Cost Savings Initiatives

1
Cost Savings Initiatives
2
Collaborate

• Many sources for cooperative contracts State,
  Higher Ed, EI, 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 EI, savings 19.75
• VWR
  Switched from State to EI, 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 (EI)
• Catalog price/ea contract price/ea quoted
  price/100
• 104.10 93.69
  51.01
• Shift users from non-contract to contract
• Example Local Guy Brown (EI)
• 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 selection
  followed 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 youre doing good things and saving money, be
  sure to tell someone about it.
• Preferably your boss.
• Good news is always welcomed.