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Cost Savings Initiatives

Cost Savings Initiatives. Collaborate…. Many sources for cooperative contracts: State, Higher Ed, E&I, Provista, Horizon Examples: Horizon: Kimball furniture Provista: Bio safety cabinets Shop the contracts: when the contract was negotiated?

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Cost Savings Initiatives

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  1. Cost Savings Initiatives

  2. Collaborate… • Many sources for cooperative contracts: State, Higher Ed, E&I, Provista, Horizon Examples: Horizon: Kimball furniture Provista: Bio safety cabinets • Shop the contracts: when the contract was negotiated? Examples: Fedex: Switched from Higher Ed to E&I, savings 19.75% VWR: Switched from State to E&I, savings 13.8% Office Max: Switched from State to Provista, savings $11k/year on copy paper plus credit rebates.

  3. Talk to your key suppliers • Hot list price reductions How frequently is your hot list being updated? • Item substitutions Example: Office Max identified substitute and alternative products that would save $70/k per year or 7.6% • Voluntary price reductions • Will they forego CPI triggered increases?

  4. Initiatives that may work • Ghost card payments (new $$$) • Are you taking advantage of prompt pay discounts? • Cost per copy program Provides new technology + cost savings Example: .04/copy (owned/leased avg) less: .014/copy (includes toner) less: .01/copy (paper cost) Savings/copy = .016 X 31M copies = $496k/yr cost reduction • What are you doing about rising energy costs?

  5. Initiatives that may work….. • Coordinate bulk purchasing Example: Purell instant hand sanitizer/1200 ml/Grainger (E&I) Catalog price/eacontract price/eaquoted price/100 $104.10 $93.69 $51.01 • Shift users from non-contract to contract Example: Local Guy Brown (E&I) HEWC9732A $352 $279 HEWC4844A $39 $26.42 HEWQ3960A $92 $72.22

  6. Initiatives that may work…. • Review old agreements Example: 2-year old contract for bulk coal rebid to save $18/ton • Energy conservation contracts (ESCOs) Long term savings. 3 step process. Investment grade audit followed by project selectionfollowed by renovation • Use Fedex/UPS ground instead of Air

  7. Initiatives that might work… • Reverse Auctions. • Are you operating a warehouse and do you need to? • Revenue generating opportunities.

  8. Initiatives that may not work… • Outsourcing • Pursuing airline/hotel contracts • Negotiating your own agreement when a coop agreement exists • Reducing buying staff What is the cost savings payoff from a buyers time?

  9. And finally…… • If you’re doing good things and saving money, be sure to tell someone about it. Preferably your boss. • Good news is always welcomed.

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