The overall objective of the assignment is to provide marketing support to the development of up to nine (9) pilot group purchasing organizations (hereinafter referred to as the “GPOs”) with selected partner BMOs (Ivano-Frankivsk Chamber of Commerce and Industry, Kharkiv Chamber of Commerce and Industry, Odesa Regional Chamber of Commerce and Industry, Sumy Chamber of Commerce and Industry, Association of Industrial Automation Enterprises of Ukraine, Organic Ukraine, Western Ukrainian Fashion Industry Cluster, Private Employers Association in Kharkiv, Vinnytsia Regional Organization “Union of Entrepreneurs “Stina”), ensure monitoring the results, document experience and lessons learned and share it with all 27 partner BMOs.
Establishment of GPOs should be done with agile and systemic approach and taking into account recommendations provided by the “Kupuimo Razom!” project experts (Kupuimo Raizom Guide for Consultants). The Consultant is expected to coordinate with and engage numerous stakeholders, using the methods that would allow rapid and effective roll out of the GPO.
The following general principles should be regarded for GPOs creation:
- Interests of all stakeholders (members of the GPO and suppliers) must be considered to ensure their voluntary commitment to the project.
- All members of the GPOs should have clear and transparent information on the benefits they receive from participating in the GPO, on their role and responsibilities.
- The process should be organized with order and formality to allow balancing between the interests of individual entrepreneurs and the whole group for achievement of the common goal.
- The GPO should be promptly created as a minimum viable product (MVP), engaging early adopters among members and suppliers, to allow for testing initial hypotheses in real market conditions. At the same time, there should be a staged plan developed with a clear vision on how the GPO may potentially evolve and grow.
3. DESCRIPTION OF RESPONSIBILITIES / SCOPE OF WORK
Under the direct supervision of the Project Manager and in close cooperation with the Project Team, the Consultant will perform the below activities focusing on the achievement of the mentioned objectives. The Consultant is expected to work in close collaboration with the Project Team.
3.1. Review the background documents provided by UNDP and “Kupuimo Razom” project to obtain a better understanding of the goals and context, and develop a detailed work plan, consisting of activities, key stages of assignment implementation, and detailed timeline of work with fixed deadlines.
3.2. Facilitate at least one (1) peer-to-peer webinar with partner BMOs to discuss existing cases and practices of creating GPOs in Ukraine (cases will be advised and speakers proposed by UNDP), lessons learned and planned approach to development and launch of the purchasing groups within this assignment with a schedule of works. The webinar is expected to be organized virtually (online).
3.3. Organize individual meetings with each of up to nine (9) partner BMOs to familiarize with their operation, assess the state-of-play, priorities, and expectations from the GPOs, estimated interest among member MSMEs and feedback on commitment of the BMO to be significantly engaged into the initiative, availability of human and other resources, and other key issues relevant to the assignment and required to inform further actions.
3.4. Assess economic potential for each GPO (up to 9), including:
- Identify MSMEs - potential members of the GPO, their needs, expectations on specific benefits, engagement into GPO operation and distribution of results. Facilitate relevant working group meetings with partner BMOs and potential members of the pilot GPOs.
- Assess information received from BMOs and their members, identify and discuss with BMOs specific products or services that can be potentially procured through the pilot GPO.
- Identify potential volume of procurement for specific products or services.
- Conduct realistic assessment of GPOs purchasing power, determine the break-even point and estimate expected profitability of each of the purchasing groups.
- Evaluate economic potential these specific products or services, taking into account standardization of products, profit margin, minimal order quantity, delivery terms, aftersales service etc.
- Estimate potential financial benefits for group members both from reduction of additional costs as a result of concentration of purchases and increase in turnover, as well as from lower purchase prices as a result of concentration.
- Identify potential additional benefits and their financial value, including but not limited to: payment conditions (differed payments, installments), access to information, specialized training and learning materials that may provide GPO members with an additional competitive advantage, access to new benefit and service levels, optimization of logistic and transport, etc.
- Identify potential benefits from the GPO for the customers of the GPO members.
3.6. Collate and assess information received from up to nine (9) BMOs and their member MSMEs. Where needed and in order to fill in the gaps, contact the partner BMOs for additional clarifications. Compile concise and accurate profile for each GPO to be launched (up to 3 pages each, A4, 11pts), including (but not limited to): potential members of the GPO, specific products or services that will be procured through the GPO, potential volume of procurement, estimated purchasing power of the group, economic potential for selected services or products, potential financial benefits for group members and their customers, potential additional non-financial benefits and their financial value.
3.7. In consultation with each BMO, define most prospective suppliers for each GPO. The Consultant must ensure, if possible, that GPOs will not be dependent on one supplier and will be able to expand both the assortment and delivery terms for products or services.
3.8. Conduct preliminary supplier analysis for each of the GPOs, including:
- Identify potential suppliers for the GPOs, their needs, values, expectations for benefits.
- Identify potential benefits and their financial value, including but not limited to: increase in sales, decrease in costs to acquire customers, decrease in logistic costs, etc.
- Estimate potential financial benefits for the supplier due to both effect of increase in sales volumes on the profit margin and changes in sales prices on the profit margin.
- Identify potential competition of the GPO with existing distributors or other market actors that may disrupt operation.
3.9. Develop value proposition for potential GPOs’ suppliers, including:
- Financial benefits for the supplier due to both effect of increase in sales volumes on the profit margin and changes in sales prices on the profit margin.
- Vision for partnership in the development of the market.
- Prospects to increase operational effectiveness and address specific needs/pains of the supplier.
3.10. Upon situational and supplier analysis, in coordination with UNDP project team, identify the best operational model for GPOs individually for each of the partner BMOs (agent or wholesaler - refer for details to p.60 of the Kupuimo Raizom Guide for Consultants: https://kupuimorazom.org.ua/?p=3563). Support UNDP project team with organizing meetings with partner BMOs to provide advice and clarify the specifics of the selected model and receive commitment to move forward using specific model. Support, if necessary, consultations of each partner BMOs on the development of GPO management rules and procedures, templates or drafts of cooperation agreements.
3.11. Prepare informational package for negotiation with suppliers for each GPO and present it to each BMO, including general presentation (up to 10 slides), GPO composition with evaluation of the purchasing power and potential. The presentation must include the following information (but not limited to): idea of the GPO, benefits for the supplier, functions of the GPO, who are the GPO members, expectations of GPO members, procedures, action points, contact information.
3.12. Analyse the outcomes and prepare final technical report, including nine (9) briefs to capture the outcomes for each facilitated GPO (up to 40 pages, A4, 11pts). The report shall be prepared in Ukrainian.
The final structure and content of the briefs shall be agreed with UNDP and consist of the following tentative sections (not limited to): abbreviations and terminology, description of results and recommendations for further action (outcomes per each BMO), lessons learned, recommendations to UNDP on prospective of the pilot initiatives, a staged plan with a clear vision on how each GPO may potentially evolve and grow, needed further support for development and/or scale up.
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Deadline for submission is 28-Sep-21 (Midnight New York, USA)