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When a prominent western US university was looking to consolidate resources and save money, it faced a few hurdles. The biggest one was that departments had the discretion to select from several contract suppliers for janitorial and sanitation suppliers, which caused overspending and disjointed strategies when it came to janitorial purchasing.
This is a common problem for universities and higher education organizations whose procurement strategies are either non-existent or lack cohesion. The disorganization causes overspending and team members are often too overwhelmed to explore viable options for product cost reductions. That’s where category management in education procurement can produce greater efficiencies and savings, by implementing strategies at the root of the problem.
Category management is a strategy used to group similar types of goods and services to improve overall buying efficiency and reduce costs. By aggregating purchases within a particular category, colleges and universities can often achieve greater volume discounts and reduce work for procurement teams.
This is, in essence, the strategy that purchasing cooperatives employ on a larger scale. A cooperative purchasing organization combines spending across multiple organizations, representing bigger opportunities for suppliers who provide volume discounts and incentives. Group purchasing organizations employ specialists who have deep insights into product categories and up-to-date trends.
Category managers can be of significant help to higher education procurement and finance teams that seem to always be asked to do more with less. Depending on staffing, you may not have the resources for category expertise across every item on your procurement list. This can create even more work to source, solicit, and vet suppliers. An education-focused GPO can streamline this process and save you considerable time and money.
Category specialists form relationships with suppliers, so they often know what’s in the product development pipeline to help you find the right fit for your college or university. They also stay in touch with suppliers, so they can flag potential supply chain concerns before they cause problems for your school.
Category management strategies can also be a significant help when needs arise quickly. You may not have the in-house expertise to go deep into a category on your own or the time to do the research yourself for immediate needs.
For example, when changes to Title IX regulations required adjustments to policies and practices, E&I Cooperative Services anticipated the need and sourced suppliers who could provide training services, compliance audits, case management and adjudication, remediation, and Title IX support. Through competitively solicited agreements, E&I enabled its members to access a selection of trusted suppliers, simplifying the procurement process and ensuring institutions could effectively meet their compliance requirements.
Conducting a spend analysis can identify cost-saving opportunities within each category to:
Category management in education procurement builds specialized expertise in specific areas, so when the need arises, you have a solid foundation on which build. For example, with the shift to remote, hybrid, and online education, category expertise in learning management systems, license models for software, and integration requirements can play a pivotal role in making solid decisions for your school.
In the same way, someone who is immersed in procuring athletic equipment understands the current— and evolving—safety standards and certification requirements, expected product lifecycles, and replacement schedules to improve procurement and budgeting.
What is category management in higher ed procurement? It’s build on three key pillars: portfolio management, strategic sourcing, and supplier relationships.
Portfolio management involves managing your entire portfolio of goods and services across campuses. With an understanding of your spend, supplier base, and existing contracts, you can identify opportunities for consolidation, driving efficiencies and cost savings.
Strategic sourcing focuses on identifying, evaluating, and partnering with the best suppliers to meet your institution’s needs while securing the most competitive prices.
Supplier relationships are all about building strong, collaborative ties with your key suppliers. This fosters innovation and problem-solving, and encourages continuous improvement to ensure your institution’s long-term success.
E&I Cooperative Services is the only member-owned, nonprofit sourcing cooperative hat focuses solely on the education sector. By aggregating the purchasing power of more than 6,000 school districts, colleges, and universities, E&I can achieve significant volume discounts and more favorable terms with top-tier suppliers. A team of procurement professionals and experienced category specialists bring deep expertise to guide your sourcing decisions and to craft contracts that deliver exceptional value.
Contact E&I Cooperative Services today to talk about how you can improve category management.
