Transcript Improving Procurement: A Case Study

Improving Procurement:
A Case Study
by Interflex, Inc.
Topic 1:
Topic 2:
Topic 3:
Topic 4:
Vendors & Product Information …………... p. 3
Forecasting Quantities ………………………… p. 15
Communication with Vendors …………..…. p. 23
Evaluating & Awarding the Bid …………….. p. 31
Method
Interflex has gathered information on the procurement process from operators nationwide via
telephone interviews, online surveys, and bid opportunity and award data.
Four separate online surveys (one for each topic) were distributed to schools across the country.
The number of respondents varied by survey. The average number of responses is 70.
Interflex also interviewed four operators (2 small schools and 2 large cooperatives) via telephone.
This information has been analyzed and the findings are presented here for discussion.
*Note: operators with an enrollment size of >13,000 students were designated as “large” and
those with an enrollment size <13,000 were designated as “small”.
Topic 1: Vendors & Product Information
How do you find the majority of your
product information?
Are you satisfied with the
information?
Other Methods Include:
• Directly from the Vendor
• Sales Visits
• Gathered through a Cooperative
Topic 1: Vendors & Product Information
How do you hear about new products that are available?
Other Methods Include:
• Trade Publications
• Email Blasts
• Directly from the Vendor
Topic 1: Vendors & Product Information
How often are you notified of discontinued or reformulated products?
Of those notified, 75% heard through Distributors, Email or Brokers.
Topic 1: Vendors & Product Information
When products are discontinued are replacement products recommended to you?
Rarely
11%
Yes
14%
Sometimes
32%
No
18%
Usually
25%
Topic 1: Vendors & Product Information
Do you actively check for product changes throughout the year?
Only when
necessary
4%
Reason given for not actively checking for product
changes:
Notification will
be sent to them
11%
Sometimes
9%
No
44%
A message on the
ordering site
notifies them of
product changes
11%
No time
45%
Unsure how to
11%
Yes
43%
Communication
with broker reps
makes it
unnecessary
11%
Only check for
changes if
they are
looking to
make a
change
Topic 1: Vendors & Product Information
How valuable are your interactions with brokers, distributors, and manufacturer sales reps in
regards to finding product information? Do you prefer to be contacted more by brokers,
distributors, or manufacturers? Why?
About 50% of respondents stated
they prefer to work with all industry
partners:
•
•
•
Manufacturers
Distributors
Brokers
Based on those with the best
knowledge of product information
and availability.
Topic 1: Vendors & Product Information
What is the primary reason that you list a product as approved on a specification?
Topic 1: Vendors & Product Information
Do you require samples of non-approved products?
Topic 1: Vendors & Product Information
Do you have taste-tests?
Who is tasting the product?
Topic 1: Vendors & Product Information
How are products rated during taste tests?
25
20
15
10
5
0
Taste
Appearance
Texture
Topic 1: Vendors & Product Information
Are you satisfied with the number of vendors
currently participating on your bids?
If not, how do you find new
vendors and contacts?
Contacting brokers or manufacturers
to see which distributors stock those
items
Yes
75%
No
22%
Eligible vendors are notified of the bid
The bid is posted electronically.
Trade Shows
Vendors contact the school directly
Somewhat
3%
Word of mouth
Topic 1: Vendors & Product Information
Do you have trouble finding new vendors? If yes, why do think this is?
Not sure how to generate
interest in the bid.
No
20%
Commodity processing
vendors are harder to find as
prices rise.
Vendors do not like to deal
with schools
There are limited vendors in
the area
Yes
80%
Location of the school
0
1
2
3
4
5
6
7
Topic 2: Forecasting Quantities
Do you provide quantities on your bid?
Would you ever list a zero and why?
Of those who list zero, reasons why include:
• Difficult to forecast for new products
• Bidding two or more similar products
Topic 2: Forecasting Quantities
How do you come up with your forecasts? What obstacles do you encounter?
Obstacles include:
• Student preference significantly affects usage
• Difficult to plan for upcoming year
• If item isn’t delivered on time, affects usage numbers / storage space
• Menu Changes
• Hard to forecast for Smart Snacks items, find variety kids will eat
Topic 2: Forecasting Quantities
Do you use a menu-planning software? If yes, which software?
inTEAM
Meal Magic
NutriSlice
Health-e Meal Planner
PrimeroEdge
Horizon OneSource
Heartland NutriKids
3%
3%
3%
6%
12%
18%
55%
Topic 2: Forecasting Quantities
Is your menu-planning software helpful
when forecasting quantities?
If you use cycle menus, what is the cycle
length?
More than 6
Weeks
3%
Weekly
1%
Less than 4
Weeks
27%
Yes
44%
No
56%
4-6 Weeks
69%
Topic 2: Forecasting Quantities
How do you forecast for a new product?
Add Addendum to Bid Mid Year
2%
Opinon of Staff
2%
Don’t Forecast
2%
New Product only for replacement
2%
Cooperative Buying Commitment
2%
Make a Low Forecast
3%
Forecast based on product availability
3%
Sample a product then determine
5%
Forecast based on School Size
5%
Forecast based on school ADP
7%
Talk to Other Schools
7%
Taste Test Results
11%
Guessing
13%
Experience with Similar Foods
18%
Menu Cycle x Servings
20%
0%
5%
10%
15%
20%
25%
Topic 2: Forecasting Quantities
When do you update your forecasts?
Topic 2: Forecasting Quantities
How accurate do your forecasted quantities usually turn out to be compared to what you
actually purchase that year?
47%
36%
28%
22%
21%
16%
11%
11%
5%
Too High / Too Low
Forecast
Not Accurate
Fairly Accurate
Large Operators
3%
Accurate Except New
Products or Commodity
Small Operators
Substitutes
Accurate
Topic 2: Forecasting Quantities
Is the forecasted quantity on your bid the only time that you communicate forecasts with your
vendors or do you update them throughout the year?
Topic 3: Communication with Vendors
Do you communicate mostly with brokers, distributors, manufacturers, or a combination?
Topic 3: Communication with Vendors
Are you in communication with
vendors besides those from
whom you purchase?
No
19%
How do you hear about potential vendors in your area?
Visits from Sales
Representatives
16%
Trade
Magazines
4%
Broker
Contacts
6%
Email
Promotions
19%
Sales Calls
10%
Yes
81%
Other School
Professionals
10%
Food Shows
29%
Newsletters
1%
Monthly
Meetings
3%
Foodservice Reward Programs
2%
Topic 3: Communication with Vendors
How often do you communicate with your vendors?
Topic 3: Communication with Vendors
Does the frequency of communication vary over the bid process? When is it most prevalent?
Topic 3: Communication with Vendors
Do you ever get onsite visits from your vendors, not including deliveries?
Topic 3: Communication with Vendors
Do you hold any meetings with your vendors? Are they optional or mandatory?
Mandatory
11%
No
29%
Yes
71%
Optional
89%
Topic 3: Communication with Vendors
Do you feel that the communication happening is sufficient? Why or why not?
Reasons stated for Insufficient
communication:
• Lack of time
• Location of trading partners
Reasons stated for Sufficient communication:
• Issues resolved quickly
• Regular visits
• Getting the information needed
Topic 3: Communication with Vendors
Do you feel your vendors are responsive when issues arise? If not, how can this be improved?
35%
30%
No
3%
25%
Sometimes
23%
20%
15%
10%
Yes
74%
5%
0%
More Delivery
Flexibility
Document All
Increase
Issues
Communication
Award
Alternative
Vendor
Topic 4: Evaluating & Awarding the Bid
Are the vendors usually present when you do your bid opening?
Topic 4: Evaluating & Awarding the Bid
What criteria do you use to evaluate and award your bid?
Topic 4: Evaluating & Awarding the Bid
What challenges do you face when evaluating the bid?
•
Establishing the points system on which evaluation will be based
•
Past negative experiences with a particular vendor.
•
Evaluating a new vendor is a challenge.
•
Verifying that the vendors have bid the correct product.
•
Vendors bidding something other than what was specified on the bid.
•
Knowing the equality of the products/brands
•
When the lowest bidder is not the most reliable bidder.
•
Making sure all products are comparable
•
Vendors bidding pack sizes different than what was specified on the bid.
•
Vendors meeting the schools requirements
•
Having the correct product
•
Vendors not bidding on every item
•
Vendors not understanding the RFP Criteria
•
Responsiveness of vendors
•
When an alternate item is bid without product information
•
School attitudes about vendors
•
When vendors don't follow the bid specs and the school has to convert everything to be comparable.
Topic 4: Evaluating & Awarding the Bid
How do you reach out to distributors when you have questions about their quotes? Are the
distributors receptive to your inquiries?
93% respondents say
the vendors are always
receptive. The other 7%
said they are receptive
after a follow-up.
Topic 4: Evaluating & Awarding the Bid
Is there a group or specific department that handles awarding bids, or do you make
recommendations for the school board?
Recommendations for the bid award
Food Service
Dept &
Business
Manager
4%
Food Service
Dept &
Superintendent
4%
Food Service
& Purchasing
Dept
5%
Food
Service
Director
9%
Business
Managers
4%
Superintendent
4%
Award Decision Made By for Bid
School Board
28.30%
Food Service Director
Co-op Group
Food Service
Dept
48%
Cooperative
Group
22%
26.42%
13.21%
Purchasing Dept
7.55%
Co-op Group & Lead District
3.77%
Procurement Dept
3.77%
All other Responses
16.98%
Topic 4: Evaluating & Awarding the Bid
How long does the evaluation process take?
Topic 4: Evaluating & Awarding the Bid
How much time do you allow between awarding the bid and placing your first order?
12
10
8
6
4
2
0
Right away
1 week
2-3 weeks
4-6 weeks
A month
2 months
3 months
Several
Months
Topic 4: Evaluating & Awarding the Bid
Who do you notify (if anyone) of the award?
The Distributor Sales Rep
2%
3%
The winning
vendor
18%
All bidders
77%
Topic 4: Evaluating & Awarding the Bid
What information do you provide (e.g. only winning quotes, all quotes, etc.)?
Bidders are notified
of the items that
they were awarded.
4%
All quotes are sent
4%
Complete bid
tabulation
18%
Bidders are only
notified of whether
they won or lost.
35%
Only winning items
39%
Topic 4: Evaluating & Awarding the Bid
How do you notify your vendors of the award results?
Letter and Electronic notifications through Interflex
3%
Through County Website
3%
Letter and Electronically
3%
Phone, Email, and Letter
3%
The Cooperative sends the
notification
6%
Letter
36%
Phone call and Letter
6%
Email and Letter
5%
Phone Call and
Email
5%
Electronic
notifications
through
Interflex
8%
Email
22%