By Rich Weissman
It was not very long ago that heading up procurement for a not-for-profit organization was a job done by an entry-level buyer, an accounting clerk, or perhaps a volunteer. Yet, in this era of increasing social responsibility, not-for-profit organizations are under intense pressure to maximize fund-raising efforts with documented outcomes and metrics, much like their for-profit brethren. Donors want to make sure that their contributions are being used effectively, efficiently, and with the most return on investment.
For Ian O’Brien, the vice president of strategic sourcing for the Atlanta, Ga.-based American Cancer Society, the challenges of strategic sourcing for an iconic not-for-profit has been rewarding personally and professionally. O’Brien, a veteran of large consulting and banking firms was brought in to the ACS two years ago to address the almost $400 million in indirect spend. “I’ve always had an interest in sourcing as the ‘value lever’ for an organization and there are plenty of opportunities for creating strategies to best manage our spend,” says O’Brien.
O’Brien’s organization oversees a diverse array of commodities for the $1 billion organization, including benefit management, human resources, telecommunications, IT, labor, financial and professional services. Print is also a huge area as the ACS needs to develop a large amount of promotional materials for development, advocacy, and community service demands. O’Brien says that while there is no clinical spend per se, there are some sourcing activities around long-term cancer-related clinical studies.
“When I came to the ACS we were a federated environment with all of the associated inefficiencies," says O’Brien. “We have moved over to a center-led process where we can look at national contracts, develop some data models, leverage spend, and better organize sourcing across the organization.” O’Brien’s staff includes sourcing, analytics, inventory management, and supply management professionals.
O’Brien’s approach is to have a nationwide approach to sourcing. “There are 12 divisions across the country and each has a procurement lead who indirectly reports into me and we’ve had some good success,” he says. “It can be challenging for a new person to come in and significantly change an existing process but everyone seems to understand our challenges and they’ve treated me well. It is all about balancing the needs of the divisions while focusing on the supply chain efficiencies we are trying to implement.”
When addressing sourcing decisions, O’Brien like to utilize what he calls the “Sourcing Wheel of Life” that include areas such as total cost of ownership, quality, risk, and efficiency. “We are really focused on process improvement and certified or actual savings, not just contracted savings,” says O’Brien when asked about how he measures success. “We manage our money very carefully and spend it wisely.”
O’Brien is excited to work for a successful mission driven organization “Our employees and volunteers really support the ACS mission and that drives us to work even harder with suppliers to create value,” he says. “Most of our suppliers bend over backwards to support us and offer some special deals.” Yet some have had integrity issues. “Sadly, we’ve found some suppliers have taken advantage of us over the years, thinking of the American Cancer Society as an easy target,” says O’Brien. “We are weeding them out.”
Endicott College Assistant Professor Rich Weissman teaches management courses for the School of Business and the Van Loan Graduate School. He is also the director of corporate education, which includes the Center for Leadership, Endicott’s management development institute. He is vice chair of the planning committee and also serves on the technology committee and the Institution Review Board. A practitioner turned educator, Weissman has more than 25 years of experience in all facets of procurement and supply chain management. He has held positions with large business units of Fortune 500 companies, medium-sized contract manufacturing companies, small venture-backed Internet startup firms, and third-party procurement, consulting and strategic sourcing firms.
Rich holds an M.S. in Management from Lesley University and a B.A. in Economics from Rutgers University. He is past president of the Purchasing Management Association of Boston and a recipient of the Harry J. Graham Memorial Award, the highest honor bestowed by the association.
The cost and revenue synergies from any M&A activities are always derived from multiple pockets. Companies do plan meticulously to achieve the savings from all departments such as operations, procurement, sales and marketing, general and administrati… Read More
George E. Krauter
In my first installment in this series, I pointed out how those within organizations opposed to outsourcing of the MRO function erect obstacles to success. Read More
Procurement has made strides in moving from a back office spend center to becoming a strategic business partner by driving process improvements, cost savings, and enhanced customer and supplier relationships. Read More
Staples Advantage is the one supplier that offers all the business solutions you need, all with the expertise of a specialty vendor. Read More
It started in 1972 with an idea, a new concept in distribution. Today, Digi-Key Corporation is one of the fastest-growing electronic component distributors in the World. The stimulus for this growth is Digi-Key's customer-centered business philosophy… Read More
Procurement and supply management leaders have a seat at the table, and management’s expectations are high. But what do CEOs really want, and is purchasing delivering on these expectations? This webcast looks at how procurement and supply management … Read More
At world-class companies, purchasing’s influence touches just about every area of spending. But, how exactly do procurement teams get to the point where other departments approach them for help with sourcing such indirect categories as human resource… Read More