market engagement for low carbon solutions · 2005 environmental innovations advisory group – fcp...

MARKET ENGAGEMENT FOR LOW CARBON

SOLUTIONS

Gaynor Whyles, JERA Consulting

Experience and learning from PPI Projects

GPP 2020 WEB SEMINARAPRIL 2014

Innovation procurement actions

� 2005 Environmental Innovations Advisory Group – FCP

concept

� 2006 Demonstration projects eg ‘zero waste mattress’

� 2008 FCP Innovation for Sustainability Programme - UK

� 2009 LCB-HEALTHCARE – PPI Projects UK, Poland,

Netherlands – Low CarbonNetherlands – Low Carbon

� 2011 Down to Zero Low Carbon Procurement Compacts

� 2012 EcoQUIP – PPI Projects ‘Efficiency Quality and

Sustainability’ + Hungary, Italy

� 2012 TRANSFORM – Low Carbon - Zero Emission

Transport in Cities

� 2013 INNOCAT – ICLEI led - Low Carbon Vending

project

Some Case

ERASMUS MC

Sustainable Bed Washing

Facility

ROTHERHAM NHS FOUNDATION TRUST

Future Ward Solution

Thermal Comfort for Hospital

Patients and Staff

Zero Waste Some Case Examples of PPI (FCP) in Action

NOTTINGHAM NHS TRUST

Low Carbon Energy -Fuel Cell CHP

ROTHERHAM NHS TRUST

People centered low carbon

catering

RAWICZ COUNTY HOSPITAL

Low Carbon UNIFORMS

Zero Waste Prison

Mattress

The status quo…….

This is what we

bought last

time…and it was

the cheapest….no

one

complained….well

not much

This is what they

bought last time

…they seemed

to like it…so best

not change it….not much

The buyer-supplier paradox

� Suppliers respond to customer demand

� Customers tend to buy what is available – rather than

asking for what they need……….this leads to ‘more of the

same’ and stifles innovation

� Successful market engagement needs customers to:

– know what outcomes they need,

– be open to new ideas and enable the supply chain, and

– be able to convince the supply chain that you are

seriousserious

“Successful market engagement needs you to know what you

want to achieve, be committed to achieving it, and to be able to

convince the market that you are serious, that you really want it.”

Successful innovation procurement needs suppliers to

have:

– an accurate understanding of your needs

– sufficient incentive to innovate

– advance notice of requirements

This is what we suppliers need; information on our customers

needs today, and even more helpfully their future needs.

We can then plan and manage our supply chain so we are ready

to respond”.

Peter Jones, Director of Design, Skanska

https://vimeo.com/80540480

Forward Commitment Procurement (FCP) A practical PPI methodology

Market Identification

Market Engagement

Procurement

� FCP thinking drawn from innovation policy, procurement professionals, UK Office of Government Commerce, and critically, suppliers

� FCP mirrors the active approach to supply chain management taken by the private sector

– Clearly identify and articulate future needs– Clearly identify and articulate future needs

– Search out and engage with potential suppliers

– Provide a credible ‘promise’ of future sales

– Provide demand side information and support delivery

– (while maintaining competition)

– (compliant with the legal framework)

Key features of innovation procurement

Early supply chain

Competitive dialogue

Routes to the wider market

Supply chain consultation

Pro-innovation procurement strategy

CRE

D

COM

M

Outcome based requirement

Demanding and committed leadership

Policy – ProcurementUnmet needs

Early supply chain engagement

Specific procurement

market

Professional project management

DIBILITY

MITMENT

Think ahead – allow time

Integration into a process

Early supply chain

Competitive dialogue

Routes to the wider market

Supply chain consultation

Pro-innovation procurement strategy

CRE

D

COM

M

FCP Method

Outcome based requirement

Demanding and committed leadership

Policy – ProcurementUnmet needs

Early supply chain engagement

Specific procurement

market

Professional project management

DIBILITY

MITMENT

Think ahead – allow time

The Forward Commitment Procurement Methodology

1. Identification

Recognise problems, unmet

needs & opportunities

Consult with stakeholders and

2. Market Engagement

Market Sounding

Market sounding review & analysis

3. Procurement

Develop a pro-innovation

procurement strategy

Feedback to the supply chain and

stakeholdersstakeholders and set up team

Define an outcome based requirement

Prepare a FCP project

outline/business case

Project approval/sign off

& analysis

Supply chain feedback

Market consultation

Market consultation report

stakeholders

Implement procurement strategy

Negotiate Procurement

Contract

Only once you are clear what you need, tell the

supply chain in a way they can understand and

that stimulates a response……

We need to deliver these outcomes. We need to buy a

solution within 3 years. We can make a forward commitment to

buy. What are our options?

Is it worth my

investments?

buy. What are our options?


Market Sounding


• Market sounding is a useful and

effective way to communicate yourunmet needs to the supply chain.

• Start early. Years not months in

advance.

• To assist communication with thesupply chain, it is helpful to put togethera Market Sounding Prospectussetting out the:

analysis


Market consultation


setting out the:

• unmet need (the problem or issueyou are addressing)

• requirement (in outcome terms)

• context (current situation, whyinnovation, drivers)

• procurement opportunity (scale andtimeframe)

• wider market (who else has thisunmet need)

What is the one thing

in common with all

these MSPs?these MSPs?


Market Sounding


• Prior Information Notices in the OJEU are an effective way to launch a market sounding.

• Be proactive in seeking out suppliers and communicating your needs

• (communication plans are helpful)

• A market sounding response form analysis


Market consultation


• A market sounding response formcan be helpful.

Definition: Market Sounding

“Market sounding is the process of

assessing the reaction of the market to a

proposed requirement. Market soundingshould begin at the earliest possible stagein the procurement process”.


Market Sounding


• A ‘Directory of Interested Companies’facilitates cross-fertilisation

• Analyse (but don’t ‘evaluate’) review & analysis


Market consultation


• Analyse (but don’t ‘evaluate’)

responses

• Keep communicating to the supplychain


Market Sounding


• Market consultation workshopsenable you to

• develop the dialogue with the supply & analysis


Market consultation

Market consultation

report

• develop the dialogue with the supplychain and

• identify any perceived barriers

• Record the market consultation eventand publish a summary report

• helps demonstrate you aremaintaining a level playing field

Market meeting day at Erasmus MC, Rotterdam

“The market engagement not only gave potential suppliers advance notice and time to

innovate, it also stimulated a valuable exchange within and between supply chain. This has

resulted in more innovative and ‘out of the box’ solutions from consortia formed at the

market meeting.”

Marieke van Putten, Programme Manager Public Procurement of Innovation, Ministry of Economic Affairs, Agriculture and

Innovation

“Market sounding was new to us, but gave us the opportunity to test and influence the

market and highlight issues that the supply chain may not be aware of. For example, we

tried completely new industrial sector that have no track record in health care. They

responded enthusiastically to our challenge!”responded enthusiastically to our challenge!”

Joram Nauta, Pilot Project Manager, TNO for Erasmus MC

Market engagement

� Gives the supply chain � advance notice of the requirement and future procurement

� a framework to feedback on the requirement and how it can be met,

potential barriers etc.

– A response form helps to standardise responses

� Gives you a sense of the appetite of suppliers, capacity, capability,

options available, etc.

� How do you let the supply chain know? � How do you let the supply chain know?

– Need to be proactive

– Use intermediaries (e.g. trade organisations, innovation networks)

– PIN is a useful catch all

– Inform incumbents

“What is great about this process is that it gives us time to plan,

build consortia, and bring new solutions forward”•workshop participant

Key points

� Communicate your requirement to the supply chain proactively

� Use outcome based terms and keep carbon up-front

� Start early

� Need to convince the supply chain of your credibility and commitment as

a customer a customer

� A market sounding prospectus is a helpful tool

� A Prior Information Notice in the Official Journal of the EU adds credibility

� Demonstrate a wider demand

� Engage with the market in the context of a real procurement

� On-going improvement e.g. progressive reductions in operational and

embedded carbon over the life of the contract

More information……

market engagement for low carbon solutions · 2005 environmental innovations advisory group – fcp...

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