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Elevating Procurement’s Role at Your Institution

Elevating Procurement’s Role at Your Institution. Chris Mihok Director Procurement Yale University. Yale University Profile FY 2012*. Undergraduate students* 5,322 Graduate and professional students* 6,526 International students* 2,072 Faculty* 3,953 Staff* 9,183

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Elevating Procurement’s Role at Your Institution

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  1. Elevating Procurement’s Role at Your Institution Chris Mihok Director Procurement Yale University

  2. Yale University Profile FY 2012* • Undergraduate students* 5,322 • Graduate and professional students* 6,526 • International students* 2,072 • Faculty* 3,953 • Staff* 9,183 • International scholars* 2,239 Annual Meeting April 7 - 10, 2013 Orlando, Florida

  3. Purchasing Organization

  4. Agenda • Understand the role of Procurement today • Challenge the ‘myths’ about Procurement • Prepare the organization • Promote the organization • Deliver as promised

  5. The Role of Procurement Today Questions for each school to answer • Are you viewed as tactical and non valued added? • Are you responsive to customer needs? • Are you a domain expert? • Are you Innovative? Visionary? Polished? Collaborative? • Are you viewed as an internal consultant or an order taker? • Are you overburdened with requisitions and other tasks which impact your ability to achieve higher value savings • When are you called by the department? At time of order or during their strategy formulation

  6. What are the ‘Myths’ about Procurement • You don’t know anything about this product , service or commodity • This is a very complicated or sensitive service • Procurement takes too long and can only derail the process • This is a great deal and Procurement could not do any better • The product is so unique you would be unable to add value • The quote is about to expire and I will forfeit my discount

  7. Debunk the Myths • Describe FOB and in-transit liability • Explain service level agreements to ensure availability • Have knowledge of capping the cost on consumables • Provide an acceptance process/criteria before payment • Illustrate an exit option if the product does not meet requirements • Provide a remedy for poor performance (i.e. cash, free services etc.) • Describe the University view to leverage other purchases • Identify a GPO where you could purchase this item for less • Offer prompt pay discount to reduce end user costs • Is the product so unique that the user underestimates its value

  8. Prepare the Organization • Identify training opportunities for your staff (free webinars, workshops) • Use web based services like Linked In to sign up for various supply chain groups • Review the research in non-traditional areas-(i.e. CAPS Research, NAEB, ISM) • Learn the language of your customers (legal-’matters’, HR ‘clients’) • Talk ‘value’ vs. lower price (risk reduction, Total Cost of Ownership, Value Levers) • Understand the existing culture or process • Consider professional certification for the staff • Consider a ‘pilot’ program or limit the scope of the initial activity

  9. Prepare the Organization (con’t) • Review your spend profile and offer opportunities to reduce tactical workload through: • Increase the number of contracts available to end users • Analyze your transactions and make recommendations to increase department buying authority based on a risk profile (80/20 rule) • Offer fact-based suggestions to increase bidding levels, approval levels, requirements for signatures • Evaluate GPO’s which can offer immediate value to your institution

  10. Promote the Organization Highlight Successes • We have streamlined the procure to pay process • Increased use of catalogs, purchasing on vendor websites, increase electronic invoicing • We provide year over year cost savings • Offer examples of success stories with other units • We have an ‘institutional’ view • Another department is purchasing a similar item • We deliver value • Not always price savings but service levels, turn around time, extended warranties etc.

  11. Promote the Organization Increase Your Visibility on Campus • Participate in your Sustainability Committee, Business Continuity Team, Chair the United Way campaign • Organize the summer picnic or annual holiday party • Be a speaker at a professional society (NAEP, ISM etc) • Host a regional or local meeting of purchasing professionals at your school • Collaborative with another school • Collaborative with a local hospital • Sponsor a ‘vendor’ show for your faculty • Support ‘town vs. gown’ functions • Promote a small business fair for your suppliers

  12. Deliver as Promised How to be Successful ‘you don’t get a second chance to make a good first impression’ • Identify a new commodity area with a lower risk profile (consulting vs. benefits) • Ensure the Purchasing Lead has behind the scenes support • Consider embedding the staff member with the department, initially • ‘Dry run’ presentations so that you are not providing ‘data’ but actionable ‘information’ • Get feedback from customer on their perceptions of the process • Listen to your customer

  13. Summary • Understand your role at the institution • Prepare the staff • Challenge the myths • Promote the organization • Start small but deliver large • ‘you don’t get a second chance to make a good first impression’

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