National Purchasing Program Guide
National Purchasing Program Guide
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This 7 page was uploaded by Sami Smith on Tuesday March 18, 2014. The belongs to a course at University of California - Los Angeles taught by a professor in Fall. Since its upload, it has received 131 views.
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Date Created: 03/18/14
l h f 1 L National Purchasing Program Guide 1 alpha M Contents Squot39 S t Executive Summary Overview of Savings Opportunity The NPP Process Tracking and Reporting Industry Research and Case Studies Roles Involved in the NPP Process Appendix a List of Initiatives and Expected Savings b Reports and Details for Active Initiatives c List of Attached Documentation 422013 Page 1 jalpha T Executive Summary The AlphaGraphics National Purchasing Program NPP was begun in fall of 2012 with the specific goal of saving AlphaGraphics business centers an average of 3 or better on expenses including cost of goods sublet work equipment purchases and operating expenses where applicable The methods established to achieve this include Gathering baseline data from AlphaGraphics Business Centers to determine what products and services they are buying from whom for how much money and on what terms Using that baseline data the program then seeks to determine the best situation present in the network and from that to request an improved situation for all business centers Key vendors would then be identified and approached with the opportunity to bid on the national program Negotiations would work to drive these bids toward the best possible improvement to national pricing and service The winning bids would be rolled out to the AlphaGraphics network monitored closely and reviewed at least annually The NPP will be operated primarily by the National Purchasing and Vendor Relations teams at AlphaGraphics Inc under the review of the Executive Team The National Purchasing Program Guide will act as a process manual with updated reporting attached in the guide appendix The reporting attached in the appendix will include research notes RFPs bids summaries and program rollout tracking for each NPP initiative 422013 Page 2 jalphagraphicsw Overview of Savings Opportunity Below we have identified areas of expense from a typical 1MMyr AlphaGraphics Business Center noting those areas addressable by the NPP Calculating this against baseline data already gathered and bids submitted anticipates savings in excess of 30k per year per centen Elil Sales 1057 100 Materials 550 52 YES Labor 335 32 Advertising 22 2 Occupancy 70 7 Copier Expense 47 4 YES Franchise Fee Q 3 EBITDA 111 11 T 596k of addressable spend with 5 to 7 savings 30 to 42k per year savings opportunity 422013 Page 3 jalphagraphicsm The NPP Process Timeline and Components 1 Establishing the Baseline For each initiative the NPP seeks to determine What products and service are being purchased regularly by the AlphaGraphics Network In what quantity these things are being purchased How often these purchases take place From which vendors these products and services are being purchased Pricing for these things in all relevant categories And the terms offered by the vendors involved The method for going about this will vary depending on the initiative but should most often include Surveys asking for quantifiable consistent and comparable data usually in spreadsheet form sent out via the Operating Partners Conversations with a purchasing focus group and NLC members Review of any related existing or expired contracts on file 2 Kickoff Once the baseline has been defined the NPP will identify potential suppliers This information can be gathered from the baseline survey industry resources and existing vendor relationships For larger categories the NPP will prequalify bidders with a Request for Information and hold a kickoff meeting in person conference or webinar 422013 Page 4 jalpha T It is important to keep the process open and competitive process and to reinforce this fact with all involved Questions asked by one vendor should be shared with all vendors excluding the asker s name so that everyone can see the answer reinforcing that there isn39t a predetermined winner 3 Request for Proposal RFPs will be created and submitted to qualified bidders These RFPs will include A cover letter describing the NPP program 0 Instructions for submitting a concise proposal A standardized bidding template focused on pricing The instructions and bidding template will specifically ask for quantifiable pricing data to reinforce that this is a competitive process and that only competitive proposals will be given the opportunity to pitch their goods service to the company This specificity will also help to ruleout bulky and irrelevant marketing packets The more vendors we have competing the better the price The NPP should even consider alternative supply chain scenarios 4 Negotiation Once all of the bids have been returned several rounds of negotiation should take place to drive the pricing and value proposition in a more advantageous direction The NPP team should use proposals against one another Vendor proposals are full of good information that can be used to push other vendors to a better value proposition If one vendor offers better pricing or terms the others should be encouraged to do so as well when being given feedback about their goods or services 5 Award and Rollout After a few rounds of negotiations it should be clear which vendor or sets of vendors have the best value proposition The NPP award and rollout process will follow these steps to bring the initiative to the AlphaGraphics Network 1 Notify competing vendors of the winner 2 Draft an Operating Agreement in which commitments from both sides are spelled out and including the details of the offer that will be presented to the franchise network 422013 Page 5 jalpha T 3 Collect a roster from awarded vendors showing which AlphaGraphics centers are already doing business with them vs centers within their service areas that are not yet doing business with them 4 Call select centers within each area which aren39t already doing business with the awarded vendor to discuss past objections and whether the pricing is enough of a reason to move If they have additional objections consult with vendor to address and overcome those Bolster the Operating Agreement s Vendor Commitment statement with this information 5 Work with vendor to develop an incredibly simple new account process that will make it as easy as possible for centers to switch to the awarded vendors 6 Announce program overview via Network Wire 7 Contact business centers within vendors areas if not networkwide with specific details of the appropriate vendor39s pricing and or rebate plan Present Vendor Commitment as part of value proposition as well as introductions and new account nextsteps Vendors will potentially present to owners groups within their regions 9 Vendors will send samples to centers not yet using their services and will report back to AGI on sales efforts to those locations 10 Review with awarded vendors biweekly at first and then monthly on any new business or volume increases Identify centers that have not made the switch 11 Contact centers who have not switched over continue to eliminate objectives where possible and record details to be discussed with vendor in ongoing reviews 12 Maintain a document that details ideal vendor behavior and work with vendors to adjust to this or identify alternate vendors where applicable 13 At appropriate point if applicable work with vendor to negotiate additional price cuts or rebates further up the supply stream example paper distributors will help secure rebates for franchises from the paper mills 14 Rebid annually 9 422013 Page 6
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