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There are two truths facing educational institutions when it comes to procurement. Costs have increased for nearly every category of goods and services. At the same time, there are significant budgetary constraints, resulting in renewed efforts to reduce expenditures.
Procurement teams are on the front lines of maximizing value and ensuring dollars are spent wisely, which has only become more challenging with rising prices.
While the rate of inflation is easing slightly, the Federal Reserve still forecasts inflation to be above historical averages through 2033. The cumulative effect of inflation on procurement activities cannot be underestimated. For educational institutions, this can create significant challenges, including:
In inflationary times, procurement planning and budget forecasting become more critical than ever to ensure a consistent flow of goods and services necessary to keep things running smoothly and meet objectives.
As procurement teams look for creative ways to maximize value and keep costs under control, an educational purchasing cooperative can help.
The most obvious way is by working with suppliers for the goods and services needed while negotiating more favorable pricing and terms. By pooling purchasing volumes across multiple educational facilities in a cooperative, this collected bargaining power produces cost savings. For example, E&I Cooperative Services aggregates the bulk buying power of its 6,000 member institutions to negotiate more favorable rates and terms.
Purchasing cooperatives offer pre-negotiated contracts with various suppliers. Competitively solicited, some of these contracts with top manufacturers and suppliers can save time and effort compared to individual negotiations. With the increased pressure on procurement teams to keep costs under control, ready-to-use contracts with best-in-class pricing can streamline the workload and reduce expenses.
Working with a purchasing cooperative will reduce administrative costs associated with sourcing and negotiating individual contracts.
Contracts are negotiated to comply with applicable industry regulations and policies. This helps mitigate both legal and financial risks. E&I Cooperative Services is the only member-owned non-profit sourcing cooperative that works exclusively in the education sector. E&I’s competitively solicited contracts reflect best practices while meeting unique needs of member institutions.
Because purchasing cooperatives work with top suppliers across a wide variety of goods and services, members have access to a greater selection of options. This can produce potential cost savings in multiple areas while providing baselines for negotiating costs with other suppliers.
Purchasing cooperatives have dedicated procurement teams and subject matter experts who can offer guidance, best practices, and support to member institutions. E&I Cooperative Services has a team of procurement professionals, many of whom have led procurement efforts at major colleges and universities. This shared knowledge and expertise can help optimize procurement processes and make more cost-efficient decisions.
E&I’s members are procurement leaders in the education sector, working together to share best practices and overcome common challenges.
Another area where some purchasing cooperatives can help is by doing a deep dive into spending and comparing it to pre-negotiated contracts to look for opportunities to reduce costs. For example, E&I Cooperative Services conducts no-cost Strategic Spend Assessments (SSAs) for members. These assessments reflect a consultative approach to evaluating your contract spending. The Cooperative’s spend analysts evaluate high-level spending data and provide a custom report to indicate areas for potential savings.
Member institutions can see where aligning contract portfolios, switching suppliers, or consolidating spending can save money. You also get a strategic roadmap for future alignment opportunities.
There is no cost to join E&I Cooperative Services, no obligation to use cooperative contracts, and no spending minimums.
E&I members can take advantage of additional time and cost savings. Some suppliers offer exclusive incentives or rebates to members. Members are also eligible for patronage refunds based on spending volume throughout the year. E&I returned $6.32 million in patronage refunds to members in the form of cash and certificates of equity in 2023.
Despite inflationary pricing, a purchasing cooperative can help you save money and meet your needs to maximize value. Learn more today about the benefits of membership at E&I Cooperative Services.
