Corixa betters buy process with hosted e-procurement
Staff -- Purchasing, 6/19/2003 2:00:00 AM
Maverick buying has never been a problem for Corixa, the nine-year-old biotech firm working on immunotherapeutics for treating and preventing cancer, autoimmune and infectious disease by understanding and directing the immune system.
"We've always been good about not having a lot of different people making purchases," says Corixa's purchasing manager Kris Keppeler. "There's never been a dollar cutoff below which a person outside of purchasing could buy and expense something."
But just because purchasing has always handled spending for the company doesn't mean it has always had a good handle on what it's spending.
In all, Corixa has 380 employees working in three locations. Most laboratory research is done at headquarters in Seattle, Wash., while a remote site in South San Francisco, Calif., handles clinical and regulatory work. Keppeler and one senior buyer manage all of the purchasing for the two research sites, while a separate two-person buying team purchases mostly bulk chemicals for the company's small manufacturing facility in Hamilton, Mont.
In the days before Corixa got access to e-procurement and supplier enablement technology through SciQuest, Keppeler says the company's re-searchers and other employees would requisition items using an Excel template that "looked like a requisition form." Requisitioners would fill out the spreadsheets (the rule was one requisition per supplier), save them to their desktops, and then e-mail them to the purchasing department for processing. Once they had created requisitions, researchers or other employees would then store the spreadsheets on their computers, Keppeler says, resending the originals to purchasing when they needed to reorder items.
"Of course, if a product or a part number changed, it never changed on the spreadsheet, which meant we would have to repeat the same corrections over and over, " Keppeler recalls.
The bigger problem, however, was that all the data about how Corixa was spending its dollars were scattered around the company on the computers of individual employees. "There was no way to understand what we were spending in the aggregate," Keppeler says. "It would take me two full days just to prepare our purchasing performance reports."
Fast-forward a few years to when electronic sourcing and procurement burst on to the scene. "Many of our suppliers started to offer ordering capabilities through Web storefronts," Keppeler says. "We took advantage of those, but a company our size could never afford a big enterprise e-procurement system."
Then along came net marketplaces like Chemdex and SciQuest. "These new companies were setting themselves up to compete with traditional distributors," says Keppeler, "but we never really saw them that way. Even from the beginning, we recognized their technology as a way to funnel purchases through a single system so we could better understand what we were buying. We saw them as a way to automate and streamline our purchasing process without paying out huge dollars."
While many net marketplaces, including Chemdex, went the way of the dinosaur, a few, like SciQuest, headquartered in Research Triangle Park, N.C., reinvented themselves along the lines that Keppeler describes.
Instead of trying to get between buyers and suppliers, says Jamie Duke, SciQuest's VP of products, operations and strategy, the company has repositioned itself as a hosted software company serving primarily buying interests with three core offerings:
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"Classic" e-procurement for functions like document routing, workflow, and spend reporting and analysis.
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Supplier enablement, which includes content creation and aggregation, product search capabilities based on SciQuest's proprietary taxonomy for research-intensive life sciences-oriented organizations, transactional support (including POs, order confirmations and payment), plus tools for directing spend to preferred suppliers, and
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Inventory management, which allows a company to receive, track, distribute and dispose of inventory, especially reagents and other proprietary substances.
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For Corixa, which pays an annual licensing fee for the hosted software, SciQuest enables and aggregates suppliers' electronic catalogs and other content and also handles punch-out integrations to suppliers' Web storefronts where needed. Corixa's researchers can search and place orders for such things as lab supplies—Corixa's biggest spend category—and things like computers, maintenance and office supplies.
Where Corixa negotiates contract pricing with particular suppliers, Keppeler says suppliers are responsible for loading relevant data into the SciQuest system. Where buys are either small or rare enough to obviate the need for catalogs, Keppeler can manually load suppliers and their products into the SciQuest system, making them available through the commercial search tool.
Services, according to Keppeler, are the next frontier. "We've already found some ways to do this," she says. "For example, there may be a company that synthesizes specialty genes for Corixa. As long as they have a standard price per base and we can create a specification, we can create a special catalog number so the person who needs to order the service can search and purchase it through SciQuest."
All orders still flow to the purchasing department for approval, Keppeler notes. "SciQuest is where our researchers find what they want and route requisitions to purchasing, which then approves and pushes orders out—through SciQuest—to suppliers."
For the time being, Keppeler notes that purchasing must still manually enter purchase order information into Corixa's enterprise resource planning (ERP) system, which handles such back office functions as accounting, receiving and supplier payment. "We're working now with our IT department to integrate SciQuest with our ERP," Keppeler says. "Instead of feeding the PO data in manually, we going to start feeding it in electronically."
Keppeler uses these detailed reports for activities related to spend control and strategic sourcing. "We've given our researchers fairly broad access to a large database of suppliers and, in some cases, they're able to find better values than we in purchasing have found."
At the same time, however, she notes that purchasing has the ability in SciQuest to decide which suppliers will appear in what order in users' product searches. This helps purchasing direct spending toward negotiated contracts or otherwise preferred suppliers. "If we find that people are routinely purchasing from suppliers who are not preferred or from suppliers we don't want to deal with due to past performance problems, we can make it so the suppliers either do not appear or appear very low in users' product searches," she says.
For the sites she buys for, Keppeler says SciQuest usership is now at 99%-plus, but was high—near 95%—immediately after implementation. Aside from the fact finding requisitioning products is now much easier for end users, Keppeler credits publicity and training for this success rate. People knew it was coming, so even with some grumbling, most people started using it immediately."
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