“Joint Purchases of Common Requirements”
Consortium Buying
- Private Industry
- Non-Competitors
- Anti-Trust Issues
- Core Commodity Focus
Cooperative Buying
- Public Entities
- Non-Competitors
- Procedural Issues
- MRO, Support Supplies
Spend Management
- Direct Materials
- Indirect Materials
- Capital Project Procurement
Why Cooperative Purchasing?
Because It Works!
Primary Benefits
- Increased Volume Discounts
- Reduced Administrative Costs
- Process Improvements
Group Formation
- Commit to The Process
- Form a Project Team
- Agree on the Objectives
- Create a List of Potential Members
- Extend Invitations
- Finalize Membership
- Build Trust
- Formalize the Membership Agreement
Opportunity Identification
Members Collect & Share Information
- Segment their Expenditures
- Determine Problem Areas
- Identify Improvement Opportunities
- Share Best Practices
- Perform Informal Stakeholder Analysis
- Decide on Best Opportunities
- Calculate Cost Reduction Potential
- Develop High Level Project Plan &Schedule
- Establish Project Performance Measures
The R.F.P.
- Gather Member RFP Documents & Reconcile Differences
- Finalize & Aggregate Member Historical Utilization
- Identify Potential Bidders – evelop Bidder Short List
- Create Specs., RFP Draft and Secure Approvals
- Distribute RFP Documents
- Monitor, Clarify & Expedite as Necessary
- Receive Bid Documents – Coordinate Group Bid Opening
- Perform & Present Analysis of Alternative Offers
- Group Members Decide on Award
- Create Contract Draft(s)
- Complete Documentation
Project Evaluation
- Evaluate Purchasing Project Performance
- What Worked
- What Needs Improvement
- Calculate ROI
- Report Results
Define Next Project
- Products
- Services
- Capital Equipment
Benefits Of Integration
- 25-50% reduction in total supply chain costs
- 25-60% reduction in inventory
- 25-80% increase in forecast accuracy
- 30-50% improvement in order – fulfillment cycle time
- According to PMG/SCOR
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