Strategic sourcing - A System-wide, Collaborative Purchasing Process

1. STRATEGIC SOURCING
A System-wide, Collaborative
Purchasing Process

2. Strategic Sourcing
To develop and implement an effective
system-wide, collaborative purchasing
process designed to maintain or increase
customer satisfaction (by enhancing product
quality and service levels) and significantly
lowering total cost by coordinating and
leveraging common purchases across the
UC system.
MISSION

3. Strategic Sourcing
Complete Customer Satisfaction.
Continuous Improvement of Internal
Service Levels and Product Quality.
Process Excellence.
 Significant Total Cost Reduction
(5%-15% Target).
Goals

4. Strategic Sourcing
 Visible, Active Executive Sponsorship
– A Single Vision
– Internal Cooperation and Participation
 End User Focus and Involvement
– Clear Understanding of User Requirements
– Use of Cross Functional/Departmental Teams
 Data Integrity
– Rigorous Analysis
– Fact Based Decisions
 Appropriate Use Of Technology
– Internet Enabled E-Procurement
– Solid, Reliable System Infrastructure
 Continuous Process Improvement
– Establish Best Practices/ Key Performance Indicators
– Constantly Measure Results and Implement Improvements
CRITICAL SUCCESS FACTORS

5. Road Map
INCREASED CUSTOMER
SATISFACTION and
SIGNIFICANT COST
REDUCTIONS
Technology
Implementation
of Best Practices
Identify/Prioritize Opportunities
Establish User requirements
Execute RFP Process/Select Supplier
Develop Timely and Accurate View of Spending Data
Simplify and Stream-line Processing (P-Card)
E-Procurement Development
Strategic Sourcing
Products and
Services
Processes
Rationalize Current Specifications
Evaluate New/Alternative Products
Identify Non-Value Activities
Best Practices Analysis
Business Process Analysis
Implement Continuous Improvement Practices/Metrics
Conduct Spend Diagnostic
Launch Cross Functional/Divisional Teams
MISSION STRATEGIES TACTICS
Monitor Compliance
Collaborative
Purchasing
Process

6. Current Teams
 Purchasing Card (P-Card)
 Office Products ($25mm)
 UC Press ($10mm)
 Fed X ($10mm)
 Fitness Equipment ($3mm)
 Lab Supplies ($120mm)
 Appliances (under evaluation)
 Dormitory Furniture (under evaluation)

7. Commodity Groups
 Athletic & Recreational Supplies
 Auto Rental
 Business Equipment
 Computer Equipment &
Maintenance
 Computer Supplies
 Computer Software
 Departmental Stores
 Entertainment Services
 Environmental Services
 Explosives and Firearms
 Food Services
 Freight and Shipping Service &
Supplies
 Furniture (office and housing)
 Laboratory Supplies & Equipment
 Pharmaceuticals
 Printing Services
 Maintenance/Repair/Operations
 Medical Equipment
 Medical Services
 Medical Supplies
 Miscellaneous Equipment
 Miscellaneous Services
 Miscellaneous Supplies
 Multimedia Supplies
 Office Supplies
 Professional Services
 Security
 Site Maintenance
 Telecommunications Equipment
 Temporary Services
 Theater Supplies
 Travel
 Utilities

8. Major Commodity
Relationship Groups
 Professional Services
– Professional Services
– Temporary Services
 Miscellaneous
– Utilities
– Misc. Equipment
– Printing Services and Supplies
– Furniture
– Business Equipment
– Freight & Shipping Supplies
– Misc. Other, Includes:
• Athletic & Rec. Supplies
• Auto Rental
• Collections
• Departmental Stores
• Explosives & Firearms
• Literary Services
• Medical Equipment
• Misc. Supplies
• Site Maintenance
• Theater Supplies
 Services
– Medical Services
– Food Services
– Entertainment Services
– Travel
– Misc. Services
– Security
– Environmental Services
 Supplies
– Laboratory Supplies
– Maintenance/Repair/Operations
– Medical Supplies
– Multimedia Supplies
– Office Supplies
– Pharmaceuticals
 Telecommunications/Computer
– Computer Equipment
– Computer Supplies/Software
– Telecommunications Equipment/
Services