Supplier relationships prove invaluable to purchasing at UNICCO Service Co.
E-procurement software helps buyers consolidate the supply base
By Staff -- Purchasing, 7/14/2007 6:00:00 AM
Purchasing professionals at Fortune 500 companies like to say they are working to get suppliers involved in their operations. And, for many, that's so. But it's also something that purchasing pros at companies that don't make the Fortune 500 are doing, and nowhere could this be more true than at UNICCO Service Co. in Newton, Mass. For the facilities services company, suppliers truly are an extension of the operation.
Tony Aniello is the purchasing director at UNICCO, which has a corporate purchasing operation at the company's headquarters outside Boston. Purchasing is part of a shared services group and works closely with the accounts payable (AP) operation. Working with Aniello are commodity managers Greg Zifcak, Jeff Malin and George Doolin; each manages several categories of spending including janitorial supplies, uniforms, office supplies and mechanical supplies.
Purchasing considers consolidating the supply base to be one of its biggest challenges. Many of UNICCO's employees at its locations in North America consider themselves "buyers" and routinely place orders with suppliers directly.
To exert more control over the buying process, purchasing formed a cross-functional team in 2002 to select an e-procurement system. The new tool would also help track spending and aid in purchasing's efforts to comply with terms of national contracts with suppliers.
"You can have the best agreement in the world, but someone has to use it [to see any benefit]," says Doolin, who spoke of his company's purchasing activities at the National Association of Procurement and Payables professionals' (NAPP) 15th annual conference.
With executive support, the cross-functional team went through a strategic sourcing process and ultimately selected ePlus of Herndon, Va., to provide the e-procurement software. Among the reasons for the team selecting the tool: ease of use (to place orders) and a robust workflow (including budgeting and approval) process.
 Purchasing breaks out the company’s annual spending into three big categories. Administrative includes HR benefits; subcontractors include maintenance, landscaping and other services; and materials includes janitorial supplies. |
UNICCO began to use the ePlus tool in December 2003. It's set up so that when buyers place orders for items, the system "punches out" to many of its preferred suppliers' websites including those that provide the company with janitorial supplies, office supplies, uniforms and electrical items. To minimize travel costs during training, buyers were trained on use of the tool via a CD, which features screen shots of the entire process, with voice-over on how the system works.
For orders of less than $1,000, UNICCO has issued employees purchasing cards. The company uses the GE MasterCard and its v-payment tool with some suppliers. "We don't want to have to process transactions for miscellaneous items," says Doolin. "We are working to streamline the AP process and the card helps tremendously."
Janitorial supplies is one of the first categories for which purchasing uses data generated by the e-procurement tool to better manage the spend. Before UNICCO began using the tool, the company was buying janitorial supplies through 150 suppliers. Now, purchasing has negotiated national agreements with just two distributor suppliers.
For its janitorial chemicals spend, purchasing has negotiated an agreement with a manufacturer supplier that provides materials to UNICCO locations through the distributors.
Having just one chemicals supplier helps with training, risk management and safety efforts. The supplier also is an important part of the company's GreenClean environmental program.
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