Partner up

A strong relationship with IT builds cohesion

Karen Prema -- Purchasing, 11/17/2005

It takes time to plan a strategy to buy multifunction products (MFPs) for 40,000 employees at more than 50 locations across the U.S with a range of copying needs. But, Todd Martz, senior director for sourcing and infrastructure within supply management for Fireman's Fund Insurance in Novato, Calif. makes the buy happen successfully by partnering with IT and getting help from the company's business units.

Martz says the supply management organization, which consists of 34 employees, helps IT with a site survey of each location. "We want to get a landscape of our inventory" including how many office devices the company owns, where they are located, and whether there are desktop or network devices at each location.

A formal survey takes a snapshot of the usage and needs of each business department within Fireman's Fund. The survey calculates usage, which is the amount of pages printed per month. Jointly, IT and supply management asks each business line to report what it wants and needs, including color devices. "It's a balance of their requirements with what we find from the empirical data from the survey that we've done," says Martz.

"The real value from this [the survey] is laying out the strategy and trying to eliminate a lot of the excess printer needs," says Martz. Based on the requirements, the team sets standards/guidelines. For instance, one monochrome device per 50 users, and one color device per 100 users is one specific guideline purchasing and IT agree on.

"The value doesn't come from negotiating a better contract with suppliers, but pulling machines out and reducing demand," says Martz. It is also important to evaluate strategic placement of MFPs, which combine functionalities like faxing, copying and other features.

Purchasing negotiates a contract with one supplier, and buys equipment for each location based on its current inventory and business requirements.

All business units have different machines, but one thing Martz likes to keep in common is the supplier. "It's important to consolidate around one particular brand. That way, you don't get as many issues around maintenance," says Martz. "We specify a supplier based on our relationship, the model number, and install it for the business unit. We don't let the businesses shop the supplier catalog and pick what they want." A consolidated supplier base also means that supply management has fewer contracts to manage, which can dramatically reduce overall costs with the organization.