This scenario is common to many organizations; how can we control the procurement process and get staff to purchase the right product from the right supplier? Sure, they may think that going down the road to the local shop is the quickest and cheapest solution and on the face of it, it can be from... their point of view. However, the back-end processing of the transactions, (be it an expense claim or, worse, a non-catalogue text only line item) became very difficult to code against. It also doesn't help the buyers when they go to negotiate to price with suppliers, as the information on what was purchased is hidden in a descriptive text.
In the case of this hospital, they knew they had some work to do to not only change the buying process but to provide a concise, easy to use process for their staff. Ideally, they wanted the staff to use iProcurement or their bar-code scanning solution to request product, and for that request to be automatically sourced from a supplier with whom they have an agreement. In doing so, they would remove the need to autocreate Purchase Orders manually.
So, what were the tasks required to get them to the stage of providing a solution that worked for an organization as a whole?
The key starting point was to look at non-stocked items. They knew they would have to look at inventory items eventually as well, which would involve myriad issues around Units of Measure, Stock levels and average costs. That was a battle (and another story) for another day.
To start with, they remove duplicate and obsolete items. This was a long labor-intensive task but was made easier by using the More4Apps Item Wizard to download their entire Item Master, Obsolete, Duplicate and Inactive Obsolete items. Once they had this spreadsheet, it was a straightforward process to update the changes quickly and easily with the Item Wizard's Excel environment.
Next, they had a look at why the users were making so many non-catalog purchases. They found that a lot of the purchases were because they couldn't find what they were looking for - or in some cases didn't try... partially because of the lack of success in the past.
There were two stages to this solution. The first was to make non-catalog requests use a valid category and go through an approval hierarchy to a high-level manager for approval.
The second was to improve ordering accuracy and efficiency by cleaning up their blanket agreements. First, they downloaded their old agreements, then using an Excel vLookup function swapped out any duplicate items for the actual Item number. Next step was to upload the Blanket Agreements via the PO Wizard in validate mode. This was a quick and easy way to weed out the obsolete items and to make sure the duplicate item issue had been resolved. Any obsolete items were automatically marked as inactive on the spreadsheet.
Finally, when happy with the data changes, they loaded all the item description changes using the Item Wizard, followed by the PO Wizard to re-created their Blanket Purchase Orders.
These changes made a huge impact to the business. Previously they had over 50% of all requisitions being non-catalog. This number reduced to a more acceptable 15% within 6 months. What's really great is they did this themselves, they didn't need any consultants to help them out. No SQL scripts or technical expertise needed - just two Wizards from More4Apps and an eye for cleaning up data.
This process change has led to a stronger position with suppliers, providing the hospital with a better negotiating position and saving the organization a significant amount of money.
Another win was that they reduced the offline time of their key Blanket Purchase Orders. This is key in an organization with over 1000 requisitioners and at least 500 created per day. When they manually update the blanket using the user forms it would take the Blanket Agreement offline (Setting status to Requires Re-approval). This would force all the requisition line items normally associated with the Blanket Agreement to autocreate pool, meaning the buyers would need to manually create the Blanket Releases from Requisition.
In the end, with PO Wizard the Blanket Agreements were offline for less than 2 minutes, rather than 2-3 hours per day. The buyers were appreciative of reclaiming their evenings as they had previously opted to work late so as to reduce interruptions for other users.
The Hospital has continued to work with More4Apps in refining other processes within their Procure to Pay area.