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Following is the Introductory Remarks by the Director of Government Supplies, Mr Nigel Shipman, at the Press Conference on Quality Improvements in Government Supplies Department (GSD) today (November 3):
Ladies and Gentlemen,
I am pleased that you have been able to join us on this occasion to mark the award of ISO 9002 Accreditation for the two main divisions of this Department. Our Procurement and General Divisions provide purchasing and stores management and delivery services to government departments and to certain other parts of the public sector, including the Hospital Authority.
This is the culmination of a process that began about two years ago to raise the standard of performance in line with the requirements for accreditation. It has involved a systematic review of all procedures to ensure that they maintain good quality standards, are fully documented, that staff receive regular training in their use and that there are effective control measures for detecting and correcting any deviations. Particular attention has been paid to an accurate delineation of staff responsibilities and to the maintenance of stringent safety procedures, particularly in respect of our storage and delivery operations. Staff of the Hong Kong Quality Assurance Agency conducted a detailed review of our revised procedures and how they are put into practice before determining that the standards for accreditation had been met. Moreover, this is an on-going process and we must demonstrate our commitment to continuous improvement. Further visits will be made at six-monthly intervals to ensure that the quality standards have not only been maintained but that further improvements have ensued to meet changing circumstances.
In the spirit of continuous improvement, I would like to advise you of some of the other developments underway to raise the quality of our services, to reduce costs and to enable higher performance targets to be met.
You will later this morning see a demonstration of the vehicle tracking system that is currently being installed on our delivery fleet. This system will ensure that the management of this Centre have accurate information about the location of each of our 17 vehicles throughout the day. Not only will this make for better management control, but it will also enable more flexible vehicle deployment to meet particular customer requirements.
We have recently undertaken with the help of consultants benchmarking studies where our costs, processes and service levels were compared with those of several private sector companies. This has enabled us to identify more clearly those aspects where we should attach priority to raising our performance standards. It has also provided useful guidelines to the changes to our processes that would help to raise these standards.
As part of our efforts to reduce costs, we are phasing out our less economical and low value-added operations. GSD used to have a substantial role in repairing and reconditioning the furniture provided in government offices and quarters. With the move to less wooden-based furniture, the demand for this kind of work has declined and the work that is still needed can be done more economically in the private sector. We shall therefore be closing down our Furniture Workshop early next year. We are also engaging a private contractor to undertake part of our delivery work.
Overall, we have made good progress over the years in reducing staff numbers. At its peak in 1975, GSD had 1,200 staff. By the time I came to this Department in May 1993, the number had fallen to 745. Our strength today is 435 and with the help of the Voluntary Retirement Scheme the number is expected to fall further, to about 360 by the end of 2001.
Our procurement services continue to enable departments to obtain regular supplies and items to meet special needs at prices that are substantially below what could be obtained through piecemeal purchasing and at lower administrative cost. The value of the purchase contracts that we arranged in the last financial year, at HK$6.5 billion, set a new record, despite the levels for decentralised departmental purchasing having been raised. Our recurrent purchases were made at prices that were 13.6% below the prices obtained in the previous year, compared with a fall of 5.5% in the CPI(B). Savings of over HK$245 million were achieved through contract negotiation. We pay particular attention to obtaining the best available outcomes on high value and critical purchases. Last year we bought some HK$2.4 billion of computer equipment and software. This included PCs and related equipment for schools and government offices, for which we devised a new procurement strategy that allows end-users to choose between the products and services of several approved suppliers who are committed to various ceiling prices. This arrangement has ensured that competition for price and value continue after contract award.
We are making full use of information technology and electronic commerce in our purchasing work. In April of this year, we introduced an Electronic Tendering System to supplement our traditional paper-based tendering system. This System enables subscribers, who pay the modest fee of HK$800 a year, to download tender documentation and submit their tender offer by secure electronic means, thereby obtaining substantial savings of time and cost. The System enables us to extend the reach of our tender invitations to new suppliers, thereby increasing the competitiveness of tender offers.
Earlier this year we upgraded our procurement management system, enabling departments to give on-line notification of their tender requirements and facilitating better monitoring of the whole tendering process and of suppliers' subsequent performance after contract award.
We are also embarking on a major review of the further uses that might be made of information technology and electronic communications in our work. This will include a study of the possibility of developing an electronic marketplace to replace the system of faxed quotations used for most low-value purchases.
There are two further developments relating to purchasing that are worthy of mention. First, following a three-year pilot scheme, we launched a purchasing card programme in April of this year. This is designed to help departments to reduce the administrative cost of effecting low-value purchasing transactions.
Second, we are fully committed to the Government's environmental protection and waste management programmes and we believe that environmentally-responsible purchasing does have an important supporting role to play in these broader government programmes. We are reviewing the tender specifications of all our regularly purchased items to remove features that may be environmentally damaging or give rise to waste disposal problems and to encourage and support recycling and environmentally responsible manufacturing practices. Moreover, to demonstrate our own commitment to be an environmentally-responsible organisation, we are seeking accreditation of our own operations and practices under the ISO 14001 Environmental Management System.
We are thus continuing to enhance the value and quality of our services, to enable our customers to serve the people of Hong Kong more effectively.
End/Friday, November 3, 2000
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