Supply Chain Brain - July/August 2011

SADDLE CREEK
CORPORATION

‘They execute the day-to-day at a high level and collaborate with us on cost-savings and process-improvement opportunities.’ ‘This company has a broad band of capabilities and executes to perfection including the highest levels of customer service.’ ‘Consistent, performing suppliers that are very supportive at an operational and corporate level working with our company.’

SEEBURGER

‘Their business integration software and services have been a significant value-add for our global EDI/B2B strategy.’ ‘They offer products that make it easy to exchange data electronically with customers in many different formats, and are very cus-tomizable.’

work. Leisten claims that some SciQuest customers have reduced their write-to-order time to less than a day.

SciQuest spread the word in an educational webinar with Stanford University, in which it demonstrated the use of the software and highlighted its advantages. At the University of Colorado, Hicks got into the act by producing a two-minute infomercial, which she posted on the Procurement Service Center’s homepage ( www.cu.edu/psc).

The program was coordinated with the May pilot launch of the CU Marketplace, involving five major departments. Eventually, the university intends to deploy SciQuest throughout its campuses in Boulder, Colorado Springs, Denver and the Anschutz Medical Campus in Aurora. The system will be linked directly to CU’s enterprise resource planning system from PeopleSoft, guaranteeing that spend data is instantly accessible by the financial department.

The university’s previous system involved the use of procurement cards with a $5,000-per-transaction limit. It does about $100m of business annually under that program. Total spend is around $550m a year.

Tracking Compliance

The ease of policing spend depends on the items involved. Office suppliers are easy to track, information-technology peripherals more difficult. Hicks says the university has seen fairly good compliance with its purchasing directives, even under the old system, but there’s plenty of room for improvement. It’s especially vital to rein in rogue spend where large-dollar contracts are involved. CU can’t negotiate better terms unless it knows exactly how much its staff is spending with each certified supplier. At a time of budget crunches and soaring educational costs, buying against contract becomes crucial.

The level of compliance will always vary with the commodity, but Hicks believes she can hit an average target of around 85 percent. Leisten has seen educational institutions go from 20 or 30 percent to as high as 90 percent with adoption of the SciQuest tool. But implementation across an entire institution can be tough, he acknowledges. “When you roll out a project of this size, it’s like herding cats. Some departments are ready, others aren’t.” Maximum compliance from the very start is almost impossible to achieve, he says.

Hicks expects all departments at CU to go live on August 1. After that, she plans to install a solicitations and contracts module for even better control over supplier selection and negotiation. That portion of the system should be in place by the end of this year, or early in 2012.

The next step is likely to be a revamping of CU’s payment process, which isn’t as mature as the purchasing side. In January 2011, Leisten notes, SciQuest acquired an information-management system that will help users to qualify and on-board suppliers. Customers in higher education have already expressed interest in the enhancement.

Hicks says SciQuest welcomes feedback from customers as a means of developing optimal systems. She expects to be talking to the vendor about acquiring new functionality over the summer. “We will definitely be an active customer,” she says.