budget master

OSP Product Analysis

OSP commodities

Site AcquisitionA & E

GeoTechConstruction Management

Construction Structural Analysis

Site AcquisitionLT: 2 months

Commodity flow chart to build a Cell Site

Cell Site

A&ELT: 2 weeks

GeoTechLT: 1 week

Construction Man.LT: 10 -30 days

ConstructionLT: 10 – 30 days

Structural AnalysisLT: 1 – 2 weeks

Construction Bid matrix

2002- Low BidLow Performance

High amounts of Change orders

More work

More decisions.

Higher risk

2004 -Score CardsMotivates suppliers to improve performance. KPI.

Moves Risk to the Supplier.

Con

trac

tor

Per

form

ance

2003 - NegotiatedDoes not motivate suppliers to

improve performance. No scores for PM / to review.

high

low

2005 - Produces Increased savings per region

Quality Improvements / suppliers.

Higher Competition / leverage.

Improves On Time schedules.

Reduces change orders. / less work.

Savings

Current

9 million

Projected year end

18. Million

Projected with KPI score cards 2004

40.1 million ( 18 percent ) increaseThe best service at the right time for the best price.

Screen PM uses in BM

Type / Supplier needed per site

Reports

• Currently

• Cell Site Listing

• Site Details

• BAR

• Vendor

• Recommended

• Minority Spend

• Score Cards

MWBE

$0.00

$500,000.00

$1,000,000.00

$1,500,000.00

$2,000,000.00

$2,500,000.00

$3,000,000.00

$3,500,000.00

$4,000,000.00

$4,500,000.00

Falkenberg ProfessionalEngineering

CFX LP RPR Architects

Add KPI Scores to Bar

Recommend 4 measurements

• Price

• Performance

• Customer Satisfaction

• Safety

Common Measurements in Services

• Responsiveness in hours/days. • Percent rework/job.• Percent scope changes/job • Percent of overrun cost.• Risk and Time.• Customer satisfaction rating.• Total cost of project.

Performance Management Process

RESOLVEMEASURE

Monitor

Performance Management for OSP

Measures•Response Time. •Percent rework.•Overrun cost.• Service rating.

Monitors•Changes over 12 %

•Supplier Survey

•Large Projects

Resolve•Email Supplier

•Email P M

•Request Supplier Survey

• Poor performance

KPI Data in BM

• Provides the best method for gaining and retaining cost savings in OSP services.

• Provides KPI data for PM and Purchasing.• Provides suppliers an opportunity to improve.• Provides Cingular leverage in renegotiations.

ScoringLayer

Translation Into Scorecard Values

Budget Master-Based Supplier Scorecard

Budget Master Data

Real-Time Detection

Agents

Quantitative Calculations -

KPI

Qualitative Surveys

Au

tom

ated

Pro

cess

Foundation Layer

Supplier Scorecard Components

KPI Flow Matrix• PM picks suppliers in BM

• CM grades all suppliers / per site over 100 K• CM faxes / delivers score cards to Cingular – 2 days• Admin enters scores into BM – 2 days• PM uses BM / new site / views updated region scores.• OPS team communicates score with suppliers / month

KPI Score Card Example:

NO # Indicators Scale Rating

1. Performance 5 - 50 42

2 Customer Service 5 - 50 43

3 Quality 4 - 40 38

Total SCORE FOR Performance Indicators 14 -140

KPI Supplier Score grading system

TOTAL KPI Supplier Score 123

120 -140 Excellent – Reward Supplier

100 -120 Exceeds Goals

90 - 100 Meets Goals

80 - 90 Immediate Improvements required

0 - 80 Remove Supplier from BM / 2

Supplier Scores Vendor Name Performance Customer Service Safety ResultsScore 5 to 50 5 to 50 4 to 40 Telecommunications 42 43 38 123Barge Wag Sojj 35 35 30 100BuHorn, Inc 33 33 30 96Burgple 30 30 28 88

Example Scores per Quarter

West Region

0

20

40

60

80

100

120

140

Q1 Q2 Q3 Q4 average

ADC Telecommunications

Supplier scores / region / yearSupplier scores per region per year

0

20

40

60

80

100

120

140

West East Central Gulf Coast Average

ADC Telecommunications

Six Key Supplier Management Recommendations

• Include a clause in the Construction contract.• Implement Key Performance Indicators in BM• Gain Visibility To Supplier Performance.• Rate and Analyze Supplier Performance.• Communicate scores and violations to suppliers.• Use scores to improve performance,remove suppliers

or re negotiate.

The reasons to implement KPI

• To leverage the purchasing power with the goal of creating a smaller pool of quality suppliers.

• To aggressively advance the initiative of equal economic opportunity through proactive and innovative measures.

• To hold the supplier accountable in meeting expectations for higher performance.

Review• Modify the construction contract.• Implement supplier performance in BM• Request the field enter KPI data in BM• OPS Team will send scores to suppliers.• Discuss scores / violations with supplier.• Reduces risk and increase quality of work.

Conclusion

• Are there any questions ?