Lesson to be had in tactical move

19 April 2000
More news

20 April 2000

New university purchasing plan raises questions about centralised control. David Arminas reports

Open rebellion among university purchasing consortia heads has been averted after a shift in tactics by the Joint Procurement Policy and Strategy Group (JPPSG).

Gone is last year's apparent top-down move towards a more active central purchasing body, in favour of a national contracting protocol, a bottom-up collaborative approach that would assess if there were a business case for a national contract.

"It's inclusive of consortia at all levels," said Douglas Bell, secretary of the Scottish consortium the Joint Consultative Advisory Committee on Purchasing, which drafted the proposals for the JPPSG. "The point is not to take everything through to a national contract, but merely to test the business case for each commodity," he said.

The JPPSG is now considering how to fund the seven protocol pilot schemes for, among other things, paper stocks, lift maintenance, business travel and laboratory supplies. The first pilot is due to start in May.

Any contracts arranged after the protocol process has been conducted would not be binding for the consortia. "The JPPSG is enthusiastic about the protocol idea," said Tom Chadwick, the JPPSG's director of procurement development.

Last October the JPPSG considered a shake-up of higher education procurement after the publication of a report by Douglas Macbeth, professor of supply chain management at the University of Glasgow. Despite written assurances from Sir Graeme Davies, chairman of the JPPSG, that the "group cannot and does not wish to impose an outcome", consortia heads feared that their authority would be weakened.

Those fears were "unfortunate, not intended. I don't think there was ever a central procurement authority being suggested," Chadwick told SM.

"There's more than one way to skin a cat," said Karen Watson, head of purchasing at Nottingham TrentUniversity and chair of the Association of University Purchasing Officers. "There's a lot more co-operation now. The difference is there is no threat to the consortia.

"The move is an admission that the seven consortia are good at what they do. It won't require huge change management within them," she added.

The new approach injects a much-needed dose of reality into the JPPSG's dream of "big money equals big savings", explained Watson. Often it is a supposedly small factor, such as delivery time, that determines whether an institution joins in on a national deal that has been hammered out by consortia, she said.

Steps towards setting up centralised purchasing bodies have been seen as positive for government departments and many companies with previously disparate procurement agencies. But how much authority can and should these central bodies have to impose contracts, suppliers and spending methods across their organisations?

Critical report

Last year the JPPSG was chanting the government's "collaborate to save money" mantra. A 1999 National Audit Office (NAO) report said that £42 million was saved within the universities sector in 1996/97. But this was only 1.3 per cent of the total non-pay spend of £3.2 billion. It could be better, said the NAO, which believed savings of 5 per cent were possible.

In the report, the NAO also said that universities needed to make better use of consortia and that more national deals could avoid consortia overlap.

That the university consortia perceived dictatorial authority in the JPPSG's proposals should not be lost on other organisations setting about changing their procurement structure.

"We didn't need the big stick that the JPPSG was talking about waving," said Paul Tomany, head of the North Western Universities' Purchasing Consortium (NWUPC). "The original report had the feeling of top-down. It was something like the Office of Government Commerce."

Tomany believes a bottom-up approach, as adopted by the NWUPC, is more compatible with the culture of the higher education sector.

The success of the National Universities' Working Party on Electrical Components (Nuwpec) is a case in point. Set up seven years ago to handle stock laboratory equipment, it owes its success to its composition, according to its chairman David Johnson. The consortium has 16 members: a purchaser and technician from each of the seven university consortia, the head of the JPPSG and a secretary.

Having encouraged its suppliers, Farnell and Combined Precision Components, to work together, Nuwpec made savings of £180,000 between last autumn and February this year.

The suppliers' catalogues are available on the university and research institute intranet, the Joint Academic Network, or Janet, ordering takes place via just one e-mail address and goods are delivered the following day.

Johnson and Tomany agreed that, while universities are all similar as teaching and research organisations, they have very different needs.

Watson, too, acknowledged that you can't please everybody: "Some of the purchasers in the institutions are now concerned it is the consortia that are getting too big."

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