You'd Better Shop Around
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On every campus, procurement and purchasing
staff are expected to find the best products and services
at the optimum price. But if the list of suppliers is
outdated, meeting this goal may be a challenge. Taking some basic
steps to add new vendors to the pool will take the struggle out of
this process. In fact, such measures may be seen as an imperative.
“Having a process to investigate and potentially approve new
sources of supply is critical to the health of an organization’s supply
chain,” says Ralph Maier, vice president at E&I Consulting Group.
“With ever-changing business requirements, it’s vital to determine
if there are new products and services out in the market that may
enhance your organization and the high-quality suppliers to provide
them to you and your internal customers.” He says that since the supplier
community is routinely the best source of innovation and process
improvements, engaging them in ongoing discussions is critical.
Such measures work best when they grow out of strategic
planning, according to Elizabeth Moss, director of procurement
at Howard Community College in Columbia, MD. She notes that
in some instances, situations arise that require an immediate
response, but there is insufficient time to properly research the
available products in the marketplace and ensure that what is being
purchased is the best fit and the best value for the institution.
At the same time, suppliers are also more likely to take advantage
of the institution by supplying goods that are unnecessary
or do not offer the best value.
“Strategic planning in advance provides the space and time
to effectively research the available options in the marketplace,
ensure the buy-in from the proper approving authority, and establish a collaborative relationship with the supplier,” she says.
“Having all of these factors in place increases the likelihood of
successful outcomes.”
Cory L. Harms, interim director of purchasing at Iowa State
University, says identifying new vendors increases competition
while expanding options for the campus community.
“We need to ensure that we are looking for vendors that may offer
the most recent technology, enhancements or capabilities and allow
our campus clients to have the best possible choices when looking for
supplies or equipment that could be either routine or unique,” he says.
Expanding Options
When a need is identified but it’s difficult to quantify the potential
amount that will be spent with a supplier, a helpful strategy is
to establish an indefinite delivery/indefinite quantity contract and
consider whether it is appropriate to award to multiple suppliers,
Moss advises.
“This allows the institution to start to track their needs and
provides an opportunity for suppliers to establish a relationship
with the institution,” she says. “Institutions should also utilize
cooperative contracts that have been established to learn about
new firms and see how they perform.”
Harms recommends developing an ongoing vendor orientation
or on-boarding process.
“This is valuable to not only educate vendors on the best way
to do business with your entity, but also to invite vendors that
you may not be currently doing business with to come and meet
your procurement agents to provide background on their offerings,”
he says.
At Iowa State, staff participate in a variety of other outreach
efforts to identify new sources of supply. These include conferences
that have vendor shows, small business events and specialized
vendor shows for technology, science, furniture and travel.
“All of these sources provide us an opportunity to meet new and
established vendors that may be able to serve our university,”
Harms says.
He adds that a robust vendor outreach program can be a great
asset in many ways.
“We’ve found many new sources of suppliers for goods and
services, from tortillas for our dining operation to specialized
translators,” he says. Over the past eight years, his department has
provided a vendor orientation that attracts about 20 companies
each month. Attendees often pass the information on to other
vendors who then begin attending.
“This is one of our most valuable sources for meeting prospective
vendors,” he says.
Moss notes that it’s also important to check references of new
firms, particularly other institutional references.
“Higher education is a unique environment with a number of
regulatory requirements,” she says. “Firms that have experience working in the higher education arena should require less handholding
in adapting to the campus requirements.”
She adds that if the supplier is going to be providing a high
volume of products, the financial stability of the firm should also
be reviewed. A key question to explore: Is the firm large enough to
handle the business from your institution and meet the expectations
in a timely manner?
Bidding and More
While bidding procedures can be unwieldy, Harms points out a
number of pluses.
“The bid process can be very effective and is not as time consuming
as people think,” he says. “Many bids can be completed
in weeks rather than months, and can be expedited when necessary
while still maintaining fairness and garnering competition.”
He notes that the process frequently reveals options that
the requestor did not know of, and may bring savings in addition
to what a department or unit has already negotiated. Often, the
simple fact that the procurement office is involved will prompt
vendors to sharpen their offer.
In managing the bidding process, it is imperative that sourcing
professionals use all of the available tools in their purchasing
toolbox, Maier says.
“Use of reverse auction technology is a game changer,” he says.
“This technology significantly ramps up your bidding capability,
results in higher quality RFPs, openings for new suppliers and drives
completive pricing pressure like no other sourcing tool in the market.”
Just as with other vital functions, purchasing can be most effective
when advance planning is complemented by a continuous
improvement approach.
“Think about purchases from a strategic focus,” Moss says.
“Firms are not usually just providing goods anymore. What
services can they provide and how do these services supplement
the work being performed by employees at the institution?” It’s
important to focus on the best value for the institution and not just
the lowest price, she adds.
PURCHASING CONSORTIA BRING EFFICIENCY
A number of colleges and universities have found that joining
forces with other institutions brings efficiencies to the purchasing
process. Just a few examples:
The Inter-University Council Purchasing Group of Ohio (www.iucpg.com), frequently called the IUC-PG, has 88 members made up of the
state’s 14 state universities, 15 community colleges, 8 technical colleges
and 51 private educational institutions.
The Big Ten Academic Alliance (www.btaa.org) includes purchasing advantages
for the University of Illinois, Indiana University, University of
Iowa, University of Maryland, University of Michigan, Michigan State
University, University of Minnesota, University of Nebraska-Lincoln
Northwestern University, The Ohio State University, Pennsylvania
State University, Purdue University, Rutgers University and the University
of Wisconsin-Madison.
The recently formed Higher Education Systems & Services Consortium,
or HESS Consortium (hessconsortium.org), focuses on administrative
systems and services for 83 private institutions.
This article originally appeared in the issue of .