UO Strategic Purchasing

UO Strategic Purchasing

Alex CardinauxEileen ColeJohn Inglish

Douglas ParkAmanda Smith

Lauren Townsend

What is Strategic Purchasing?

“Strategic purchasing is the concept that through planning, scheduling, and group buying, the institution is able to

obtain significant cost savings.”

Sponsored by UO Purchasing & Contracting

Our Task

O Research one or more of the following concepts: How to facilitate greater group purchasing on campus. Whether centralized purchasing could provide greater benefit. Better data sources for collecting, analyzing, and reporting on

purchasing activities to support strategic analysis.

O Based on the research above, recommend specific methods to increase strategic purchasing on campus.

O Assess direct cost savings, administrative costs, as well as any other cost or benefit information you deem appropriate.

What are the Suggested Strategic Purchasing opportunities at UO?

O Copiers

O Computers

O Office Supplies

O Paper

Paper Purchasing at UO

Past PresentO CentralizedO Paper was purchased by

Printing & Mailing and distributed to departments.

O (1) .50 FTE employee = $18,283/year not including OPE

O Storage = $19,080 - $25,440/year

O DecentralizedO Paper is purchased by each

department separately.O Paper is delivered to and

stored by each department separately.

Comparison to OtherPAC-12 Schools

O Arizona - Centralized Common supplies stored

in inventory on campus, called UA Stores, and can be delivered or picked up.

4 staff members O Arizona State –

DecentralizedO Cal – DecentralizedO Colorado – DecentralizedO UCLA – DecentralizedO USC – Decentralized

O Utah - Centralized Common supplies stored

in inventory on campus, called General Stores, and can be delivered the next business day.

18 staff members O Oregon State –

DecentralizedO Stanford – DecentralizedO Washington – DecentralizedO Washington State –

Decentralized

Comparison to OtherOUS Institutions

O Eastern Oregon University – Decentralized

O Oregon Institute of Technology – Centralized

O Oregon State – Decentralized

O Portland State – Decentralized

O Southern Oregon – Decentralized

O Western Oregon University– Decentralized

Top 3 Paper VendorsO WestCoast Paper

Used almost exclusively by Printing & Mailing.

O Office Max Most used vendor by departments.

O Unisource Used almost exclusively by the School

of Law.

Paper Purchasing Trend

2010 2011 2012$100,000$110,000$120,000$130,000$140,000$150,000$160,000

Total Paper Purchased

All VendorsTop Vendors

Cost Comparison Between Top Vendors

OfficeMax Unisource OfficeMax Vs. Unisource

Retail (Carton) $43.99/carton $49.99/carton $6.00/carton

UO Rate (Carton)

$26.92/carton $44.29/carton $17.37/carton

Truckload (880 cartons)

$26.47/carton $35.00/carton $8.53/carton

Bulk Purchasing OptionsO Truckload = 880 cartons

O Pallets would be dropped off at one central location.

O Paper would be delivered to departments by a designated employee.

Unisource = $35.00/cartonSavings of $9.29/carton. No savings over

OfficeMax.

OfficeMax = $26.47/cartonSavings of $0.45/carton

Bulk Purchasing Options

Pros Cons

O Cost Savings (OfficeMax) = $398/truckload.

O Due to paper being stored on-site, departments would get same-day delivery.

O Minimal cost savings.O Pallets would be dropped off

in one location only.O Paper would be stored on

campus, using valuable square footage.

O Pallets would need to be unloaded by UO employees.

O Would require at least (1) .50 FTE employee to deliver paper to departments.

O Would require additional staff FTE to manage stock and delivery logistics.

O Potential damage to paper stock while in storage.

RecommendationsO Any departments that are not purchasing

off of the state contract with OfficeMax should do an analysis of their current vendor versus OfficeMax, as there is the potential of cost savings.

O Data is not easily accessible and is difficult to interpret due to the coding inconsistencies between departments. We recommend further training for employees inputting information into Banner on the importance of commodity codes.

ConclusionO With our decreasing trend in paper

purchasing, combined with the limited cost savings, centralized paper purchasing does not appear to be sustainable at this time.

O Strategic purchasing initiatives need to take into account all factors, including both cost and sustainability. Sometimes, the cost savings are not high enough to make up for the loss in productivity.

Questions?