Do you have employees asking, “have you seen my red stapler?” The discussion around the benefits of standardized procurement makes me think of the movie, Office Space. If your company is not standardizing, there are probably many things that are being purchased that are more of a want, than a need. Are red staplers really necessary for your business? The real question is, how much money is your organization throwing away annually? In this article, we will discuss three easy ways to standardize product segments to reduce spend. By gathering usage, having a knowledgeable representative give recommendations based on your organizations data, and putting the new procurement process in place, your can save thousands, if not tens of thousands of dollars annually. Thus, allowing for reinvestment in the company, bigger bonuses, and perhaps nicer amenities for employees.
Gathering order history and/or usage can be cumbersome when standardizing. There can also be roadblocks. However, there are a few easy ways to obtain this information. In most websites there is a functionality to extract data. This is by far the most efficient way to gather the information that you are looking for. Look in your account for key words such as: order history, usage report, or invoice history. Another way to gather order history is to get with your accounting department and request invoice history. This can be time consuming for your accounting team, add workload to an already busy day, and merging data is not efficient. The last way is to simply reach out to your sales person and ask for this information. All supply businesses have the autonomy to run these kind of reports and this should be a simple task for your representative to complete.
Having a knowledgeable representative look over the data is important. He/she can then make well informed recommendations to streamline spend, reduce waste, and save money. Some examples of this are: only allowing employees to purchase one kind of paper clips. Is there really a legitimate argument for using colored paperclips? Other examples are: switching from single to double packed toners, using one kind of toilet paper, or purchasing the same coffee throughout the entire organization. Aggregating data to find ways to reduce spend is something your supplier can and should do for you. This behooves you, the customer, and can give them, the supplier a client for a lifetime.
The third piece of the puzzle is implementing the new standardized procurement process. Many organizations do this by sending out communications of the new procedure, which normally includes an order approval capability. This can limit purchasing and give full control to approvers in the organization. Establishing the new culture and incentivising the new process can help employees accept the “new ways of doing things” and eliminate old habits.
The standardization process can be grueling. However, by following the simple process of: gathering data, dissecting that data, and implementing the process, your organization will save a tremendous amount of money on an annual basis. So, when you have an employee ask, “have you seen my red stapler”? You answer, “no, but I have seen a black one, and I can get it to you tomorrow.”
For more information on standardizing your business needs, you can visit our Standardized Procurement page or download our white Paper