One major metropolitan school district has achieved dramatic efficiency gains and gained control over critical spend categories in the past year.
For years the district was saddled with an antiquated manual system to solicit, analyze and award bids for goods and services.
Picture mountains of paper on every desk and a full voice mail box with status inquiries from suppliers and stakeholders.
Virtually every bid was sealed and almost all required vast amounts of documentation to be accepted.
Here are two examples of the bid specifications:
- The transportation bid has hundreds of routes with detailed requirements including special needs for certain students
- Nutritional food labels must include the source of all ingredients for each consumable food item that is served in a cafeteria
The district management realized that there had to be a better way.
The first step was selecting an eSourcing tool for a pilot project to manage the transportation bid. One-on-one training with the initial user created the bid in just under two weeks. A one-hour onsite demonstration was held for all suppliers. Most suppliers welcomed the new online format because it was much easier and faster to submit bids. The bid was then launched.
Based on the success of the bid, food and facility supplies and services were targeted. An annual agreement was signed, and six additional users were added within the first 120 days. The primary goal was to automate all procurement efforts.
Below is a sample of the efficiency gains achieved in the first year:
- The tool allows for line item specifications that simplifies understanding for buyers and suppliers
- State requirements on the source of ingredients are satisfied by data captured in the system
- Any local municipal requirement can be attached at the item or group level
- Bids analytics are displayed by bids and supplier, greatly simplifying the award analysis
- Uniform bidding is maintained through constraints. For example: bids ranges can be specified for each item and bids will only be accepted within that range
- The history of all prior bids is now searchable, and the item/service can be added to new bids with one click
- Automated analysis provides ranking of bids on each item and designated grouping
- Reporting is customizable by user and automatically saved for future bids
- All or part of past bids can be saved as a template and used to initiate a new bid for the same or similar item/service including all customized reports
- A huge time saver is the ability to upload item/services data and specs from Excel with one click
- The value of spend through the system is growing each month providing increasing control and visibility for stakeholders and collaborators
- Each member of the procurement team is proficient in creating, launching and analyzing bids
The biggest benefit is that every team member is much more relaxed. They are confident that their efforts are helping to maintain a high level of service and cost control for each school. They no longer feel overwhelmed knowing they have a tool in place that is making their work life more rewarding.
This success story is specific to school districts, but most organizations could use the functionality to achieve similar efficiency gains.
If your company wants to dramatically enhance the efficiency of their procurement efforts, perhaps it is time for a chat.
In my experience, every organization has many opportunities that haven’t been investigated.
Ask better questions, make changes and 2020 will be your best year ever.
Action Step: If you are uncertain where to start the process of change, a procurement professional like myself can provide guidance and expertise to help your organization achieve the results you want.
If you want to go explore this topic in greater detail, please contact me. I invite you to request 30-minute discovery conversation. In my experience the next step will be apparent at the end of the call. I never assume that what I have to offer will be right for everyone, so don’t expect a sales pitch. You can reach me at (973) 718-7071 x875. The call will be forwarded to my mobile phone if I am not in my office which is pretty likely.
If you would like to know more ways to reduce costs without changing the way you do business, simply give me a call or send me an email with your contact information and the best time to reach you.
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Until Next Time, I Wish You Great Success in Your Business and in Your Life