Xerox Canada gets strategic in managing its services buy
Regional needs are integral to global activities, procurement says.
By Susan Avery -- Purchasing, 1/15/2009 2:00:00 AM
An ex-pat is helping to bring a strategic focus to indirect services buying at Xerox Canada.
Purchasing professionals working for center-led sourcing operations based in the U.S. need to remember unique requirements of facilities located in other parts of the world when putting together regional or global agreements with suppliers, says Caren Weiner, Canadian purchasing manager at Xerox.
It is a lesson she learned when she took on a new assignment at Xerox Canada in Toronto, Ontario, three years ago.
"Thinking on a truly global scale and taking into account not only pricing, but also cultural differences and business requirements is important," she says. "Purchasing needs to consider all these elements to be successful at deploying sourcing strategy in different regions around the world."
In the role, Weiner was tasked with leveraging Xerox Canada's $150 million annual buy with its parent company's global purchasing tab of $6.7 billion. (About $2.25 billion of this is spent in the U.S.) Xerox Corp.'s global purchasing operation headed by Ken Syme, vice president of global purchasing, is located in Rochester, N.Y., more than three hours from Toronto by car. Purchasing professionals there manage mostly spending on indirect goods and services; the company calls the group corporate procurement services. Buyers responsible for the direct spend are based at facilities located throughout Asia.
Today, the global purchasing operation in Toronto, which consists of four individuals including Weiner, has a decidedly more strategic focus and is sourcing some goods and services through North American agreements Xerox has negotiated with suppliers, including fleet management services and contract labor. Xerox Canada's indirect buy also consists of logistics/transportation, travel, sales and marketing and facilities services.
What's more, global purchasing now is working closely with Xerox Global Services, the company's business that provides customers with outsourced document production and mail and distribution services, among others. As part of its offering, Xerox Global Services also provides customers opportunity to buy some indirect goods and services through global purchasing, in essence allowing them to leverage the company's buying power. In fact, Weiner goes on sales calls with the team. "I can relate to the facilities manager and the office manager and how we may be able to assist them," she says.
Key to global purchasing's success is support early on from the CFO. "Access to senior management is one of the benefits of working for a smaller operation," says Weiner, who met with the president of Xerox Canada her first week on the job in Toronto.
How they buy
"My job is to be the liaison between Toronto and Rochester," says Weiner, who has been with Xerox for 22 years, beginning her career with the company in the purchasing operation at Tektronix in Beaverton, Ore., which Xerox acquired in 1999. As such, she works to communicate requirements of the company's facilities in Canada to her colleagues in Rochester.
"Requirements are different in Canada and they shouldn't be treated the same," she says. "I make sure that when Rochester does a request for proposal that they include our requirements and take into account things that are different here." For instance, there is more concern for privacy and personal information in Canada, and drug-testing and background screening is done only as an exception. So, the buyers need to remember to remove all references to these activities from contracts for the country. Also: The company must provide French language support to employees working in Canada.
As purchasing professionals with responsibility for indirect services spending well know, a big part of their jobs is selling the function's value internally and Weiner finds this to be true at Xerox Canada. "Our efforts at sourcing are starting to pay off in that our value chain partners within the company are contacting us earlier in the process," she says. "We are getting involved at a point now when we can actually make a difference to the bottom line with some of the deals we are putting together."
The fleet buy is one example. Xerox Canada had vans in its fleet that employees use to haul the equipment the company sells and services. Management wanted to reduce not only the cost to operate the vehicles, but also greenhouse gas emissions. Using a Lean Six Sigma approach, global purchasing conducted research to determine the amount of trunk space a technician needs in a vehicle to haul equipment and whether there was a way to pare it down. Working closely with the company's supplier of fleet management services, the two came up with some alternative business models.
"We involved the drivers in the process for selecting the vehicles so they would be comfortable with the choice and making the move from a van to a car," Weiner says. "We came up with some alternatives with lower operating costs, and put hybrids such as the Toyota Camry on the road. The vehicles are really well received and help protect us from fuel prices, which are significantly higher here than in the U.S."
Global purchasing also works closely with internal customers on such buys as contract labor, an area where Weiner says purchasing needs to be particularly hands on. One challenge is Canada's low unemployment rate; there's a cost/quality balance that the company has to take into account when hiring workers. Since much of the labor it contracts fills positions that are customer-facing, it must be creative at attracting and retaining skilled technical workers.
Xerox Canada purchases contract labor through a regional agreement negotiated by purchasing services in Rochester. The supplier manages relationships with employment agencies, has an onsite presence in Toronto and staffs two other Canadian call centers. It provides Xerox with an online tool that manages the acquisition process. Reverse auctions determine rates paid to workers based on job description and geography.
Weiner says while that Xerox Canada tries to leverage as much as it can the company's spending in the U.S. and, where it makes sense, Europe, which buys about $1.15 billion annually in goods and services, in some cases, it makes sense to stay local. "So we use the same strategy but source through a supplier in Canada." One example is some technology purchases where licenses and warranties are voided if the items are brought across the border.
Now Playing: 
