Updated Jan 2023
Program Objectives
Best Value
Minimize total cost and risk; Optimize cost with maximum efficiencies, quality and service levels
Save Money
Realize savings from current spending levels while maintaining an acceptable level of quality and service.
Save Time
Have people (staff, management, executive, procurement) focus their time and effort on activities that they have been trained, skilled and/or employed to do
Respect the Environment
Develop supply and service strategies that minimize or improve the YMCAs impact on the environment
Build Strong Relationships
Foster healthy, long-term supplier relationships with the YMCA. Establish a reputation of the YMCA as a good customer/partner.
Grow the Program
Provide opportunities for other Associations to participate and benefit. Develop stronger leverage, credibility and results for the group through increased participation.
Program Vision
We have a vision of the procurement function in the future where information is shared and we learn from each other. We don’t repeat efforts or mistakes. We focus our time on members, staff and donors. We develop healthy, fruitful supply relationships that foster trust, quality and value. We maximize our efforts to extract the best value available and respect our responsibility as stewards of the funds we are given. We tool our staff with information, support, goods and services that allow them to focus on their core duties.
Base Principles
Community
The good of the many outweigh the good of the few. Effort will be focused on initiatives that will address the needs of multiple Associations. The best solutions benefit the most Associations.
Participation and Compliance
We will participate with the group strategies and exceptions will be discussed with the group.
Trust
Do not “Comparison Shop” or search for “better deals”. Efforts directed at finding superior or competitive deals is a drain on our collective resources.
Credibility
Build and maintain program credibility with suppliers. Program strategies and solutions should not be simply new benchmarks for existing suppliers
Fairness
Be fair and transparent with our suppliers and each other.
Proportional Contribution
Investment and input into the program is proportional to the relative size of the participants.
Positive Returns
Associations will begin with - and will continue to realize - positive net savings projections, provided the principles of the program are followed, and every attempt is made to realize available savings.
Inclusiveness
The program will be designed and developed to benefit any YMCA in Canada who chooses to participate; Supply strategies will be designed to offer a solution for every participating Association.
Savings Realization
The program will be designed and operated to capture the savings made available by the efforts of the group.
Values
Commitment
Like any change, there will be points of resistance and difficulty. For this type of program to maintain credibility with suppliers and staff, participants should be prepared to develop solutions to issues rather than abandon them.
Communication
People value information and will typically be engaged if and when they understand rationale and benefits.
Inclusion
YMCA staff need to participate in the development and implementation of solutions, and the interest and expertise exists to support in specific situations. Involvement will often be in the form of “Category Steering Committee” member, or as a point of contact for their location.
Leadership
An Executive Steering Group should remain through implementation, to help set priorities and manage roadblocks. Leadership at each Association will need to be visible in their support.
Potential Sacrifice
As a group initiative, there will be times when some parties benefit more than others. All findings indicate that there is significant benefit available to all participants over time.
Balance of Priorities
There will be occasions when the solution of the group may not meet the need or fit with the situation of a participant. These situations need to be recognized and weighed on their own merits – there must be a balance of group and local objectives for each YMCA.
Category Prioritization Principles
In selecting spend category priorities, we should consider the following rationale:
Leverage existing supply arrangements with favourable terms:
Approach suppliers with whom we already do significant business to request favourable terms as a national account;
Prioritize category sourcing based on:
Program Structure
Canadian Urban Group (CUG) Executive
Operations Committee
Procurement Team
Category Development Teams
Three Areas of Improvement
Challenges to Avoid and Overcome
Compliance and buy-in
The program can quickly lose credibility with suppliers and staff if committed parties do not participate to their capabilities.
Imbalance
With a shared service model, there is the opportunity for a small minority of members to have a disproportionate influence on the activities of the group.
National vs. Local Suppliers or Donors
There will be cases when there is a strong business case to switch from a long-term supplier to a group arrangement. Each situation will need to be reviewed to evaluate the competing objectives.
The “End-Run”
It can be tempting for local staff to leverage the group efforts to improve the terms with a local supplier.
Misconceptions to Address
Everything is ordered centrally
On the contrary, best practice procurement has sourcing and vendor selection occur centrally, but ordering and interacting with suppliers is done at the local level
Volume Buying = Large Inventories
Large volume agreements can be negotiated without taking possession of large quantities of goods all at one time. The ideal supplier arrangement has them storing inventory for us; we order and pay for only what we need.
Only “My Local Guy” services my area
Large and even mid-size companies often have the ability to deliver and service most of the areas of the country. Also, a large-scale program often allows us to move up a level in the supply chain. Perhaps your local supplier remains, but the manufacturer is able to provide better pricing to us via that local distributor. (e.g. Kimberly Clark national discount on paper products via a local supplier network)
We can’t all use / agree on the same supplier
Perhaps not. But a centrally developed category solution does not necessarily mean that only one supplier is used. Contract Cleaning, for example, could employ a number of contract cleaners around the country, but all governed by a coordinated vision, specification guidelines and audit program
Addressing Varied Specifications and Requirements
There are multiple strategies available when needs among participants differ:
Select a common supplier with multiple products:
Develop a Regional Strategy:
Separate the “Needs” from “Wants”:
Mandate Change
In cases of extremely compelling business cases, especially for a non-critical spend area, a change from historical specifications can be “strongly encouraged” by senior management