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Look Back to Move Forward

Posted 4/17/2018

This is a case for capturing, analyzing and utilizing procurement data to create value for your organization; big value, here’s how and why

Procurements are obligated to be transparent and offer equal opportunity to all potential respondents to a procurement request. If the current supplier is the only supplier that knows the granular detail of your requirements, your supply request will not be transparent and equal to all. Where there is no current single supplier and sufficient detail as to products and quantities are not known, suppliers could and likely will build in a “price cushion” to allow for the unknown. Your procurements should disclose past purchases by type and quantity in future supply requests. This is particularly relevant to Maintenance Repair and Operating type items. Some suggestions:

  • ·        Good suppliers capture sales data. When drafting your supply request, require the supplier to provide purchase reports by reasonable time periods, at least quarterly or more frequently depending on the type of goods. Analyze and aggregate this data by looking for consolidation opportunities and to prepare for the next round of procurement at end of contract.
  • ·        Ask for purchase reports even if you did not require them in your supply contract, chances are your supplier will be happy to provide them.
  • ·        Analyze P-card purchases by commodity code. This could identify opportunities for a system contract and/or identify “rogue buying” off existing contracts.
  • ·        Look for opportunities to standardize on one product instead of buying a host of similar functioning products. Economies of scale could add value.
  • ·        Identify your “A” and “B” items by contract. These items and the annual purchase data will be key information to be disclosed in your next procurement.

Once analyzed, utilize the captured procurement data by sharing it with applicable budget holders in your organization. Ensure also that relevant data and its analysis is retained for future reference, continuity and succession planning in your Department.