Letter from John Pepper: Procurement Improvement Program

Dear Colleagues,

I’m writing to update you on our Procurement Improvement Program and ask for your participation to enable it to save you more money and provide you better service.

Procurement savings represent by far the most significant means for cutting expenses in ways that will allow us to support our program needs and have a balanced budget. We spend over half a billion dollars per year on non-salary goods and services. More than a year ago, after considerable study, we set a medium-term goal of achieving savings of $25-30 million per year. We got off to a good start last year with savings of over $5 million; this year we’re shooting for an additional $7+ million. Here are the keys to making further progress in which we ask for your participation:

1. Consult and partner with Purchasing Services early in your major expenditures. The purpose is simple – take advantage of the savings that will come from competition and from our institutional volume. We have already saved over $600,000 this fiscal year by coordinating facilities maintenance agreements. With the encouragement of Pat Nolan in MB&B, we launched a program to consolidate lab equipment purchases. It has been remarkably successful, with savings already of tens of thousands of dollars

2. Increase your understanding of our Procurement Improvement Program. Procurement offers on-site courses on "Strategic Sourcing" which teach any member of our buying community how to be a "smart" purchaser. Over 150 people have attended this training, representing 45 departments. They have given it high marks. You can learn more at http://www.yale.edu/procurement/buildingcapabilities .

3. Adopt Yale’s new eProcurement solution (SciQuest), Expense Management System and the improvements to Travel Services to save significant time and money. The Yale community participated in pilot programs for these solutions and early experience has been very positive. They are now ready to be rolled out campus-wide.

Yale’s eProcurement Solution: This new buying solution features a shopping environment containing over one million items from more than 60 suppliers with Yale contract pricing. It will bring three major benefits: 1) It dramatically reduces the time from "needs" to "delivery" by automating the buying process and provides leverage to negotiate better contracts; 2) It makes it easier for users to identify the lowest cost for the items they need; and 3) Compared to other procurement approaches (e.g., VIP phone ordering), it will dramatically decrease bounces, holds, JSA’s and cost transfers due to the upfront collection and validation of charging instructions. Reducing the need for cost transfers is especially important to improving compliance with federal regulations.

The University has a goal of bringing 80% of Departments on board by fiscal year-end. For more information and to read a representative group of testimonials, visit http://www.yale.edu/procurement/eprocurement/. Procurement will be sending a communication on the steps involved to get a department into SciQuest.

Yale’s Expense Management System: We have expanded our Purchasing Card program to allow faculty and staff to use the p-card for travel-related expenses. The paper-based expense reimbursement process and monthly procurement card statements are being replaced with a new web-based tool that allows you to enter your expense report and route it for approval electronically. These initiatives are resulting in faster cash reimbursements, less out-of-pocket expenses for travelers and a more productive process for reporting and approving travel expenses and miscellaneous supply purchases. You can view a summary of these upcoming improvements at http://www.yale.edu/oboe/aeo/EMSOverview.pdf

Improvements to Travel Services: Based on the suggestions of travelers and travel arrangers, we began an initiative to lower travel costs, simplify policies and improve the travel experience for those traveling on Yale business. A team has been working with departments to pilot a new on-line and full service travel agency approach, using Orbitz for Business. What we are learning from the departments taking part in our pilot is proving invaluable as we look to roll out a full implementation to the Yale community. You will hear more about this in the coming months, and I believe the end product will be simple to use and well connected to our existing business practices in business offices. For more information please visit http://www.yale.edu/travel/

A coordinated deployment team will be contacting your Business Office to discuss specific deployment plans over the next weeks and months.

These key areas are critical to the success of our institution-wide procurement improvement program. Thank you for your support.

John E. Pepper, Jr.
Vice President for Finance & Administration