NCBNCBA Survey of Purchasing Cooperatives on Benchmarking

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NCB/NCBA Survey of Purchasing Cooperatives on
Benchmarking

• Richard Dines
• National Cooperative Bank
• September 7, 2006

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Why a Survey on Benchmarking?

• Requests from cooperatives to benchmark
• Need sufficient number of cooperatives
• Usable results
• Pricing
• What to benchmark?

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Survey Findings

• Descriptive Information
• Median number of members 125
• Median percentage of members supply needs met by
  cooperative 35
• Average yearly net income 2.2 million
• Median number of employees 9

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Survey Findings
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Survey Findings
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Survey Findings
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Survey Findings

• Most Common Services Provided
• Negotiating back end rebates 73
• Product promotions w/vendors 70
• Negotiating purchasing contracts 68
• Education and training 65
• Structured networking 53

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Survey Findings

• Governance Information
• 57 have 6-10 directors on board 35 have more
  than 10
• Large majority of board elections are uncontested
• Large majority of board terms are three years or
  more
• 41 have term limits half of these have limits
  of 2 terms
• 54 compensate directors or reimburse for
  expenses

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Survey Findings
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Survey Findings
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Conclusions

• Interest in benchmarking confirmed, especially
  the following
• Salary scales
• Profitability
• Benefits efficiency (cost of co-op
  benefits/sales)
• Management efficiency (sales/mgmt. salaries)
• Issues of comparability and sufficient number of
  participants

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Next Steps

• Advisory Committee of 8 to 10 people
• Who will sponsor benchmarking study?
• How to cover costs of benchmarking study?
• Can comparability issue be resolved?
• Can we ensure a sufficient number of participants?

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Questions?

• Richard Dines
• 202-336-7632
• rdines_at_ncb.coop