The new supply chain: how IHEs are improving business processes with 3-procurement.BUSINESS GURU W. EDWARDS DEMING William Edwards Deming (October 14, 1900–December 20, 1993) was an American statistician, college professor, author, lecturer, and consultant. Deming is widely credited with improving production in the United States during World War II, although he is perhaps best known for FIRST PROPOSED HIS "PRODUCTION Viewed As a System" while explaining his quality management theories to Japanese and American business leaders in the 1950s. Deming's system was primarily concerned with manufacturing, but it outlined the basic principles of the supply chain as it is defined widely today. As translated by the official Supply Chain Council, a group that represents a broad cross section of industries, including manufacturers, services, distributors, and retailers, these basics principles, are "plan, source, make, and deliver," or the SCOR SCOR Scientific Committee on Oceanic Research SCOR Supply Chain Operations Reference model SCOR Small Corporate Offering Registration SCOR Specialized Center of Research (White Plains, NY) SCOR Second Cousin Once Removed model. The Supply Chain Council and the university community are, admittedly, just getting acquainted. The supply chain is presented to industrial and business users by vendors as a Supply Chain Management (SCM (1) (Software Configuration Management, Source Code Management) See configuration management. (2) See supply chain management. ) system. It may also have connections to, or partially include, logistics and transportation management depending upon the level of its granularity (processing details). What does all this mean to colleges and universities? As the argument goes, universities make scholars, not widgets, and this does not make for an exact fit with the SCOR model, or any supply chain model. But IHEs are prodigious purchasers of goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. , and, among the many departments and facilities located on the modern campus, finding those goods and services at the best price and tracking shipments--and then tying it all together in an efficient manner--is still a challenge. However, an effective tool for better managing the supply chain is available. It has enormous impact on college and university business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets , and that is e-procurement. Links in the Chain Procurement plays an important part of so many university operations that the benefits of streamlining and automating the process can't be overstated o·ver·state tr.v. o·ver·stat·ed, o·ver·stat·ing, o·ver·states To state in exaggerated terms. See Synonyms at exaggerate. o . As university purchasing transitions from the paper-based, clerical activities of the past to the time- and cost-efficient, automated, self-service environment offered by e-procurement, a growing number of vendors have populated the field in recent years. Everything from computers, lab equipment, and multimedia products to food services food services Hospital services A 24/7 department in a hospital that provides for the nutritional needs of inpatients–eg, those needing special diets, preparing meals and transporting them to the floor and, through the cafeteria, the hospital staff and , health products, athletic equipment, office supplies Office supplies is the generic term that refers to all supplies regularly used in offices by businesses and other organizations, from private citizens to governments, who works with the collection, refinement, and output of information (colloquially referred to as "paper work"). , and furniture--even office personnel--can be acquired through the various procurement products that dot the landscape. Among them are established players such as Oracle/PeopleSoft, SciQuest, SAE AcquireX, the Educational & Institutional Cooperative Service, and OrgSupply, all of whom claim higher education higher education Study beyond the level of secondary education. Institutions of higher education include not only colleges and universities but also professional schools in such fields as law, theology, medicine, business, music, and art. institutions as clients. AcquireX, for example, has worked with such schools as University of California-Irvine, American University American University, at Washington, D.C.; United Methodist; founded by Bishop J. F. Hurst, chartered 1893, opened in 1914. It was at first a graduate school; an undergraduate college was opened in 1925. Programs provide for student research at many government institutions. , and Cal State Fullerton. In 2003, the University of Chicago chose AcquireX as the e-procurement provider for the university's Campus Computer Stores. The university wanted to enable students and faculty to purchase goods on and offcampus, 24 hours a day, without the costs and risks associated with buying, implementing and maintaining order entry software. In just two years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time university has procured over $20 million of goods using AcquireX's ASP software application. In May, the Berklee College of Music Berklee College of Music, founded in 1945, is an independent music college in Boston, Massachusetts, with many prominent faculty, staff, alumni, and visiting artists. It has an enrollment of approximately 3,900 students and a 2004 faculty of approximately 430. (Mass.), the world's largest independent music college, chose OrgSupply's Online Purchasing Management solution to manage online buying from preferred suppliers across their organization. The school wanted to control off-contract or "maverick" buying by encouraging purchases from vendors with whom it had negotiated favorable contracts. It could also negotiate better terms with suppliers by incorporating a snore snore (snor) 1. rough, noisy breathing during sleep, due to vibration of the uvula and soft palate. 2. to produce such sounds during sleep. snore v. efficient means of electronic payment. OrgSupply provides an e-procurement solution for the Boston Consortium, which comprises 11 Boston area colleges and universities. SciQuest accelerated into the higher education market after acquiring HigherMarkets, an e-procurement solution provider for higher education, in 2002. Since then, SciQuest has added over 20 higher education customers, including the University of Pennsylvania (body, education) University of Pennsylvania - The home of ENIAC and Machiavelli. http://upenn.edu/. Address: Philadelphia, PA, USA. , University of New Mexico The University of New Mexico (UNM) is a public university in Albuquerque, New Mexico. It was founded in 1889. It also offers multiple bachelor's, master's, doctoral, and professional degree programs in all areas of the arts, sciences, and engineering. , Yale University Yale University, at New Haven, Conn.; coeducational. Chartered as a collegiate school for men in 1701 largely as a result of the efforts of James Pierpont, it opened at Killingworth (now Clinton) in 1702, moved (1707) to Saybrook (now Old Saybrook), and in 1716 was (Conn.), Massachusetts Institute of Technology Massachusetts Institute of Technology, at Cambridge; coeducational; chartered 1861, opened 1865 in Boston, moved 1916. It has long been recognized as an outstanding technological institute and its Sloan School of Management has notable programs in business, , and New Mexico State University New Mexico State University, at Las Cruces; land-grant and state supported; coeducational; chartered and opened 1889 as a college. It became New Mexico State Univ. of Engineering, Agriculture, and Science in 1958 and adopted its present name in 1960. . SciQuest's supplier enablement Supplier Enablement is the process of electronically connecting suppliers (or other trading partners) to a company's supply chain. Supplier enablement is achieved when suppliers of goods and services are connected to a company's back-office systems to exchange critical business model quickly enables an institution's supplier base to work directly with the company's solution, automating the requisition/purchasing process through the settlement process, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Susan Miglucci, vice president of marketing and strategic alliances. By enabling these suppliers, the institution gains greater visibility into their spending, and can monitor on-contract pricing, to realize greater savings. Because SciQuest is a hosted, web-based solution, any maintenance or upgrades are made across all uses. All customers are always on the same software version, making support more efficient. The easy-to-use interface drives user adoption, which drives more transactions through the system, allowing for greater spend analysis and tracking. For example, the University of Pennsylvania integrated SciQuest's Spend Director with Oracle iProcurcment software, and enabled approximately 1,800 users to access the University's strategic contract supplier's online catalogs in key commodity groups and within the first month saved $2.1 million in product savings alone. Using Spend Director, the university expects to direct at least 60 percent of campus purchase transactions through participating Penn Marketplace contract suppliers. Pace Procurement Alice Seifer, purchasing director at Pace University (N.Y.) says the school wanted to introduce a more efficient and effective way of procuring goods and services from start to finish. Pace has seven campuses, including downtown and midtown New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. , Pleasantville, Briarcliff, White Plains (a graduate center and the law school), and a Hudson Valley
The Hudson Valley refers to the canyon of the Hudson River and its adjacent communities in New York State, generally from northern Westchester County northward to the cities of Albany and Troy. Center at Stewart International Airport Stewart International Airport (IATA: SWF, ICAO: KSWF) is located near Newburgh, New York, in the southern Hudson Valley, 55 miles (88.5 km) north of New York City. . There are approximately 14,000 students enrolled in undergraduate, graduate, and professional degree programs in the Dyson College of Arts and Sciences, Lubin School of Business The Joseph I. Lubin School of Business is the business school of Pace University. It was named after Joseph I. Lubin, an alumnus and benefactor of the school. The school was established in 1906 as the Pace School of Accountancy to prepare men and women for the CPA exam. , School of Computer Science and Information Systems, School of Education, Lienhard School of Nursing and Pace Law School. "This was slot just for the final purchase but also the appropriate price negotiations and vendor selections that are of prime importance in the procurement process," says Seifer. "We believe that direct buying that is, end user involvement--goes a long way to reaching our goals." Pace knew that getting buy-in from all constituents would be a key to making the e-procurement launch successful, and so the institution was pleased to find that SciQuest and SunGard helped prepare and train the university community on the use of the application. "Both SunGard SCT Sacrococcygeal teratoma (SCT) A tumor occurring at the base of the fetus's tailbone. Mentioned in: Prenatal Surgery and SciQuest were very involved in the development and integration of the combined e-procurement solution. The vendors offered Pace guidance in establishing controls and workflow that ensured that the process of procurement was seamless to the end user," says Seller. "Integration was a bumpy road as the technology was new to Pace, however by introducing both systems at the same time, users were able to adapt to the change at a faster pace." Financial Reporting Another important part of Pace's decision was SciQuest's integration with SunGard SCT Banner Finance software. SciQuest can integrate with any major ERP/financial system, including Oracle, Ariba, SAP, PeopleSoft, and others. "Pace University is in the process of implementing the ERP (Enterprise Resource Planning) An integrated information system that serves all departments within an enterprise. Evolving out of the manufacturing industry, ERP implies the use of packaged software rather than proprietary software written by or for one customer. suite of applications by SunGard SCT Banner (Finance, Student, Human Resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. , and Advancement). The implementation is a multi-year project with the Finance system being the first to go live in July of 2004," says Nicole Thompson-Williams, director of financial information systems. "The university has implemented most of the finance modules at this point and is slated to begin work on the grants and endowments modules in the flail of 2005. With the Banner Finance implementation, Pace integrated the SciQuest Higher Markets solution with a unique scenario in which all purchase orders are electronically issued by the SciQuest software. In addition, effective front-end controls are in place to ensure that budget verification is established prior to an order being processed." The university's procurement history is available in the Banner application for the purposes of reporting, with specific details of transactions being housed in the SciQuest product. "Each application has its strengths and weaknesses," says Thompson-Williams. "Combined, however, Pace has managed to create a solution with the best standard practices across the board. The end-user interface of the SciQuest software is friendly and the university has adapted quickly to its use." E-procurement often allows an institution to negotiate better prices because users are encouraged to do business with an approved list Approved list A list of equities and other investments that a financial institution or mutual fund is allowed to invest in. See: Legal list. approved list See legal list. of vendors. The idea is simple: The more business directed to vendors, the better the prices will be for the end user. Negotiated vendor rates allow an institution to procure the best products or services from the best vendors at the best price. "The Pace University Purchasing and Contracts department has determined much of the current selection of suppliers," notes Ronald Nahum, associate vice president for finance. "The initial goal was to set up supplier contracts that were either negotiated by Pace University or negotiated by the Educational and Institutional Cooperative in order to realize savings from pre-negotiated rates for the purchase of everyday goods. SciQuest's role is to assist in the technical aspect of supplier enablement." The SciQuest Higher Markets suite will also soon include a bidding module, and Pace will review the benefits that the solution offers and determine whether it is appropriate for the school. But just because the e-procurement setup has made dealing with vendors around the country or around the world far easier, that doesn't mean Pace can't maintain its dealings with local vendors. "Pace still does use its traditional suppliers," notes Seifer. "Although many traditional suppliers, such as your morn and pop shops, do not have the technical capability of having a large electronic punch-out catalog. They still have the option of establishing a hosted catalog through a content management tool that SciQuest has created for e-procurement and for those suppliers who have still not embraced the world of technology. Pace still has the ability to order from them through e-procurement without the supplier having an established online catalog. We are constantly looking to add to our vendor list, especially with those who are technologically capable of interfacing with the SciQuest product." Perhaps even more important than efficiency, the e-procurement system has resulted in significant savings for the school. "We are recognizing savings not only on our product prices but also process re-engineering and the saving associated with eliminating inefficient manual tasks," Seifer says. One-Stop Shopping Obviously, with advancements in technology that tie procurement to reporting and financial systems, e-procurement stands to become the true one-stop shopping experience for college and universities. Even if it helps streamline just a portion of the complete supply chain, e-procurement can make overall business processes far easier. There is room for far more scope in any existing university program and it would benefit hundreds, if not thousands, of universities and colleges to take advantage of at least a sliver sliver in wool processing a continuous band of carded and combed wool which has not yet been twisted into yarn. of the supply chain experience and get their exchanges and transactions electronic and within a shareable database. There might well be an effort to either transform the supply chain as it exists in business or to create a new university supply chain system. It would be a system that uses elements of ERP and supply chain management to bind together all the financial and procurement needs, as well as returns and other bothersome processes. And that's a bargain that's hard to ignore. Supply Chain Council www.supply-chain.org The New Supply Chain Universities make scholars, not widgets, and this does not make for an exact fit with the SCOR model, or any supply chain model. Even if it helps streamline just a portion of the complete supply chain, e-procurement can make overall business processes far easier. Resources AcquireX, www.acquirex.com Ariba, www.ariba.com Educational & Institutional Cooperative Service, www.eandi.com Oracle/PeopleSoft, www.oracle.com OrgSupply, www.orgsupply.com SAP, www.sap.com SciQuest, www.sciquest.com SunGard SCT, www.sungardsct.com Robert Malone is a New York-based freelancer who often writes about supply chain management. |
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