Transcript Avoid Holding Patterns: Hold Resolution Utilizing Imaging

Leveraging Purchasing Technologies and
Strategic Initiatives to Produce ROI
The Next Level Conference
March 3, 2003
Presentation Agenda
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Purchasing Overview
Business Objectives
Purchasing Technologies
Strategic Purchasing Initiatives
Key Accomplishments
Critical Success Factors
Contact Information
Conclusion
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Purchasing Overview
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Decentralized purchasing environment with
purchase requisition creation delegated to the
point-of-demand
Over 1,700 purchasing system users in 12 schools
and 20 business centers
Over 1,400 MasterCard P-Card cardholders
Purchase order approval for transactions <$5,000
delegated to authorized purchasing system users
in the schools and centers
Fiscal year 2002 purchase activity:
– 155,000 purchase transactions for $505M
– 105,000 P-Card transactions for $20M
Purchasing staff consists of 10 professional and 2
non-professional positions
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Business Objectives
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Provide administrative excellence in support of
Penn’s educational and research mission
– Make purchasing easy for faculty and staff
– Reduce time and effort related to purchase
order creation and related activities
– Provide easy access to supplier content for
most commonly ordered products
Enhance the effectiveness of the purchasing
organization
– Increase purchasing activity from “preferred
contract suppliers”
– Consolidate supplier database
– Reduce maverick buying
– Identify new cost savings opportunities
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Oracle Purchasing System (BEN Buys)
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Implemented Oracle Financials (Purchasing,
Payables & General Ledger) in July 1996
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Introduced Oracle’s iProcurement electronic
requisition to the campus community in January
2002 as part of upgrade to Oracle Financials
Release 11i
– Provides integration to the Penn Marketplace
– Delegates item shopping and requisition
creation to the point-of-demand
– Enables multi-supplier ordering using a single
electronic requisition
– Oracle workflow used for requisition routing,
encumbrance, regulatory requirements, and
purchase order approval
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The Penn Marketplace
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Penn’s private online supplier exchange for most
commonly ordered products and services
Catalog content hosting and management services
provided by Global Exchange Services (GXS)
SciQuest provided additional content services to
GXS/Penn to cleanse, enrich, categorize, & format a
number of scientific supplier catalogs utilized within the
Penn Marketplace
Contains over 550,000 products from 31 suppliers with
Penn specific contract pricing
Supports strategic purchasing initiatives by making it
easy to order from preferred contract suppliers
Consistent content presentation across commodities
and suppliers
Robust search tools enables customers to quickly and
easily find desired products and services
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Related Purchasing Technologies
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Electronic Data Interchange (EDI) services
provided by Global Exchange Services
– Outbound purchase & change orders
– Inbound supplier invoices
Integrated document imaging system from 170
Systems
– EDI invoices are imaging electronically
– Paper invoices are imaged upon receipt in
Accounts Payable
Procuri, Inc provides an online bidding tool to
enable reverse auction events
– Used for competitive bidding of Penn and local
cooperative buying group requirements
Electronic payment of supplier invoices using
Electronic Funds Transfer (EFT) to be implemented
in 2003
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Strategic Purchasing Initiatives
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Supply Chain Management
– Focus on marketing acceptance of strategic
suppliers and new pricing agreements
– Expand use of long term and sole source
supplier contracts whenever possible
– Recruit suppliers and manufacturers for the
Penn Marketplace
– Reduce supplier database and multiple
sources for products
– Streamline distribution channels to maximize
University buying power
– Enforce financial policies, use of approved
buying tools and suppliers to reduce maverick
buying
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Strategic Purchasing Initiatives (cont)
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Purchasing Cost Savings
– Formal cost savings program launched in July
1996 with implementation of Oracle Financials
– $64.8 Million in documented hard dollar product
and service cost savings since 7/96
– $4.7 Million in negotiated savings for Penn
Marketplace supplier recruitment
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Cooperative Buying
– Participation in Philadelphia Area Collegiate
Cooperative (PACC) created for regional pricing
agreements
– E & I contract benchmarking initiative to take
advantage of E & I competitively bid agreements
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Strategic Purchasing Initiatives (cont)
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Strategic Marketing
– Promote benefits of business initiatives and
key supplier relationships to faculty and staff
– Promote value of and create support for new
strategic purchasing initiatives
– Provide internal marketing opportunities for
strategic suppliers and manufacturers that
support Penn’s purchasing and technology
initiatives
– New Supplier Promotion Module hosted by
SciQuest and integrated into Penn’s BEN Buys
purchasing system to be launched in March
2003
– Generate awareness of purchasing department
accomplishments throughout all levels of the
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institution
Key Accomplishments
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Campus wide use of a fully integrated paperless
electronic purchase-to-pay process
Reduced order creation and approval cycle
resulting in 92% of all orders created, approved
and transmitted to suppliers in less than 1 hour
550,000 items in the Penn Marketplace exceeds
first year project goal of 400,000
53% of all purchase orders created in 2002 were
issued to the 31 participating marketplace
suppliers exceeding first year project goal of 40%
Deactivation of 220 suppliers in 2002 resulted in
increased business opportunity for preferred
suppliers
Penn Marketplace suppliers realized a 16 to 42%
increase in business during 2002
$64.8M in documented hard dollar cost savings
45% of supplier invoices were processed via EDI 11
during 2002
Critical Success Factors
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Consistent and on-going senior management
support for business initiatives and technology
projects
Collaboration between central administration and
Schools and Centers
Faculty and staff involvement in focus groups,
commodity teams, and IT project teams
Strong internal IT support for the development,
implementation and on-going maintenance of new
purchasing technologies
Staff buy-in to changing role of purchasing
Training of faculty and staff on new technologies
Internal marketing of the value and benefits of new
technology investments and purchasing initiatives
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Support from key strategic suppliers
Contact Information
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Ralph Maier
Associate Director, Purchasing Services
E-Mail:
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[email protected]
Vira Homick
eProcurement Manager, Purchasing Services
E-Mail:
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[email protected]
Penn Purchasing Services
www.purchasing.upenn.edu
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eProcurement Project Overview
www.naeb.org/E_Procurement_Stories/Purchasing_Made_Easy.htm
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Conclusion
Questions?
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