In an evolving marketplace with several national challenges directly impacting procurement, supply chain, and sourcing functions, more and more of these teams are being looped in to solve the largest organizational obstacles. Examples include assisting HR with talent shortage solutions and working with IT stakeholders on virtual course innovations at their colleges and universities.
With growing responsibilities and leaner-than-ever teams, procurement professionals are stepping up to help their school or agency overcome major challenges and stay competitive all while completing even more bids, RFPs, and managing day-to-day operations. Those that are succeeding in strengthening their strategy while making an impact on the overall organization are leveraging cooperative contracts to meet and exceed their goals.
A proven best practice in the higher education space, utilizing a cooperative purchasing organization opens the door to more value, time, and cost savings for procurement teams, and as a result, elevates their role at the organization.
Let's explore how a major university system is leveraging cooperative purchasing.
Meet UCSD’s Strategic Sourcing Senior Manager
Currently experiencing success through a cooperative partnership is Greg Muller, Senior Manager of Strategic Sourcing at the University of California (UC) San Diego, an OMNIA Partners participating agency.
Muller oversees a team that focuses on high-risk and high-value purchases, managing RFP solicitations, the technology to perform those bids, and the implementation of new suppliers and their content. With over a decade of experience in sourcing and procurement as a buyer, merchant, and business leader, Muller expects cooperative purchasing organizations to continue to play a key role in the future of the industry.
“As long as spend growth continues to outpace budget growth, institutions like ours will look for ways to leverage our time and be more effective with less,” says Muller. “This includes taking advantage of a selection of purchasing options with cooperatives as much as employing technological solutions to multiply our efforts and streamline processes.”
As a Research 1 (R1) university, UC San Diego has a considerable amount of spend that falls into research classifications, and Muller’s team constantly allocates resources where they can have the most impact.
“From $150 million in Life Science spend to the purchase of ocean research vessels that will navigate the globe,” says Muller. “It’s amazing to see the reach of those purchases. I love the variety of new challenges and getting to work with the most interesting, enjoyable people in the world.”
Muller and his team work in tandem with the UC Office of the President and have been closely involved in the largest bids that UC leads. This lets them drive the ideal outcome and set a successful contract negotiation with their largest strategic suppliers. With an approach focused on strategic future growth, Muller has been able to utilize cooperative purchasing organizations to drive significant impacts and savings for UC San Diego.
“Over the past year, UC San Diego has spent millions of dollars on cooperative contracts,” says Muller. “And while the largest of those contracted suppliers provide a lot of value, I think it’s the smaller ones that really save us time in reviewing requisitions and searching for materials. Using those additional contracts that otherwise would have required significant time invested in the sourcing process opens a wide variety of shopping options.”
Problem-Solving with Cooperative Purchasing
Procurement leaders in schools, agencies, and organizations benefit from the robust buying power and leverage of cooperative contracts that are already competitively solicited and awarded by another public agency. This is made possible through the lead agency model used by some of the most elite procurement teams in the nation, including the University of California (UC). UC lead agency contracts are awarded by the UC system and made available through OMNIA Partners.
Purchasing through the cooperative’s lead agency contracts with maximum value, transparency, and compliance allows higher education institutions and public agencies the ability to focus on other projects and opportunities that add value. Some of these value-adds may include transitioning the procurement department to a more strategic and agile mindset and streamlining processes.
“Having the ability to choose from a long list of available contracts helps us manage tail spend by not having to run our own bid for every single large expenditure, of which there are many,” says Muller. “We can leverage existing terms and conditions from the cooperative and use their established pricing as a benchmark. That lets the commodity managers focus time on projects with a larger potential for creating value through lower pricing or improved service.”
Recently, Muller and his team needed a new competitively solicited contract for medical and surgical goods. He explains that anyone familiar with this category knows the pricing schemes, access to goods, and the rostering process is often convoluted, difficult to navigate, lacks transparency, and can leave customers without products they need or unsure if they received a fair price.
“The leverage of a cooperative bid brought the major suppliers to the table, something they may not have done otherwise given our spend level,” says Muller. “We ran a successful bid that resulted in two contracts, one with Henry Schein and the other with Medline. These are now available, not just to UC but to institutions across the U.S. who aren’t affiliated with a hospital and don’t have the benefit of large medical spend leverage.”
Cooperatives equip procurement teams with subject matter experts in multiple categories to ensure they have all the insight needed to make informed purchasing decisions.
Transforming the Procurement & Cooperative Partnership
In a time when agility and adaptability have never been more crucial, a cooperative purchasing organization is proving to be the powerful partner many organizations rely on during times of uncertainty. Not only an expert in market analysis and strong supplier relationships, the cooperative is a trusted advisor and teammate focused on each institution’s unique spend needs.