the contracting stage can be started.
v. Contracting
The purchaser and the legal officer will develop a contract with the preferred supplier for the preferred solution. Important during this stage is to determine which kind of relationship the project team will have with the supplier: a partner-relationship requires a different contract than "spread-and-rule" relationship with multiple suppliers. VORT can support the contracting stage.
When a contract has been created with the approval of the project team including and especially the legal specialist ánd the preferred supplier a final version will be created. The final version will be signed first by the preferred supplier, and after that by the executive on behalf of the executive board.
NOTE: be aware that after signing the contract both the executive board and the preferred supplier have the responsibility to comply with the contract!
As soon as the contract has been signed by all parties, smart, sustainable and innovative city logistics can become reality.
Ordering can be done during stage 2 of Project Management, the Exploration stage.