The U is changing the way it does business to save the way it does education
By Adam Overland
May 18, 2010
"Aggregation of spending and vendors for leverage," "spend analysis for assessing opportunities," and "rigorous diagnostic analysis in each commodity area." These sound to many of us like things we'd rather not have to do. But just like a book and its cover, don't judge the Strategic Procurement Advisory Committee and the work it does by its title. Open the book, look at the results, and read on.
Brian Atwood, dean of the Humphrey Institute and procurement committee co-chair, says the recommendations from the committee, appointed by President Bruininks in March of 2009, have put in place actions that will save the University more than $2.7 million annually, and an eventual target of $25 million per year isn't a pipe dream. "The committee started with five major procurement areas where significant savings can be found," says Atwood. The initial "big five" savings opportunity target areas include categories common to a broad swath of the U, including office supplies, lab supplies, air travel, courier expenses, and IT equipment. "With discipline and aggressive action," says Atwood, "the U can invest even more savings in the academic mission." Additional areas of savings will continue to be analyzed and addressed.
That's key for colleges to keep in mind, says Tim Bray, associate director of purchasing services and leader of the strategic sourcing initiative. Bray says department dollars saved are going right back to departments. "We're focusing on dollars that will make a difference. The more a college changes its behavior, the more savings they are going to get back," says Bray.
What you can do
If you're purchasing office supplies, IT equipment, or traveling, ask yourself:
• Are you working with your IT leader to use a standard configuration?
• Are you using a U-wide agreement with Dell and Lenovo?
•Are you getting special quotes for large orders?
•Are you making sure that no one has both a desktop and a laptop?
•Are you taking advantage of the U license for Microsoft’s Operating System?
•Are you strictly limiting the purchases of Apple and other non-standard brands?
•Are you ordering through U Stores?
•Are you using value-priced items?
•Are you using remanufactured laser toner cartridges?
•Have you reduced your internal inventories?
•Have you considered using the ReUse Center for furniture or lab equipment?
• Are you booking online, using Cliqbook*?
• Are you using a U-wide travel agency?
•Are you using the U's National Car Rental contract?
•Are you taking advantage of hotel contracts?
•Are you using our off-airport parking supplier?
For more information, or if you have savings ideas or questions, email Tim Bray.
Consider that in just one seemingly benign category—paper purchases—the U last year spent nearly $1 million—enough to make trees scream in horror (were it not for an admirable recycling program). And the toner and ink jet cartridges used in printers can cost in the neighborhood of $ 1.3 million per year. Renegotiated paper contracts have already saved more than $60,000, says Lynn Hein, U Stores purchasing manager. After the committee found widespread purchasing of new monochrome laser toner cartridges even when remanufactured cartridges of the same quality were available, U Stores has instituted a new online ordering system that will notify a buyer purchasing a new cartridge if a remanufactured one is available, and at how much of a savings. "If we can get everyone to switch, we'll save about $250,000 per year," Hein says.
U Stores will also be switching to a new office supply vendor on July 1, saving departments a dramatic 13 percent (about $400,000 overall for the University). Hein is now shifting his efforts toward finding savings in the purchase of lab supplies.
Drop how you shop
Essentially, the whole process comes down to how people at the U like to shop. Changing how people do that--by incentivizing and simplifying the preferred ways of buying--is going to benefit the University in much the same way that smart shopping helps a family stretch their budget. Consistency is key, too. Always ordering through U Stores has great potential savings. For example, if a person makes a trip to buy office supplies from an office supply store as an afterthought after work, they lose out on a U discount and create additional paperwork and processing. Keeping the U's ReUse Center in mind for furniture or lab equipment also creates savings.
Travel dues…and don’ts
Savings will come in other areas too, including those well outside of the office. Although the reality is that cubicle confinement is common, faculty and staff travel to the tune of more than $10 million per year. That travel ranges from seminar or conference attendance to faculty research in South America (and throughout the world), and includes air travel, car rental, hotel stays, and more, says Beth Tapp of Purchasing Services. Tapp says the deployment of a new website called Cliqbook will streamline the process, benefiting the U, faculty, and staff taking University and even personal travel. The site will be available soon and come with pre-loaded discounts for airline, hotels, and car rental.
"Right now, people use more than 60 different travel agencies and anything available online, from Travelocity to kayak.com, says Tapp. "We haven't provided enough guidance on this from a U perspective—there are savings inherent in using U contract agencies. Cliqbook will charge a flat fee of just $10 per reservation, as opposed to the $10- to $80-per-trip booking fees we now see."
The U is also working on a new contract with Delta Air Lines. It will include a discount for U faculty and staff ranging between 2 and 6 percent depending on the fare class. The online booking tool will automatically provide this discounted pricing. Just like any other site, Cliqbook will order the search results according to competitive pricing, including all other available options.
For the majority of University employees who do spend most of their time behind a desk surrounded by permanent or temporary walls, significant savings can be found in the common use of IT Equipment.
Technology is a massive expense at the U, and in 2009 alone the U spent more than $9 million with Dell, the U's largest supplier of personal computers. This made up just 30 percent of the total spent on IT hardware. IT director and information technology manager Rex Wheeler said that in polling University IT directors, his subcommittee found that there were about 47 computer configurations in use throughout the University. But the committee found that just three configurations would meet the needs of more than 80 percent of the U community. "By consolidating the needs into a few specific builds, Dell will be building fewer models on their side and they'll pass those savings on to us," says Wheeler. An added benefit, says Wheeler, is that the U's own internal support costs will go down with standardization because IT will need to support fewer models. This move will also result in quicker fixes when something goes wrong and allow resources to focus on more strategic projects.
Wheeler adds that the goal is not to reduce options, but to "entice colleges and departments by providing a solid machine that covers their needs at a price that is better than what they would see if they were trying to build their own, or negotiating with Dell themselves." The annual savings with Dell is estimated to be upwards of $1 million per year. "We will talk to other vendors and take these configurations to them." And that means even more savings in the future.
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Last modified on February 9, 2011