CONTRACT PURCHASING CASE STUDY

Description Re-write and Agreement Development

Purchasing Services Co. (PSC) was contracted by a Steel Manufacturer to assist in the renewal of their numerous Blanket Purchase Orders and the establishment of new orders.  The company was consolidating the purchasing functions of their various sites to one home office location which would be responsible for all buying.  Their original concept was to have four temporary buyers for a six-month period at their site.  PSC suggested that the project be managed by the PSC in-house staff.  PSC provided consulting on the best methods of purchasing, met with the client, and then proceeded with the assignment.

PSC had total responsibility of editing and verifying part numbers and descriptions, consolidating commodities, issuing Requests for Quote, creating comparative bid spreadsheets, and building blanket orders.  We worked very closely with our client's buyers, in essence becoming the liaison between buyer and vendor during this process.  We also dealt with delicate political situations as work was being transferred from the sites to a central location.  Any questions the vendors had concerning the Requests for Quote were handled by PSC.  Our extensive involvement in all the phases of this project freed the Buyers to more efficiently handle their many other day-to-day duties.  The steel manufacturer realized significant savings due to the quoting process, consolidating, and volume pricing breaks.  To resolve parts that could not be identified from the old descriptions, we went to the mills to look at the actual parts.  This resolved thousands of parts that were not purchasable as described.  In addition, hundreds of parts were moved from replacement parts to generic to allow major cost reductions and eliminate availability issues.

We processed over 30,000 line items for multiple sites.  The mills' raw data was downloaded from their mainframe computer systems into PSC's computer system.  We wrote special software to load the data, edit the descriptions, return the finished items, and build agreements.  This eliminated the need for any data entry by our client.

Having good descriptions, meant suppliers knew the items could easily be purchased elsewhere, and therefore remained competitive.

We developed custom software and interfaces to their computer system, staffed the project with existing and new personnel, and provided project management.  This allowed our customer's buyers to complete their daily functions while overseeing the conversion project work being done by PSC.