Use Case: Bidding System

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The Bidding System project aimed to develop a robust and efficient platform that would facilitate seamless and transparent bidding processes for our organization. By revolutionizing our bid procedures, we intended to enhance our vendor collaborations, streamline procurement activities, and achieve substantial cost savings while improving project outcomes.

• Vendor Risk and Price-Based Selection: On one hand, due to the high cost of goods, insuring each individual item during transportation is not feasible within Ukrainian market realities. On the other hand, manual vendor selection processes prioritize vendors solely based on price, ignoring past vendor performance (lack of vendor ratings). As a result, TiT assumes risks associated with service providers, leading to significant losses over the year.
• Manual Tender Processing Limitations: The manual handling of the tender process restricts the ability to engage the maximum number of vendors in bidding, thereby hindering the opportunity to enhance delivery quality and reduce costs.
• Accreditation Process Absence: The absence of a structured accreditation system for new participants in the bidding process poses challenges in ensuring the credibility and competence of new entrants.
• Complex Communication: The intricate and complex communication process between various departments and external transport companies during the tender collection phase creates confusion and increases the potential for errors.

These pain points collectively hindered the efficiency, transparency, and effectiveness of the organization's procurement and bidding activities. The Bidding System project aimed to alleviate these challenges by introducing automation, improving communication channels, enhancing vendor evaluation methods, and ensuring a more balanced and data-driven decision-making approach.

Business Goal 1: Enhance Procurement Efficiency and Risk Management

Objective 1: Mitigate Vendor Risk

• Develop a comprehensive vendor rating system to evaluate vendor performance beyond cost.
• Reduce financial exposure by ensuring reliable and competent service providers.
• Minimize losses due to vendor-related incidents by making informed decisions based on vendor ratings.

Objective 2: Streamline Bidding Processes

• Implement an automated tender processing system to efficiently manage bids.
• Increase vendor participation by simplifying and digitizing the tender collection process.
• Improve vendor selection to optimize cost, quality, and delivery outcomes.

Business Goal 2: Foster Transparent Collaboration and Communication

Objective 1: Implement Accreditation Process

• Establish a structured accreditation system for new bidding participants.
• Enhance credibility and trust by verifying the competence of new entrants.
• Ensure fair competition and strengthen vendor relationships.

Objective 2: Simplify Communication Channels

• Integrate a user-friendly communication platform for streamlined interactions.
• Facilitate seamless information exchange between departments and external partners.
• Reduce confusion and errors through transparent and efficient communication.

Assumptions:

• Expansion into External Market: It is assumed that the system will be further developed and positioned as a standalone product for entry into the external market. The system's expansion aims to capture a significant market share in the agricultural machinery transportation sector, leveraging its existing capabilities and reputation.
• Market Leadership in Agricultural Machinery Transportation: The assumption is made that by offering a specialized bidding system for agricultural machinery transportation, the system will be well-positioned to establish industry leadership in this specific market segment.
• Resource Allocation: The assumption is that the organization will allocate necessary resources, including budget, manpower, and technology, to support the system's evolution and successful entry into the external market.
• Strategic Partnerships: The system's successful entry into the external market may depend on forming strategic partnerships with relevant stakeholders, such as agricultural machinery manufacturers and transport companies.

Limitations:

• Integration Complexity: Integrating the system with existing internal platforms and external partners' systems may pose challenges in terms of compatibility, data exchange protocols, and potential disruptions during integration.
• Training and Adoption: User adoption and effective utilization of the system may require comprehensive training programs for all stakeholders. Overcoming resistance to change and ensuring a smooth transition from manual processes may be critical.
• Technical Dependencies: The system's performance and availability may be influenced by external dependencies, such as the reliability of third-party cloud services and infrastructure providers.
• Regulatory Compliance: The system's compliance with evolving data protection laws and industry regulations may require ongoing updates and modifications to ensure continued adherence.
• Customization Complexity: Addressing unique requirements of different departments or future market segments may involve complex customizations, potentially affecting system stability and maintenance.
• Scalability: While efforts are made to ensure scalability, rapid and substantial growth in user base and data volume may require adjustments to infrastructure and architecture to maintain optimal performance.

In addition to the core development metrics of delivering the project on time, within budget, and with the necessary development quality (schedule adherence, budget compliance, and quality standards), as well as the project's Return on Investment (ROI), the key success metrics that will define the project's success are:

1. Vendor Risk Reduction Metric: 

Success Criterion: Achieve a 30% reduction in financial losses attributed to vendor-related incidents within the initial year, accompanied by a subsequent decrease in the inclusion of underperforming carriers in bid processes. 

Measurement Method: Conduct a comparative analysis of total financial losses resulting from vendor-related incidents before and after the implementation of the vendor rating system.

2. Tender Efficiency Enhancement Metric: 

Success Criterion: Increase vendor participation in each tender by 30% during the initial six months. 

Measurement Method: Track the average number of participating vendors across tenders before and after the adoption of the automated tender processing system.

3. Accreditation Process Effectiveness Metric: 

Success Criterion: Expedite the selection and accreditation process for new bidding participants by a factor of 3 within a span of 4 months following implementation. 

Measurement Method: Compare the processing speed for new bidding participants both before and after the integration of the system.

4. Communication Streamlining Metric: 

Success Criterion: Reduce communication-related errors by 25% during the initial six months of system deployment. 

Measurement Method: Analyze the incidence rate of communication errors reported by departments and transport companies before and after the introduction of the communication platform.

The project was divided into several distinct stages to ensure a structured and successful implementation. Each stage has specific deliverables aimed at achieving the project's overarching goals. The stages and their respective deliverables are as follows:

Objective: Understand project requirements, pain points, and user needs.
Deliverables:
Comprehensive analysis of current procurement and bidding processes.Detailed documentation of pain points and business goals.User stories representing different stakeholders' perspectives.Initial project plan and scope definition.

Objective: Develop and launch the core functionalities of the Bidding System.

Deliverables:

• Web-based Bidding Platform with user-friendly interfaces.
• Automated bid evaluation and comparison module.
• Vendor accreditation system for new participants.
• Real-time communication channels between departments and vendors.
• Reporting and analytics module for data insights.
• Functional MVP ready for deployment and utilization.

Objective: Establish a support framework for the deployed System.

Deliverables:

• User training materials and comprehensive documentation.
• Helpdesk and support infrastructure for user assistance.
• Troubleshooting guides and FAQs for common issues.
• Efficient ticketing system for issue tracking and resolution.
• User communication channels for support inquiries.

Objective: Integrate the Bidding System with existing systems and processes.

Deliverables:

• Integration with specified internal systems (1C Enterprise, SAP EWM, Custom ERP).
• Data synchronization and communication between platforms.
• Tested and validated integration components.

Objective: Continuously enhance and expand the Bidding System's capabilities.
Deliverables:

• Iterative development of new features based on user feedback.
• Additional modules or enhancements to meet evolving business needs.
• Periodic updates and improvements to ensure system efficiency.
• Ongoing user support and documentation updates.

• Meetings were conducted involving various departments and stakeholders.
• Four workshops were conducted, focusing on defining system boundaries, functional blocks, prioritization, and risk identification and management.
• Over 30 interviews were conducted with key stakeholders, including representatives from the transportation department, internal logistics, external logistics, IT department, architect and director of 1C development department, planning and analysis department, audit department, sales department, business process department, hub managers, freight forwarders, warehouse staff, representatives from transportation companies, and other involved employees.

• Current processes were observed to understand their functioning.
• Documentation was analyzed to gather insights into existing processes.
• Business process analysis was conducted to identify process improvements.
• Study of existing systems was undertaken to align with established practices.
• Warehouse visits were made to gain hands-on experience of operations.

Based on the collected information, a high-level Work Breakdown Structure (WBS) was meticulously developed. This WBS served as the foundational framework for delineating and detailing all functional blocks, modules, roles, and process algorithms within the system.