Improving procurement operations, across UB and SUNY

After numerous years of talk, accompanied by starts and stops, the State University of New York (SUNY) is preparing to adopt an electronic procurement (e-procurement) system. It’s been no small feat, and is arising because of a multi-campus/SUNY collaboration, with the University at Buffalo (UB) Center for Industrial Effectiveness (TCIE) at the heart of the action.

UB procurement leaders have worked in earnest the last two years with counterparts from the Western New York campuses of Brockport, Alfred State College, Alfred University, SUNY Buffalo State, SUNY Fredonia, SUNY Geneseo, Erie Community College and Monroe Community College – along with SUNY administrators – to arrive at a system that will result in savings through increased strategic sourcing, more efficient and standardized processes, and an optimized online shopping experience.

Guiding their activities is Thom Marra, a Lean Six Sigma (LSS) Master Black Belt facilitator at TCIE, who is utilizing the data-driven and disciplined LSS method to project manage and maintain momentum.

“Thom can go from a 40,000-foot view down to a 5-foot view, and everything in between,” said Daniel Vivian, assistant vice president of procurement, AP, inventory and travel services at UB. “Seldom do you have people who can see the big picture and talk there, but also be able to talk very tactically.”

Vivian is very familiar with Marra’s skills and multi-industry background through work experiences dating to the 1980s, so understood how he could benefit the SUNY effort.

Improving procurement operations

Well before Vivian recruited Marra for SUNY-wide e-procurement work, Marra and TCIE were helping to make process improvements in UB’s Office of Business Services. The division is responsible for all purchases across UB, from paper clips to construction supplies and everything in between. Vivian has tapped the center’s statistical expertise since 2008 by enrolling employees from his unit in LSS certified training, engaging candidates of the Student Black Belt Certification Program to complete projects, and loaning Marra’s services for further support.

Numerous projects have involved the standardization of processes – an extremely important outcome when considering the complexities of wide-ranging New York State rules and regulations, the university’s vast size, and regular employee movement via job changes. Efforts have led to reducing the number of transactions and amount of time to process them, increasing capacity, and shortening lead and cycle times.

For example, data mining conducted in 2008 revealed that 60 percent of transactions involved processing purchase orders that totaled $500 or less; 23 percent of all transactions were for less than $100. The amount of a PO has no impact on the related transactional costs. Whether a PO is $1 or $50,000, the university still foots the same bill for staff efforts.

By employing LSS practices, the number of purchase orders between 2008 and 2011 decreased from 35,000 to 25,000 – a time period when spending increased from $115 to $135 million. Employing the use of a credit-like card reduced costs even more. The new e-procurement system, SciQuest, is the last step in ridding PO transactions of waste.

TCIE’s work has spread to University Facilities – Business Services’ largest “customer,” as measured by spend, transactions and diversity. The wider net of assistance was triggered when Vivian reached out to Tonga Pham, who became associate vice president of facilities in May 2015, in the hopes of smoothing out operations.

Vivian described the historical relationship between his office and the facilities unit as sometimes conflictive and murky because of numerous complications. Knowing that Pham is a chemical engineer with a process improvement background, he surmised she would be receptive to solving issues and drawing a finer distinction between the purchasing activity responsibilities of each unit with a methodical approach.

She embraced the opportunity.

For the last six months, Marra has been facilitating a few facilities projects concurrently. He started by conducting brainstorming sessions with two groups in particular – facilities operations, and facilities planning and design – to identify issues, prioritize, and devise plans of attack.

“This has allowed individuals to voice their concerns,” said Tricia Kandler, senior purchasing associate in UB’s main purchasing unit who has been a team member of facilities-oriented projects. “People just want to be heard. They weren’t being heard, but now their voice is getting out there. A little bit of tension has relaxed.”

Data has been driving much of the conversation in determining solutions. Questions such as “What is the actual time to process orders?” are being examined and researched in order to enact measures for improvement.

“When I look at the main purchasing department’s objective, it’s about being inclusive and reaching out to the customers,” Kandler said, explaining that these projects are helping to define issues such as, “What do they need and how do we facilitate that for them? How do we move to being more proactive rather than reactive?”

Procurement across SUNY

Similar to UB-based projects, the process for the SUNY initiative began with defining the group’s overall goal and identifying issues of the current procurement system. Developed about a decade ago, the system lacks an integrated, automated workflow, leaving most campuses to work in the land of paper requisitions and manual inputs. And no granular level of detail exists for reporting, which is essential for successful strategic sourcing.

“We knew we bought a lot of lab equipment. We knew we bought a lot of office supplies,” said John Grabowski, UB’s director of procurement. “But that was about all we knew. We always got caught up in the lack of data.”

Marra, with assistance from UB Business Services Process Improvement Director Michael Maute, facilitated weekly meetings, delegated tasks and mined data.

“Thom has a very good temperament for being able to draw out of people the information we need,” Vivian said. “He is very patient. He’ll ask the question one way. If he doesn’t get the answer he needs, he asks it another way, and then another way if needed.”

A Request for Information (RFI) was developed to collect information from industry vendors, followed by a Request for Proposals (RFP) that designated SciQuest as the chosen platform.

The new system addresses current shortcomings with standardized, electronic-based work processes, as well as the capture of tremendous amounts of data. It includes automated management of the sourcing process and optimization of the entire contract lifecycle. Across SUNY, purchasing agents will become strategic sourcing agents.

“We will centralize all of our bids in the Western New York region,” Grabowski explained. “So when UB goes out for bids for office supplies, every campus in Western New York will be able to partake in it. Now we can combine our volumes that way.”

Negotiated prices will be built into the online catalog that SUNY faculty and staff members access when placing purchases. Using the search query function will return all matching options for an item, with the ability to compare specifications, availability and pricing. Making a purchase will be as simple as adding the selection to a shopping cart, checking out, and submitting electronic payment.

Implementation of the system at UB and the other Western New York campuses is expected by the end of 2017, with subsequent campuses joining in future phases.