Much of procurement in higher education involves requests for proposals with stringent rules and regulations that match institutional policies. While areas like competitive sourcing, supplier diversity, equal opportunity, and fairness may not be negotiable, there are other areas where flexibility can produce better outcomes for both buyers and sellers.
A McKinsey study across multiple sectors revealed that organizations that regularly collaborate with suppliers reported lower operating costs and better results than those that did not.
There are several factors at play here, not the least of which is time. Procurement teams handle a high volume of transactions, and it can be challenging to develop supplier relationships beyond transactions, especially when negotiating new procurement contracts.
There are often rigid guidelines in place, which procurement teams do not have the authority to alter. This can create an almost adversarial relationship that focuses solely on cost. Yet, this negates the potential value a supplier may bring beyond price.
McKinsey also identified five key areas that help fuel collaboration and create better procurement contracts.
The process of creating win-win agreements starts at the earliest stages of procurement to provide suppliers with the information they need. By cataloging both the scope of procurement needs and the frequency of purchasing, you can help suppliers find economies of scale that can result in greater savings.
A clear definition of the procurement process, its parameters, and how decisions will be made helps provide transparency in the process. Being open to feedback on requests from potential suppliers can also help craft better RFPs and result in a more valuable procurement contract.
Other strategies include:
Not every contract needs to be a drawn-out process. Many purchases are simply transactional. In that case, finding the best price for the quality goods or services you need may be less labor-intensive. As a member of E&I Cooperative Services®, you have access to hundreds of competitively solicited, ready-to-use contracts exclusively for the education sector.
Leveraging the bulk buying power of its 6,000+ members, E&I generally gets better pricing and more favorable terms than most higher education institutions can negotiate on their own. Costs, terms, and conditions are all transparent, fostering accountability and making decision-making easier. This can accelerate purchasing and lower costs, freeing up procurement teams to work on higher-value agreements and collaborate more closely with suppliers.
Discover the benefits of becoming an E&I Cooperative Services member and see how you can streamline your procurement process, lower costs, and create win-win contracts with suppliers. There is no cost to membership and no obligation.