Changes in Purchasing From Contract Savings Plan Result in Additional Annual Savings for SMU
Over the last two years, SMU’s Purchasing Department has been charged with saving the University millions of dollars. To date, purchasing initiatives have contributed $5.86 million in annual savings, $1.7 million of which came from the Contract Savings Plan, and the Purchasing Department is working diligently to keep that number growing.
“After final campus-wide budget changes to meet savings goals at the conclusion of the OE2C project, our commitment in Purchasing was to make sure University-wide contracts were in place to help departments realize budgetary savings and to continue to find new sources of savings,” said Shannon Brown, SMU’s Director of Purchasing. “The Purchasing Department sees our job as providing resources to help all departments stay within their budgets.”
The savings come from a variety of areas including printing, promotional items and event services. As different as each purchasing category is, the process for identifying savings is the same. “First we look across campus to see where expenditures are occurring in a particular category,” said Brown. “The primary vendors are identified, and specific products and services are classified. Information from invoices provides a lot of detail that helps bring the spending pattern into focus.
“Once we see some common expenses, we put together a price sheet to be able to include in our bidding process with potential vendors. A committee of frequent purchasers in that particular category reviews responses from the vendors interested in establishing a campus-wide contract and makes decisions about exclusive contracts that lock in consistent savings for the SMU community.”
In many cases, the resulting contracts include vendors who have been doing business with various parts of the University in the past. In other instances, the process brings new vendors to campus who offer specialty services that best fit the needs of campus departments.
The structure of the Purchasing Department has also changed to help manage the ongoing savings identification. “Our buyers have become category managers with more in-depth knowledge about specific areas,” said Brown. “So when Cathy Heckman is working with a group on a print project, she can help the group understand the options between the full-service printer and the print-ready printer and find ways to save money. The category managers are trying to get people comfortable with that process.”
Occasionally a campus department will purchase from a vendor that is not a part of SMU’s exclusive contracts. To address these issues, Brown said, “We contact the department and let them know we have another company available, and suggest they get a quote from that vendor. Usually that process results in the department saving money. Recently, using one of the event rental exclusive providers delivered $1,200 in savings for just one event on campus. In other cases, Purchasing may quickly reach out to our vendors ourselves to get pricing to offer to the campus department as an alternative to help them with their budget management. The goal is to offer something that is better – whether better means less expensive, better service or a better long-term solution – and that’s what we should be offering.”
The work to identify additional savings in purchasing continues. “Upcoming initiatives include on-campus printing, mailing and shipping. We will also be reviewing our travel management to see if more savings are available, now that we have some consistent baseline data from Concur to share with vendors. We will also work with HR on choosing the vendor that will handle the Employee Recognition Program” said Brown.
If you have additional ideas about ways in which SMU could save money, please submit your ideas here.