Task_Environment_Audit

Praxis Paper 2 Jo-Ann Savoie Walden University A Project Presented in Partial Fulfillment of the Requirements for DDBA 8110- 5 Business Operations: Systems Perspectives in Global Organizations Dr. Donna Galla October 30, 2010 Introduction The company chosen to examine for the second Praxis Paper is The Hamilton Police Service (HPS). The HPS is a municipal police service located in the City of Hamilton, Ontario Canada. According to the 2008 Annual Report, The City of Hamilton has a population of 518,181 and employs 787 officers and 272 civilians for 1,059 personnel (p.7). Speaking with key supply chain personnel identified two areas that will save the service time and money; employing a full time chief purchasing officer (CPO), and the installation of an asset tracker program for serialized equipment. Under the current policy, the property branch controls the purchase and warehousing of uniforms, cleaning supplies, and office supplies. Each department not under control of the property branch purchases their own supplies. Fleet handles all vehicles and parts required for servicing vehicles, just as the technology branch purchases and services all IT equipment. Specialty units such as the tactical unit and the ACTION (addressing crime trends in our neighborhoods) team also purchase their own equipment without consultation through the property branch. This practice results in multiple vendors, duplication of stock, and probability that the item purchased may only result in a single purchase. Although a one time stock purchase may not be the intent, due to limited stock and retail vendors solicited, items purchased are not considered uniform issue. (Only items purchased though an authorized vendor guarantee continuation of an item’s availability beyond a seasonal cycle). Each department works in its own silo without consultation or collaboration. Having a full time purchasing coordinator would eliminate most of the current overlap. “ Everyone knows that if you spend a dollar less on purchasing, it goes right to the bottom line” (Gerardo & Spanyi, 2008, p. 25). An example to illustrate would be the resent purchase of the ACTION teams high visibility jackets. These jackets were purchased from a retailer not authorized through the Police Co-operative Purchasing Committee; therefore, in the future, if additional jackets are required for new members, the same item, dye lot, and specifications may not be available negating the principle behind the term uniform. An asset tracking system would enhance the current MSM and will assist the police service save time and money by tracking all key serialized items; guns, pepper spray, handcuffs, and Kevlar vests. With an integrated system, vehicles, radios, and computers along with other equipment controlled outside of the property branch can be tracked. The warehousing system currently in place can only identify how many of an item rather than who owns it. For example, if a service weapon was found in an alleyway, there is no centralized database where the serialized item can be entered and identify who owns the weapon. The information is stored in various formats throughout the service. Similarly, Kevlar vests and pepper spray have a self-life. There are no computer programs in place that identify when an item is issued and when an items self- life expires. Officers manually record on paper the condition of their vests during their annual training day. Completed forms are forwarded to the Manager of Record Business Center and Supply Services. There is an expectation that individual officers will recognize the need for a new vest and arrange with the property branch for an exchange rather than waiting for replacement. An asset-tracking program would house all serialized equipment in one key location; regardless how many branches enter their serialized equipment. A centralized asset tracking system would eliminate the various forms of excel spreadsheet tracking system currently being used, further eliminating the lack of consistency between branches. Reason for Choosing HPS The reasons why the Hamilton Police Service was chosen to conduct Action Research are familiarity and time- frame involved for completing the assignment. Having intimate knowledge of key personnel are within the organization is a benefit to conducting interviews and gathering data. There is also vested interest in finding a solution to saving money and time for the organization. “ As an approach to problem solving, it is an application of the scientific method of fact finding and experimentation to practical problems requiring action solutions and involving the collaboration and co-operation of the action researchers and members of the organizational system” (Coghlan & Brannick, 2007, P. 4). Interview Participants After a careful review of existing practices within the property branch, the requirement for a full time purchasing coordinator and an asset tracking system were apparent. In order to reach these conclusions several interviews were conducted with key personnel: Commander in Charge of Corporate Services, Superintendant Mike Shea, Peter Bailey; Manager of Record Business Center and Supply Services, and Jan Griese; Supervisor of Property and Stores Branch. The first interview was conducted with the Commander in Charge of Corporate Services, Superintendant Mike Shea on Friday 8 October 2010. Shea Interview An introductory e-mail was sent to Superintendant Shea requesting authorization to conduct research on the property/stores branch, as well as an outline identifying the parameters of the study. Through e-mail correspondence, it was determined the best time to conduct the interview, the afternoon of Friday 8 October 2010. Clarification was garnered at this meeting clarifying the distinction between the property and stores branch. Although the terms are used interchangeably, they have very separate and distinctive roles. In this assignment, it was decided due to time constraints, only the property branch would be explored. Shea advised the bulk of the budget, $1,0195,700 is spent on uniform stores. (M. Shea, personal communication, October 8, 2010). There was some discussion on the short timeline between Human Resource identifying the need to hire new officers and the time frame for property to respond, however, Shea believed it was not an issue as the JIT vendors used only required a one to two-day notice. When asked if Shea could identify an area that could be improved upon, he could not. She stated, “Although I cannot think of any specific issue, I am open if you come up with anything. The one area runs well, so there is minimal need for me to get involved on a daily basis. Jan and Peter do a great job” (M. Shea, personal communication, October 8, 2010). Bailey Interview Bailey was also interviewed on Friday, 8 October 2010. The interview began with Bailey providing details as to the roles and responsibilities of the property/stores supervisor. Bailey was asked, if you could change anything in the property branch, what would it be' Bailey was quick to identify the need for an asset tracking system. Ten years ago, the service purchased a computerized store management system (SMS) from Austech, a Toronto vendor. The system allows for reports to be generated that can show what stock is currently held and what items need to be ordered (P. Bailey, personal communication, October 8, 2010). Another feature that is available for the SMS but has not been purchased is a $2500.00 asset tracking system. The tracking system would allow for all serialized equipment to be entered manually or by using a bar code scanner in order to track items such as weapons, pepper spray, Kevlar vests, and hand cuffs. The program would also be helpful in the stores branch where evidence is housed. “Several years ago the service purchased Altais, a bar coding machine, however it is not compatible with our records management system NICHE (P. Bailey, personal communication, October 8, 2010). In 2011, a pilot project will see the implementation of cash and drugs (seized), entered into NICHE. If successful, additional items will be added. When asked how items that have a shelf life are tracked such as pepper spray and Kevlar vests, Bailey stated: Manually. When an officer attends Use of Force on an annual basis, staff checks the expiration date of all officers’ pepper spray. If the item has expired, it is replaced. In relation to Kevlar vests, each officer is given time to inspect their vests and fill in a standard questioner as to the serviceability and wear of the vest. Although all sheets are forwarded to me, there really is no priority to view the manual reports. Officers know if they need a new vest, they should attend property and get one. (P. Bailey, personal communication, October 8, 2010) Griese Interview Before meeting with Griese, a series of questions were developed and sent by e-mail. It was agreed upon the interview would take place on Friday 29 October 2010. During Griese’s interview, she was asked to elaborate on some of the questions previously asked: 1. Do you see any problems with the current system for managing supply' 2. If money were not a concern, would you change anything' 3. Is there a benefit to the service to belong to the Police Co-operative Purchasing Committee' 4. Do you believe purchasing the asset-tracking program from Austech would be a benefit to the service' Griese acknowledged her paramount concern was managing and purchasing is not done consistently. “I believe HPS would benefit greatly by having a full time purchasing co-coordinator, whose sole responsibility is to coordinate the procurement of all goods and services” (J. Griese, personal communication, October 29, 2010). Griese further elaborated on how the purchasing duties would be the responsibility of one person, who by consulting and collaborating with the end users would prepare the request for quotes, tenders and specifications of the products required. Griese identified that she belongs to a sub committee of the Ontario Association of Chiefs of Police, the Police Co-operative Purchasing Committee. The committee members are purchasers from all police services in the province of Ontario. Griese stated the Hamilton Police Service is the only service out of the 10 largest police services in the province not to have a full time designated purchaser (J. Griese, personal communication, October 29, 2010). Mentzer et al. (2007) discuss the benefits of collaboration in order to achieve cost savings. “…the management of relationships with supply chain partners to match performance with measure and rewards so that all companies in the supply chain are fairly rewarded for overall supply success” (p. 68). One of the advantages to belonging to the group is the ability to purchase as a group, which greatly reduces the cost and the amount of time spent on writing requests for quotes and tenders. Once an item has been identified for purchasing, a police service is tasked with taking the lead. With the assistance of one or two members from the committee, the service will prepare the tender; perform wear tests, and makes final bidding selection. Once the process is complete, it allows other services to purchase from the vender with the same contractual price. Prices are typically set for a two to four year period. “One of the disadvantages of not having a full time purchaser is often I do not have time to take the lead so we settle for a product that we may not have chosen if given the opportunity” (J. Griese, personal communication, October 29, 2010). Maintaining a network of experienced practitioners allows Griese to be informed of new products available as well as ensure the police service is getting the best value. Delivery and craftsmanship are also discussed. “ There is power in numbers, suppliers are aware of the committee and know if they offer a good product, at a good price, they will be awarded the contract. They will not just get one service’s business, but many” (J. Griese, personal communication, October 29, 2010). The ability to cut costs, even if by 1%, would have a substantial positive impact on the bottom line. Cost savings in one area can off set the costs in another. “The scope of opportunity for purchasing-driven profitability to make a significant incremental contribution to the bottom line is considerable for most companies” (Gerardo & Spanyi, 2008, p. 26). When asked Griese’s thoughts on purchasing an asset tracking system, she stated,“ we track serial numbered of handcuffs, body armor and pepper spray. Other areas track service guns, radios, computers, etc. I think it would be more efficient to have one program that did all of this rather than the ‘silo’ data bases currently in use” (J. Griese, personal communication, October 29, 2010). Advantages VS Disadvantages The service employs several people from various branches; property, use of force, tactical, fleet, as well as the IT, to maintain, care, and control of serialized equipment. In order to complete any given audit, each branch has to be contacted separately. There is no consistency as to the program used or how the format is prepared. At no time can anyone look in one location and see all serialized equipment. Purchasing Austech’s $2500 system that can be added to the existing SMS, would allow better control and accountability. It will also reduce time when attempting to locate who owns what equipment. Although there would be a significant amount of time required to data input all equipment, once in place, the product will pay for itself. The task of purchasing major items, such as uniforms, vehicles and serialized items falls to who ever are in charge of that branch. In today’s economy police services are told to do more with less, every dollar spent is scrutinized to ensure it was spent wisely. Duplication of purchase in itself would be just cause to have a full time CPO. Griese attributed missed opportunities to the lack of a full time purchasing officer. As a supervisor, Griese is left with very limited opportunity to act in the capacity as a purchaser. She stated in her opening statement that purchasing is not done consistently. Conclusion The Hamilton Spectator reported that the Hamilton Police Service total budget is $127.3 million which 86% is dedicated to salary (Buist, 2010). Salary is a contractual item leaving no room for maneuvering. If there are to be any cost saving measures, they have to be realized within the supply chain. Taking a serious look at hiring a chief purchasing officer and installing an asset tracking system may result in significant savings. In order to hire a CPO, the position should be given the utmost consideration to find the right person. According to Gerardo & Spanyi (2008) “Typically, to put the right executive in place as the CPO involves taking a high-profile person, with a sales/marketing or strategic Business Unit (SBU) leadership background, and putting this person (with weight and influence) in charge of procurement” (p. 28). The person should also have a deep understanding of policing, and a strong understanding of the supply chain management. All police services should be canvassed for a copy of their CPO’s terms of reference. Taking a risk management approach to asset tracking, it makes financial sense to invest the $2500 needed to purchase the asset tracking system from Austech. The benefits far outweigh the impediments. In today’s technology marketplace, it is difficult to understand why this tool has not been purchased to date. There is also a need to remove all existing silos and bring all serialized equipment under one tracking system. References Buist, S. (2010, October 20). Police budget keeps rising up 24% while crime rates drop 10% in same period. Retrieved from http://www.thespec.com/news/Municipalelection/ article/268890--police-budget-keeps-rising Coghlan, D., & Brannick, T. (2007). Doing action research in your own organization. (2 ed.). London, California, New Delhi: Sage. Gerardo, R., & Spanyi, A. (2008).The CFO’s best friend. Strategic Finance. 90(6), 25-30. Retrieved from http://ezp.waldenulibrary.org/login'url=http://proquest.umi.com.ezp. waldenulibrary.org/pqdweb'did=1607404121&sid=1&Fmt=2&clientId= 70192&RQT=309&VName=PQD Hamilton Police Service Corporate Planning Staff. (2009). 2008 Annual Report saluting our past- promoting our future celebrating. Hamilton. Ontario, Canada: Author. Mentzer, J. T., Stank, T. P., & Myers, M. B. (Eds.). (2007). Handbook of global supply chain management. Thousand Oaks, Ca: Sage.