WORK SMARTER

Have you ever sat back and wondered what the pen on your desk costs?

In the fast moving world of business sometime the small buys take a back seat. When a procurement team or management team talks about “great savings” to the company’s bottom line, it often is related to the squeeze they put on their suppliers for a that big project, large roll out, or big buy. What isn’t taken into consideration is the small stuff, and although the small stuff is just that, ‘small’, any successful person would tell you it adds up.

Let’s take a fortune 500 company for example, employing 127,000 people globally. Let’s say the avg. person in the company has 5 company issued pens on their desk or in their briefcase or forgotten in their pocket and now have migrated to their dresser at home.  Let’s pretend if only for a minute that most people aren’t always loosing pens and only get 5 pens annually.

 The low end pen on average would costs .15 cents, since pens are likely a departmental buy an organization is likely not getting a great deal on their pens but because of the corporation size let’s assume that this company is buying them for .12 cents each.

Here’s the quick math;

127000 employee’s with 5 pens each = $76 200.00 in annual pen expenses.

Albeit that this fortune 500 company is likely a multi-billion dollar organization $76K (on the low end) is a drop in the bucket but what does that represent from an overspend standpoint? What if checks and balances, and transparency were integrated in the procurement process for not just the high dollar items but also the low dollar items?

 Alternatively what if this organization put their (635000) pen requirement out for annual bid, what if the company used their buying power correctly to lower this pen cost to .09 cents each.  What if I told you that by streamlining the procurement process for even the ‘small’ things this particular organization saved $20,000.00 on a .12 cent Item.

I know what you’re thinking, who has time for this?  Fortune 500 procurement officers have much better things to do, and greater things to worry about worry about.  Stationary?  Are we honestly talking about Stationary?

To be honest I tend to agree with you.  However a $20,000.00 savings is a $20,000.00 savings and if you could save your company $20,000.00 on Pens, then how about post-it notes, toilet paper, notebooks, and paperclips? If you are saving your company money on these small buys, how much could you save them on the big ones?

A proficient, streamlined, and transparent procurement process is the key, a tool that helps to connect all aspects of your buying process and include these elements is the ultimate difference between efficient and non-efficient procurement.

Kevin Joss

CEO & Founder of QuoteTool.ca