eprocurement @penn impact on economic inclusion ralph maier director of purchasing services october...
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eProcurement @Penn Impact on Economic Inclusion
Ralph Maier
Director of Purchasing ServicesOctober 4, 2005
Purchasing Business Objectives
Enhance the buying experience for faculty and staff
Increase utilization of approved buying methods Increase adoption of strategic business partners
and preferred contract suppliers Reduce maverick buying and associated risk to
the institution Leverage buying power to produce significant
financial Return-on-Investment (ROI)
eProcurement Business Objectives
Sourcing Leverage the approved supplier base and buying
power to reduce cost of products and services Technology
Leverage Penn's investment in administrative technologies
Enable suppliers for participation in the campus wide electronic purchase-to-pay system
Inclusion Provide business opportunities for local community
based and diversity suppliers
eProcurement Technology Overview
Campus wide electronic purchase-to-pay system Oracle Financials (>1,800 users)
Electronic marketplace for online supplier catalogs The Penn Marketplace hosted by SciQuest
Electronic distribution of purchase orders and supplier invoices Electronic Data Interchange (EDI), auto fax &
document imaging Online competitive bidding (reverse auction) Electronic invoice settlement
Electronic funds transfer and P-Card invoice settlement
Oracle Purchasing System
Provides point-of-demand ordering for authorized faculty and staff
Delegated order creation and final approval for orders <$5,000 to over 1,800 system users Requires suppliers to be in the approved supplier
database All purchase orders are transmitted to suppliers
via auto-fax or electronic data interchange (EDI) At a minimum, suppliers must be able to receive fax
orders Suppliers must plan for a future of electronic
document transition and electronic invoicing
The Penn Marketplace
Penn’s private supplier exchange >5M products available from 134 of Penn’s contract
and preferred suppliers Supplier catalog content hosted by SciQuest
Incorporated, a Penn eBusiness technology
business partner Requires the development and management of
electronic catalog content Punch-out to Penn specific supplier web sites is
preferred for high volume and/or high turnover commodities
Competitive advantage for participating suppliers
Supplier Enablement Goals
Enable high volume commodity suppliers as well as School & Center specific suppliers
Target a wide range of product and service commodities
Enable a combination of hosted and punch-out supplier catalogs
Drive compliance and increase market share to participating suppliers
Rationalize supplier base to promote sole source supplier relationships when appropriate
Achieve a Penn Marketplace supplier utilization rate of 65% (percentage of all PO supplier transactions)
Maintain a diversity supplier inclusion rate of 20%
Supplier Enablement Strategy
Provide maximize value to the buying community by targeting suppliers for all major commodities
Initial focus on Penn’s high transaction volume suppliers
Recruitment activity also targeted “mission critical” suppliers Mission critical suppliers School or Center specific commodity suppliers
Ensure local community and diversity inclusion in the supplier enablement process
Community & Diversity Inclusion
Challenge for most small and diversity suppliers Gap between Penn’s eBusiness technology
requirements and supplier capabilities continued to widen
Required innovative approach to community and diversity supplier enablement
Basis for a partnership between Penn and SciQuest for the Diversity Supplier Manager Project
Diversity Supplier Manager Project
Partnership launched in July 2004 Penn was SciQuest’s 1st DSM customer
SciQuest to provide supplier specific training and content development assistance to targeted suppliers Penn assumed cost for supplier specific training Target of five new suppliers per fiscal year Suppliers to develop skills to assume responsibility
after one year Five Phase I suppliers successfully enabled in FY
2005 Details available at:
www.purchasing.upenn.edu/buytools/div_manager.php
Impact on Diversity Inclusion
26 of the 134 Penn Marketplace suppliers are diversity and/or local community based suppliers Highest diversity supplier inclusion rate of any SciQuest
eProcurement customer in higher education Most of the suppliers have realized a significant
increase in business during the 1st year in the Penn Marketplace
New business opportunity for some suppliers Participating suppliers have been able to leverage
their Penn Marketplace involvement with other SciQuest customers in higher education and the private sector
New partnership with the Pennsylvania Minority Business Development Council (PA MBDC) for additional supplier qualification
Next Steps!
Suppliers interested in establishing a new or expanding an existing business relationship with Penn should visit the following web sites for information on Purchasing at Penn: Penn Purchasing Service Web Site
www.purchasing.upenn.edu Penn Supplier Diversity Program Web Site
www.purchasing.upenn.edu/supplierdiversity Doing Business at Penn
www.purchasing.upenn.edu/for_suppliers Contact Purchasing Services by e-mail for next
steps
Ralph MaierUniversity of PennsylvaniaDirector of Purchasing Services
E-Mail: [email protected]: www.purchasing.upenn.edu