It’s the Process not the Product

I’ve spent nearly 30 years in the office supply industry. During that time I’ve come to understand that the costs associated with activities surrounding supply purchasing far outweigh the costs of actual product.

The nature of general office supplies is that each individual item is not a high-ticket expense. From years of studying various procurement processes employed at a wide-range of customer organizations and of creating improved systems, it is possible to conclude that the time taken to selecting product, ordering product, receiving product, occasionally returning product and paying for product can be considered a high-ticket human resource expense.

Here are some tips to keep those processing costs down:

• Avoid general shopping in mega-catalogs. The average office supply catalog is well in excess of a thousand pages. Although this tool can be helpful when looking for the occasional specialty item, purchasers can be overwhelmed when looking for general office supplies.
• Establish a reasonable listing of frequently ordered items with good value brands selected for each product. For instance, most office supply dealers carry 14 brands of binders? One of those brands represents the best value binder. The other thirteen, to varying degrees, represent less value.
• Work with a single-source whose pricing and service you trust. If your organization is shopping a number of suppliers, looking for the best price possible on an inexpensive item, the time spent comparison shopping completely erases the small gains in product price.
• Establish cost center sub-accounts with your supplier. This allows for easy and accurate allocation of costs. It also ensures that packages are delivered clearly marked for with the appropriate department name.
• Insist on summary billing. Processing many relatively small invoices each week is a drain on accounting personnel time. One monthly bill, if well prepared by the supplier, can save hours of work each month.
• Work with a supplier that has a great on-line system that is easy to use and allows for site customization that is tailored to your company’s needs.
• Work with a supplier that has a solid customer service team. Your organization specializes in your field, not in office supplies. Rely on the expertise of people who understand the products. Your customer service team should always be available for questions.

Using these simple principals we’ve created hundreds of procurement programs, saving our customers thousands of dollars each year in time and in product costs.

Gail O’Roke, CDC
Vice President, East Bay Division