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Buyer Behaviour - VIU

Buyer Behaviour - VIU. Purchasing at VIU Constraints Opportunities Value Relationships. Pareto’s Principle. “80 – 20” rule Can focus on key items Spend less time on non-critical items. How Does the Purchasing Process Work at VIU?. Departments determine need for goods/services

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Buyer Behaviour - VIU

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  1. Buyer Behaviour - VIU • Purchasing at VIU • Constraints • Opportunities • Value • Relationships

  2. Pareto’s Principle • “80 – 20” rule • Can focus on key items • Spend less time on non-critical items

  3. How Does the Purchasing Process Work at VIU? • Departments determine need for goods/services • Contact Purchasing Dept. to discuss • Low-dollar value, non-contract item – proceed as desired • May need to involve Facilities Services, Health and Safety, IT, etc. • May need to request formal bids, or may simply require 3 quotes • Departments create requisition and obtain approval • Approved requisition comes to Purchasing • Purchasing issues Purchase Order

  4. Purchasing determines whether other depts. need to be involved, rigor in process required Dept determines need Contacts Purchasing Involvement of other depts required? Appropriate authority verifies Determine if policies are violated, H&S concerns? Purchasing issues Purchase Order Yes Req approved by appropriate person End user creates requisition No

  5. What Constraints do we Face? • Time • Budgets are released at the start of the fiscal year, but often, spending occurs at the start or end • Budgets • The budgets may be small in certain areas, so no matter how good a product looks, it may not be possible • Existing Contracts • We may have contracts in place that prohibit purchasing certain products from alternate sources

  6. More Constraints • Legislation and Trade Agreements • Agreement on Internal Trade (AIT) • Trade, Investment, and Labour Mobility Agreement (TILMA) • Carbon Neutral requirement from government • Auditing functions (CAMF) (Note that there are other trade agreements that affect other public sector bodies, but do not affect universities)

  7. What Opportunities are there for Sales Reps? • Low-dollar value products • Departments can “make their own deals” on low dollar value purchases, provided institutional policies or contracts are not in place • One-time vs. repeat purchases • P-Cards • Individuals are able to use a VIU purchasing card (Visa) for predetermined dollar amounts

  8. How Can You Create Opportunities? As a Marketer or Sales Rep: • Do your homework • Check websites, know who to contact (eg. Should you go to Purchasing Dept, or direct to end users?) • Determine if catalogues are beneficial (eg. Is there a “green” way to distribute material?) • Appropriate follow-up • Book appointments • Some sales reps will drop in at inconvenient times – this doesn’t help get them on the vendor list  • Be ethical • Many companies, particularly public bodies, do not accept invitations for lunch, golf, etc • Don’t ask for competitor pricing!

  9. Creating Opportunities Cont’d • Get on vendor lists • This is beneficial for routine purchases • Can be notified directly of large bid opportunities • If we don’t know about you, we can’t buy from you • Register to receive bid opportunities • Websites such as BC Bid will send you opportunities directly • Company websites may post some smaller opportunities • If you don’t register, visit the websites regularly

  10. What Is Viewed as Value? • Value is what the University is willing to pay for (service, delivery, etc) • Waste is anything that does not add value • Also have “necessary” – does not add value, but must be present (such as set-up or development) • “Overquality” is not necessary

  11. Offer Purchase Discounts • Come in a variety of forms • Quantity Discounts (EOQ) • Early payment discounts (eg. 2/10 net 30) • Advance payment, cash discounts • Are discounts worth it? • May be cheaper to buy large quantities, but may cost more in the long run (carrying cost)

  12. Expect Fair Treatment • Code of ethics • Transparent process • Encourage bidders • Keep your company off the front page of the paper! (eg. Gomery Commission)

  13. Public vs. Private • Public • Spending taxpayers’ money • Subject to scrutiny (FOI) • Must be available to everyone (AIT) • Private • Opportunity to earn bonuses • Not subject to AIT (can exclude certain bidders) • Must still comply with contract law

  14. Relationships • Suppliers • Mutually beneficial (they need to make $ to stay in business) • Treat suppliers well, they treat you well • Other departments • Accounts Payable (ensure suppliers get paid), Production, Shipping, etc. • Customers • Must consider the end-user (whether in-house or external)

  15. Questions?

  16. Thank You! Chris Munro, C.P.P. Purchasing Manager, Vancouver Island University • Chris.Munro@VIU.ca 250-740-6230 • http://www.viu.ca/purchasing/

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