How having the right suppliers can help higher education institutions reduce their costs and achieve innovation that will attract students
In theory, procurement in education is controlled through compliance as it must comply with the Public Procurement Contracts Regulations. This is because educational institutions receive some government funding and are therefore obliged to ensure that every item they purchase is good value for public money, and that the procurement process is fair and transparent.
As a result, institutions have frameworks in place – non-exclusive contracts with suppliers that are decided through a tender process. The chosen three or four suppliers will then have the right to compete for business over the life of the contract. It is the procurement department’s job to try to ensure that as many purchases as possible go through those preferred suppliers so that they stay within compliance rules and benefit from the cost savings and data which these suppliers can provide.
"Actual purchasing decisions are virtually all made at user level rather than through central procurement"Damian Wynne, Industry Sector Manager, RS
The reality, according to Wynne, can often prove quite different. “Actual purchasing decisions are virtually all made at user level rather than through central procurement,” he explains. “This often results in institutions using a wide variety of suppliers based on decisions as varied as cost and availability, through to simply the academic or technician having a personal preference for a particular brand product or a relationship with a sales rep.”
In procurement terms, this is known as “maverick” spend, where the user selects vendors outside the agreed supplier framework. “With maverick spend there’s a strong chance that buying parts from a non-approved supplier will cost more, possibly take longer to source, and the quality of parts may not be good enough,” says Helen Alder, Head of Knowledge at the Chartered Institute of Procurement and Supply (CIPS). “It’s not unknown for people to simply search the internet and buy parts that turn out to be counterfeit or that don’t meet required quality levels. Where you have these products going into machines with moving parts, you have potentially very serious consequences if they go wrong.”
These are all factors that can be helped by adopting a more strategic approach purchasing industrial supplies for the indirect procurement category of maintenance, repair and operations (MRO). These points, and others, are also explored in depth in the 2020 Indirect Procurement Report, jointly produced by RS and CIPS.
Wynne is a firm believer that the solution to this problem is a closer working relationship between the user and the central procurement team of each institution. “The key here is communication – it’s a two-way process,” he explains. “It is essential that the procurement team seeks input from academics and researchers around the type of products they require so that the suppliers that are chosen and contracted can provide what the user needs. Similarly, though, it’s just as important for academics and researchers to understand the need. and benefits, of using those preferred suppliers when they order parts and equipment.”
"It is essential that the procurement team seeks input from engineers and researchers around the type of products that they require"Damian Wynne, Industry Sector Manager, RS
Wynne encourages universities and colleges to work with RS and other suppliers to help get this message across. “Because of the experience we have within the sector and in the type of procurement involved, we have the data and insight that clearly shows the cost and time benefit of consolidating suppliers, which will save money that can be better invested elsewhere.”
In addition, RS has taken steps to work directly with academics when it comes to providing the sort of innovative products that they are interested in. “These people want to be reassured that RS is stocking the cutting-edge technology that they need to be innovative. This is something we are aware of and are constantly engaged in conversations with our customers around what they will need in the future,” he says. “That also comes through practical collaboration, where we will seek academics’ opinions on our latest range of, say robotics, or Internet of Things technology, and use their feedback to influence our future product roadmap.”