Menu
With today’s rising prices and emphasis on cost reduction amid budget constraints, schools are looking for more efficient ways to manage all types of procurement activities. Once seen as more of an administrative function, procurement teams are now regarded as a valuable asset within institutions to help optimize spending and control costs.
A key to success is smarter sourcing. Here are some of the practices leading procurement teams are deploying.
To improve your sourcing and realize cost efficiencies, you need to understand your spending. Break down expenditures by department, category, and supplier.
Data analytics can provide insights into spending patterns and areas with potential improvement, pinpointing areas of waste or inefficiency. Detailed spend analysis and cost profiling are essential first steps to reveal areas where alternate sourcing can yield the greatest results. This helps you prioritize.
Strategic spend assessments (SSAs) can help across all types of procurement by analyzing current contracts with industry standards. For example, E&I Cooperative Services® members can leverage SSAs to get a comprehensive look at how their contracts align with E&I’s cooperative contracts to uncover potential cost savings.
It can be challenging, given transaction volume, but improving sourcing means always looking for alternative suppliers and not defaulting to those already in your procurement system. New vendors entering the market may be more aggressive on pricing, trying to earn your business.
You may also benefit from consolidating suppliers to create bigger discounts and reduce the workload.
E&I makes it easy to source new suppliers. With more than 150 ready-to-use, competitively solicited contracts, you can review potential suppliers quickly. E&I also helps educational institutions fulfill their commitments to sustainability and diversity. A large number of E&I’s contracts are from certified Tier 1 diverse suppliers.
A smart sourcing strategy looks at total value, rather than just the lowest price. Factors like quality, reliability, on-time delivery, service, and follow-up should all be part of the equation. A cheap solution is only acceptable if you get exactly what you need. If you have to spend time chasing down orders, dealing with warranty claims, or spending time making sure suppliers live up to their agreements, you are losing time and money.
Develop detailed requirements and specifications before requesting supplier bids. This includes expected volumes, service levels, performance metrics, timelines, and reporting needs. The more precise your requirements, the better suppliers can tailor proposals and pricing models.
Clear requirements set expectations and standards for sourcing.
However, you should always be open to discussions with suppliers, especially when working with new vendors. Initial discussions can help create more precise proposal requests.
Create standardized purchasing policies, procedures, and best practices across your organization. Even if actual purchasing happens at the campus or department level, this ensures consistent application of policies regardless of who orders a product.
Make sure you have the appropriate approvals in place and mechanisms for alerting for non-compliant spending. Providing an easy-to-access list and punchouts for approved vendors can significantly streamline the purchasing process.
E&I also offers a no-cost eProcurement solution that is custom-built for educational institutions.
Explore utilizing cooperative purchasing agreements to improve your bargaining power and get better pricing. While group buying does not guarantee quality, it can produce significant cost savings and efficiency.
For example, E&I leverages the bulk buying power of its 6,000 member institutions. With a sole focus on education, E&I has deep relationships with a wide variety of suppliers across nearly every procurement category. This unrivaled purchasing power often creates deep discounts among suppliers. Members can view contracts and compare them to their pricing, products and services. These competitively solicitted contracts can provide you with considerable time and cost savings, but there is no obligation to use these contracts.
Through contract portfolio and strategic solutions, E&I helps educational procurement teams make more informed, data-driven decisions to capture more spend and optimize their educational dollars. There is no cost to become a member, and members often qualify for exclusive incentives and rebates from select suppliers.
For more tips on smart sourcing and improving your procurement system, contact the experts at E&I Cooperative Services today.
