Success Story

Read in an interview with Dmytro Trotsenko, Head of the Investment, Construction, and Repair Department of UKRTRANSGAZ JSC, on what principles the effective interaction of the buyer with the internal customer is built, how to optimize this interaction, and what results can be obtained from it. The material was prepared as part of a joint special project SmartTender and KSE on the achievements of graduates of training programs for customers of the Center for Excellence in Procurement of the Kyiv School of Economics.

Tell us about your purchasing experience

I started with the provision of material and technical resources to the production facility, and then to the district, management, and branch. During my work in various positions, I saw changes in the procurement process, which was constantly being transformed under the influence of changes in legislation in the country. I have my own experience in working with business processes, both at the enterprises of the contracting organization, direct performers of services and works, and at the customer's enterprise. Starting from 2015, I was the chairman of the competitive bidding committee of the GPM Kharkivtransgaz of PJSC Ukrtransgaz, and from 2016 to 2019, the chairman of the tender committee of the GPM Kharkivtransgaz of PJSC Ukrtransgaz.

How do you apply the knowledge gained from studying at KSE?

The training program covered strategic, tactical, and operational levels of procurement. It allowed to structure the existing and acquired knowledge and gave an understanding of the transition from "process" procurement to strategic.

Until now, we continue to use the basic principles that we learned during our studies at the KSE Center for Excellence in Procurement which help to establish effective interaction with an internal customer. In the original, these principles sound like this:

1. Determine who is the internal customer for this category.
2. Agree with him on the category profile and subcategory breakdown, discuss open-ended questions, and "strange" past spending.
3. Find out the needs of the internal customer and their vision of the current purchasing process and interaction with you.
4. State your vision of the procurement process (there may be surprises for many internal customers).
5. Formulate and voice the challenges identified during the analysis of current practices and discuss potential initiatives to improve them.
6. Establish an ongoing dialogue with the internal customer (for example, arrange an hour-long meeting once a week) and proactively manage their expectations. For example, you can report that for a well-conducted procurement process, at least 6-8 weeks pass from the moment of the order to the contract.

Success Story

What were the stages of optimizing interaction with internal customers of your company?

A universal method for optimizing a business process is to exclude actions that do not create added value (value for the consumer) or do not ensure compliance with legislation (rules).

We started optimization by identifying problems. But it was not enough just to capture them, so a root cause analysis was performed and key factors selected. We understood that it is impossible to solve everything at once: if attention is scattered, there simply will not be enough time and resources to eliminate the main weighty problems. But despite this, you still need to fully understand all the problems and initiatives to solve them, categorize them according to the degree of importance and have a timetable for solving them.

We paid special attention to communications at all stages of the business process by the current internal regulations. This was achieved through the following actions:

- vertical compression of areas of responsibility (delegation of responsibility) – the responsible executors independently decide on the application within the competencies enshrined in the regulations;
- reducing the number of checks and control due to the parallel consideration of the application.

Success Story

To implement the plan, it was necessary to clearly define the control points of the intermediate stages to control the process and identify the risks and obstacles to implementation that will need to be worked with to achieve the goal.

What results are you already seeing from this optimization?

By implementing the project “Optimizing the process of interaction between internal customers”, we reduced the processing time for applications, freed up the time of technical workers, which in turn allowed us to focus more on the implementation of production programs and ensure uninterrupted and trouble-free operation at the enterprise. The results of our work fully coincided with the company's strategy.

Success Story

Now the Naftogaz Group is being reformed and aims to be an effective company, including due to the operational excellence of the procurement function, an increase in the quality of service and trust on the part of stakeholders, unification of approaches and methodology of the procurement process. In addition, the Group is implementing a unified Supply Chain Management (SCM) system.

What are your TOP-5 personal tips for organizing effective interaction with internal customers?

To reach the next level, the following five factors are required:

1. Team (its development, attraction, support). It is important to ensure free access to information for all interested parties.
2. Understanding the value for consumers. Focus on customer interaction.
3. Understanding which activities do add value and which don't. A clear understanding of the places of formation of value (added value).
4. Getting rid of activities that do not bring value to consumers.
5. Continuous improvement and work on added value. Optimize first, then automate.

How to become a professional buyer?

If you also want to improve the organization of tenders in your company, learn how to apply category management, and analyze data on made purchases, we suggest you the course “Purchasing Management” from the CEP KSE. Click the button below for more details.

Read about the course

Read the previous Success Story within the joint special project SmartTender and KSE here.

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