The university's Business Processes Improvement Committee has reached an agreement with Office Depot to provide commonly used office and computer supplies at a significantly reduced cost for all Hopkins-affiliated entities.
Seen as a "one-stop shopping" opportunity, the new arrangement covers items including pens, folders, paper clips and computer accessories, which can be ordered via the Internet with next-day "desktop" delivery and billed directly through the university's central accounting system.
The projected annual collaborative savings, once all institutions are participating, is $477,000 based on current expenditures.
The agreement with Office Depot, which provides price protection for most items, will be for three years with the option to renew for two additional years. The university and APL plan to implement the program immediately; the health system plans to do so in July 2002.
The agreement will be phased in gradually with full implementation, including a dedicated Hopkins Web site for Office Depot purchasing, expected by Jan. 1, 2001.
At that time, the university expects to also begin using Office Depot as its primary supplier of copy paper.
Candice Dalrymple, chair of the BPIC's Collaborative Purchasing work group, said that although Johns Hopkins institutions were already receiving office supply discounts as high as 52 percent, the work group felt that further enhanced savings and service value could be obtained through the use of a dedicated vendor. The Collaborative Purchasing committee was initially formed by the BPIC in order to identify a number of goods and services that could be purchased as "one gigantic Hopkins contract" instead of through the individual purchasing offices of the university, health system and the Applied Physics Laboratory.
"Not purchasing things together means we aren't leveraging our buying power effectively in the marketplace," said Dalrymple, associate dean of university libraries and director of the Center for Educational Resources at the MSE Library. "We also wanted to make sure that accompanying these better prices we had value-added features that would make it very attractive for the individual person making an office supply order to use this one particular vendor."
Currently, discounts on office supplies range from 45 to 52 percent under separate Johns Hopkins Institutions contracts with three major vendors. Johns Hopkins Institutions spent a combined $2.2 million, factoring in discounts, on office supplies in fiscal year 1999.
The 11-member task force decided to focus its first-year efforts on office supplies, Dalrymple said, because the purchase of these "relatively innocuous" items would not infringe upon the buying freedom of a particular office or individual.
"There were any number of items we could have begun to investigate for cost savings--cell phones, refrigerators, scientific experiment equipment; the list could go on ad infinitum," Dalrymple said. "But we decided, since this was the first time we ever tried to purchase collaboratively, it made very little sense to tackle the more controversial items first because what we might end up doing is getting a great price for a piece of equipment that doesn't serve someone's purpose. For example, an office may have loyalties to certain kinds of fax or copy machines because they contain features and characteristics that are very important to its specific mission."
The Collaborative Purchasing task force includes Dalrymple; Norma Berry, administrative manager, Physics and Astronomy, Krieger School of Arts and Sciences; Paul Beyer, director of the Office of Purchasing, University Administration; Claire Bogdanski, senior administrative manager, Health Policy and Management, School of Public Health; Betty Gibula, director of corporate purchasing, JHH/JHHS; Ken Grant, vice president, General Services, JHH/JHHS; Gerry Hunsicker, administrator, Molecular Biology and Sciences, School of Medicine; Debbie Jackson, associate director of Purchasing, University Administration; James Ruth, purchasing group-BPP, APL; and Mary Rodriguez, administrative assistant, Purchasing, University Administration.
The Business Process Improvement Committee was formed in summer 1999 by President William R. Brody. Chaired by Al Sommer, dean of the School of Public Health, BPIC is a wide-sweeping initiative charged with examining everything about the way the university and health system do business. Other current task forces are examining mail services, travel, financial business practices and administrative training for academic leadership.
After identifying office supplies as its initial target, the Collaborative Purchasing task force in April issued a request for proposal to 21 office supply companies. The submitted proposals were reviewed by a subcommittee of the work group, which subsequently narrowed the list to three vendors.
Dalrymple said it is expected that the new collaborative contract will constitute about 80 percent of JHI office purchases. Hopkins' departments and offices are encouraged to use small, local and minority-owned businesses for the remaining 20 percent of the market share.
"We knew there was no way for these types of businesses to compete on price alone, and we wanted to be fair to them," Dalrymple said.
To assess the impact of the agreement, the purchasing offices of the university, health system and APL will assign staff to monitor purchases made after the implementation of the new contract.
In addition to the increased cost savings, the new contract includes next-day delivery, sales support for each of the JHI entities, special contract pricing at Office Depot's retail stores, contract pricing and desktop delivery for copy paper and Internet ordering and electronic invoicing capability.
"We wanted a way for the ordering system to tie into the bookkeeping system of the university. We felt that was a very important value-added feature," Dalrymple said. "So if you are making an order on the Internet and enter in your account number, the order would then go directly into the university's accounting system. We did not want to have bills coming into the individual offices and paper being shuffled around. Why not just have it done by the automated system immediately?"
With the new contract in place, Dalrymple said the task force has shifted its sights to year two of its existence.
Recommendations for the work group's 2000-2001 period of service are twofold: to determine additional purchases that could be brought into the new collaborative agreement and to aggressively market the financial and administrative benefits of the new contract.
"We understand this constitutes a huge change in behavior on the part of our community. Some offices have long-standing relationships with certain vendors," Dalrymple said. "So it up to us to get the word out on this great deal."
Through this new arrangement, Office Depot will become a participant in the university's Select Vendor Program. Information on the agreement and the program is available at Purchasing Services' Web site www.jhu.edu/~purchasing/.