Results of a benchmarking effort are spurring Bayer Corp., a major chemicals and healthcare company based in Pittsburgh, to expand its purchasing card program.

Robert A. Rudzki, chief procurement officer NAFTA region, is responsible for reinvigorating the company's purchasing card program. He appointed a cross-functional team, led by purchasing and accounting, and spearheaded by Gloria Tavoletti, corporate administrator of purchasing card/T&E card programs, to benchmark companies of similar size with similar programs. The team also met with Bayer's card provider, MasterCard, to learn more about card programs at other companies. (Note: Tavoletti has since assumed a new position within the company's IT procurement operation. Stacey Vigliotti replaces her as administrator of the purchasing card/T&E program.)

Bayer first implemented its purchasing card program in May 1995, but card use was not mandated. "We met with cost center managers at each location and presented them with overviews of the program," Tavoletti recalls. "Then, it was up to them to determine whether it was something they wanted to do."

At the time, cardholders were purchasing such MRO items as office supplies, lab supplies, health and safety products (safety shoes), and uniforms. "Good candidates for the card program were typically things that could be purchased for less than $1,000 and for which we were still creating purchasing requisitions and POs," says Tavoletti.

At the present time, Tavoletti estimates that some 3,600 purchasing cards are in use at Bayer's U.S. sites. Now, "It's time to take it to the next level," she says.

Expanding the program includes rolling it out to Bayer's NAFTA locations in Canada and Mexico. It also means targeting new spend categories including: temporary help, overnight shipments, meetings/event planning, uniforms, leasing, personal computers and reprographics. "We identified these opportunities because there's still a great deal of manual intervention to get these things paid for," says Tavoletti. "They still generate POs or are items for which accounting still issues checks."

Strategic sourcing, naturally, is behind the effort. So too are the company's managers who provide assistance with communicating the program throughout the company. Tavoletti says Bayer's objective for expanding its card program is to improve both purchasing and accounting processes. "We think our biggest savings will come from eliminating many nonvalue-added tasks associated with purchasing low-dollar items."

Bayer has criteria specific to its card program. For instance, goods and services purchased with the card need to be tied to cost centers. For most p-card items, Bayer has national agreements with suppliers that are single sources. "But, in the case of, say, overnight shipments, there may be some overlap between one or two suppliers," says Tavoletti. In other cases, supplier agreements are for single Bayer sites.

Cardholders can currently purchase goods and services from nearly 9,000 suppliers, a number that the p-card the team wants to reduce. "Many of these are for items that cardholders use once at one location from one supplier. Consolidating these buys will help us leverage our spending," Tavoletti says. "We are working with our card provider to identify consolidation opportunities across the company."

The team is increasing communication of its plans to program administrators, buyers, and accounting managers at each of Bayer's sites across the U.S. "We're trying to create peak awareness so they can filter the information through the sites and look for new p-card opportunities," says Tavoletti. "One role of the program administrator is to help identify opportunities and work with site administrators."

Use of the p-card program is not mandated as of yet, but Tavoletti says it may be for certain items. "We picked the Pittsburgh location as the site from which we are going to see how each of these things work," says Tavoletti. "Once we determine which areas are most effective, we may begin mandating portions of the program." And there are some goods and services that can be purchased by Bayer employees only with procurement cards. In Pittsburgh, for example, employees can purchase uniforms and shoes with purchasing cards only. "We worked with the supplier so they won't accept any other means of payment," says Tavoletti.

At this point, Bayer is not using its cards to pay for goods and services that employees may purchase via the Internet, although Tavoletti says this an initiative the team is considering for the future.

Reactions from cardholders about the company's plan for expanding its purchasing card program are favorable, says Tavoletti. "I believe the time is right. People now are embracing opportunities for both process and financial improvements, as opposed to avoiding change. In order for us to remain a competitive business, we need to stay on top of all available opportunities, and this is certainly one that can help us."

Suppliers, for their part, receive payment in a day or two as opposed to 30 days or more. "We want our suppliers to embrace the program as much as we have," Tavoletti says. "That's why the team spent time over the past several months working with suppliers."