Being smart with procurement

How having the right suppliers can help higher education institutions reduce their costs and achieve innovation that will attract students

Since the introduction (and subsequent increase) of student tuition fees in 1998, the “business” of higher education in the UK has never been more competitive. A huge priority for universities and colleges around the country is to attract students from both home and abroad so that they can continue to operate as they wish.

The key to attracting enough students for each course to make it viable comes down to three linked areas, according to David Mills, Industry Sector Manager at RS. “First, the employability of students once they graduate is vital,” he says. “Second, innovation and access to technology that will allow the institution to push boundaries with ground-breaking research, which helps enhance both the institution and its students’ reputations. And, finally, the attractiveness of the university to prospective students – from the quality of the buildings to how modern the equipment is in the labs.”

When it comes to innovation and the latest cutting-edge equipment, procurement has an important role to play. It’s essential that labs and workshops are stocked with the latest technology, all in good working order ready for students and research teams to do their work. However, procuring the parts and other consumables to achieve this is often an inefficient and costly process.

Meeting compliance rules
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 purchased 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.

The reality, according to Mills, 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 and Learning Development at the Chartered Institute of Procurement and Supply (CIPS). These are factors that we often see in our annual research with 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,” continues Alder. “Where you have these products going into machines with moving parts, you have potentially very serious consequences if they go wrong.”

Communication is key
Mills 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.”

Mills 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.”

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