Strategically Impacting the Institution's Bottom Line Presented by: Ralph Maier Director of Purchasing - PowerPoint PPT Presentation

Loading...

PPT – Strategically Impacting the Institution's Bottom Line Presented by: Ralph Maier Director of Purchasing PowerPoint presentation | free to view - id: 7dc05-M2Q0Z



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

Strategically Impacting the Institution's Bottom Line Presented by: Ralph Maier Director of Purchasing

Description:

– PowerPoint PPT presentation

Number of Views:44
Avg rating:3.0/5.0
Slides: 21
Provided by: purchasi
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Strategically Impacting the Institution's Bottom Line Presented by: Ralph Maier Director of Purchasing


1
Strategically Impacting the Institution's
Bottom Line Presented by Ralph
Maier Director of Purchasing
  • eProcurement at the University of Pennsylvania

2
Presentation Agenda
  • About Procurement at Penn
  • eProcurement Business Objectives
  • Purchasing Fleet Fuel Card
  • Delegated Requisitioning
  • Oracle Financials
  • Requisitioning Workflow
  • The Penn Marketplace
  • Benefits of Online Content
  • Supplier Enablement
  • Document Management
  • Electronic Sourcing
  • Impact on Key Stakeholders
  • Key Accomplishments
  • Critical Success Factors
  • Contact Related Information

3
About Procurement at Penn
  • Decentralized point-of-demand purchasing
    environment with purchasing authority,
    responsibility accountability delegated to
    authorized faculty staff in offices labs
  • Campus-wide utilization of Oracle Financials
    (Purchasing, Payables General Ledger)
  • Purchasing/Fleet Fuel Travel Management Credit
    Card Programs
  • Online shopping through the Penn Marketplace
    hosted by SciQuest Incorporated
  • Annual purchasing department operating budget of
    1M
  • Annual purchasing activity
  • - 300,000 purchase transactions
  • - 675M in purchasing spend

4
eProcurement Business Objectives
  • Provide a seamless online purchase-to-pay
    process that meets business requirements of
    customers, suppliers administrative offices
  • Reduce time effort related to purchasing
    payment activities enabling faculty staff to
    focus on core competencies
  • Ensure compliance with financials policies,
    increase adoption utilization of approved
    buying methods key supplier business
    relationships
  • Utilize purchasing data to leverage the
    Universitys buying power supplier base to
    reduce costs
  • Facilitate efficient, timely payment of invoices

5
Purchasing Fleet Card Program
  • Initial distributed business process initiative
    designed to change culture across campus
  • Distribution of authority, responsibility
    accountability to campus community was initially
    perceived as central administration shifting
    workload
  • Authorized cardholders quickly realized benefits
    of empowerment self-service procurement
  • Opportunity for Schools Centers to begin
    restructuring administrative offices
  • Reduction in transaction volume enabled
    Purchasing Services Accounts Payable to
    restructure focus on core competencies
  • Program was ultimately viewed as a success by
    central administration the Schools Centers

6
Delegated Requisitioning
  • Automate requisition creation, funds management,
    document routing, final order approval invoice
    payment processes
  • Integrate regulatory capital equipment
    requirements in the workflow
  • Utilize technology to enforce compliance with
    policies procedures
  • Provide online access to supplier products
    services
  • Automate delivery of documents within the
    institution to from suppliers
  • Integrate invoice approval processing into
    online system
  • Document PO invoice work history approvals
    for tracking auditing purposes

7
Oracle Financials
  • Campus-wide implementation of Oracle Financials
    in July 1996
  • Delegated shopping and requisition creation to
    the point-of-demand in labs offices
  • System user responsibilities include
    Requisitioner for shopping requisition
    creation only PO Manager for requisition
    creation final order approval for transaction
    lt5,000
  • Introduced access to self-hosted online supplier
    catalog content
  • Approximately 1,800 purchasing system users

8
Requisitioning Workflow
  • Oracle Financials workflow used to route
    transactions facilitate final PO approval by
    authorized users
  • Online purchasing system facilitates real-time
    budget account validation, funds checking
    property management requirements
  • Regulatory requirements are enforced for
    hazardous radioactive materials
  • Laboratory animal purchases are processed via the
    Purchasing Card Program
  • Purchasing data order action history available
    for review audit
  • Electronic order distribution to suppliers via
    Electronic Data Interchange (EDI) eDocument
    auto-fax server

9
The Penn Marketplace
  • The Penn Marketplace, Penns private supplier
    exchange, was launched in January 2002
  • Replaced self hosted catalog content business
    model implemented with Oracle Financials
  • Third party content management solution hosted by
    SciQuest Incorporated since January 2004
  • Marketplace supports hosted catalog content is
    the platform for punchout to Penn specific
    supplier web sites
  • Provides opportunity for inclusion of diversity
    suppliers
  • Approximately 5M of the most commonly ordered
    products services are available from 116 Penn
    preferred contract suppliers (as of March 1,
    2005)
  • Penn specific contract pricing for hosted content
    Penn specific supplier web sites

10
Benefits of Online Content
  • Online supplier catalog content is a critical
    success factor
  • Access to online catalog content enhances
    shopping experience for authorized users
    reduces effort
  • Promotes adoption utilization of participating
    preferred contract suppliers
  • Order creation from online content ensures clean
    purchasing data resulting in a reduction in
    rework invoice payment problems
  • Viewed as competitive advantage by participation
    suppliers
  • Supplier enablement is an opportunity to leverage
    the competitive advantage for significant cost
    savings

11
Supplier Enablement
  • 116 suppliers available in the Penn Marketplace
  • Penn Marketplace suppliers received 65 of all
    purchase order transactions in 2004 (gt26,000
    suppliers in the approved supplier database)
  • YTD marketplace supplier transaction volume is
    67 of all purchase order transactions
  • Over 240 approved suppliers deactivated and
    market share shifted to marketplace participating
    suppliers
  • Suppliers are now approaching purchasing for
    enablement in response to pressure from customers
  • Goal of 130 marketplace suppliers by end of 2005
  • Supplier enablement savings of 7.4M since 2001

12
Document Management
  • PO supporting documentation, competitive bids or
    bid waiver information, instructions to approver
    suppliers are transmitted electronically as
    attachments or in Notes To fields in online
    purchasing system
  • All POs are transmitted electronically to
    suppliers via Electronic Data Interchange (EDI)
    or eDocument auto-fax (Global Exchange Services
    Captaris Incorporated)
  • EDI used for inbound supplier invoices (41 in
    2004)
  • Document imaging system used for invoice
    management approval workflow (170 Systems)
  • Replacing checks with electronic payment is
    CY2005 business objective

13
Electronic Sourcing
  • Reverse auction or online bidding automates
    existing competitive bidding business process
  • Creates increased competition due to opportunity
    to bid on requirements instead of submitting
    single offer
  • Results in higher quality events due to need to
    develop clear concise product service
    requirements
  • Can be used for institution specific requirements
    collaborative buying opportunities
  • Used at Penn for office supplies, copiers fax
    equipment, copier paper, air filters, window
    washing services cylinder gas
  • Pilot program consisted of 6 events for 10.1M of
    purchase volume yielded 1st year cost savings of
    2.8M

14
Impact on Purchasing Services
  • Campus-wide adoption utilization of
    eProcurement technologies at Penn has resulted
    in
  • - transition from tactical to strategic
    purchasing
  • - change in customer management perception
    from necessary bureaucracy to value added
    service provider
  • - reallocation of resources resulting in
    initial downsizing but enhanced
    professional purchasing opportunities for
    new staff
  • - proactive involvement with customers,
    management, external professional
    purchasing organizations
  • - increased job satisfaction staff
    compensation
  • - recognition as one of the leading purchasing
    organizations in higher education

15
Impact on Faculty Staff
  • Campus-wide adoption utilization of
    eProcurement technologies at Penn has resulted
    in
  • - an easy, efficient user friendly purchasing
    process
  • - less time effort required to purchase
    products services
  • - more time to devote to core competencies such
    as research education
  • - suppliers delivering products when required
  • - availability of purchasing staff to assist
    with complex high dollar volume requirements
  • - increased buying power for every dollar of
    funding
  • - increased support from key strategic
    suppliers
  • - key supplier collaborative initiatives
    shared opportunities

16
Impact on Strategic Suppliers
  • Campus-wide adoption utilization of
    eProcurement technologies at Penn has resulted
    in
  • - a competitive business advantage
  • - online product exposure internal marketing
    opportunities to all Penn customers
  • - opportunities for collaboration strategic
    initiatives
  • - increased market share above annual industry
    average
  • - new business opportunities with Penns
    eProcurement business partners

17
Impact on Senior Management
  • Campus-wide adoption utilization of
    eProcurement technologies at Penn has resulted
    in
  • - administrative excellence across campus in
    central administration
  • - process efficiencies opportunities to
    further leverage investment in technology
  • - opportunities for consolidation of
    operations, strategic outsourcing
    process savings
  • - reduced cost of required products services
  • - a competitive advantage when recruiting
    faculty researchers

18
Key Accomplishments
  • 75M in documented hard dollar product service
    cost savings since 1996
  • Annual 91 Return-on-Investment (ROI) for past 8
    years
  • Reduced average order cycle time from 18 days to
    less than 1 day
  • Spend through authorized purchasing system
    increased by 95 over last 5 years
  • Spend with contract suppliers increased by 85
    over last 5 years
  • Maverick buying reduced by 78 over last 5 years
  • Customer senior management satisfaction with
    Purchasing Services is at an all time high

19
Critical Success Factors
  • Strategic vision that is shared by the Schools,
    Centers central administration
  • Validation of business requirements with a focus
    on must have versus nice to have
  • Change management strategy to promote new
    purchasing environment address impact on
    faculty staff
  • On-going senior management support for project
    teams
  • Consistent communications message across
    institution
  • Promote whats in it for me? to key
    stakeholders
  • Identify advocates from the Schools Centers
  • Support from key suppliers
  • Deliver what was promised to the community

20
Contact Related Information
  • Ralph Maier
  • Director of Purchasing Services
  • E-Mail maierr_at_pobox.upenn.edu
  • Purchasing Services Web Site
  • www.purchasing.upenn.edu
  • Copy of Presentation (Purchasing Presentation
    Section)
  • www.purchasing.upenn.edu/about/in_news.php
  • The Penn Marketplace
  • www.purchasing.upenn.edu/buytools/pm.php
  • Purchasing Performance Metrics
  • www.purchasing.upenn.edu/about/performance.php
About PowerShow.com