The Project – TUC Supporting affiliates with procurement
“TUC affiliates, particularly smaller unions, can struggle with internal improvements to make their unions operate more efficiently and more effectively. If we provide easy shortcuts and work together in areas like procurement, this could be key to the financial health of unions and help them focus better on support to members.
“A new (free) TUC project has been launched with the aim of supporting affiliates to make the most from their procurement by:
- Identifying where better procurement would make a difference to affiliate operations and finances
- Using collective strength to leverage better value from procurement
- Providing expertise and training support.”
TUC – Management Services & Administration
Almost all affiliates have similar requirements for their goods and services – why not use some of that common demand to create better leverage on your price negotiations?
If you review your spend profile you will find there are numerous common areas of goods and services that the majority of affiliates are contracting for – all individually. These usually include things like insurance, IT, utilities, buildings maintenance, print, recruitment, telephony, vehicles, travel booking and so on
What is Collaborative Purchasing?
Collaborative procurement is simply a means to deliver greater benefits through combining some of your purchasing power, and with unions increasingly dealing with rising costs, working in small groups on common requirements can help mitigate this
Not to share single Contracts or have any shared liabilities but solely to be able to use the bigger ‘carrot’ for suppliers to be able to negotiate better rates, better T&Cs, better payment terms and so on, but still have your own individual Contract at the end of the process as you have always done
By working with other unions, as well as driving better pricing, this approach can result in fewer tendering exercises, which leads to lower administrative costs and allows you to spend more time focusing on your specialised services
So, we’re in a collaborative mode and want to lead joined up buying. Our Senior Management Team want cost reductions, everyone wants better Contracts, where do we start?
In reality, when it comes to people tasked with placing orders from different organisations looking to work together, there’s a standard set of questions that get raised;
- “We do it better already.” We’ve been fulfilling our requirements for a long time already and working with another union could lower our standards. There’s always a better practice out there – why not take free advantage of it?
- “We’re already locked into Contracts” – Why invest time in something we don’t need yet? Tenders can be run such that the successful supplier picks up each organisation’s business as & when any existing contracts come to an end. Suppliers know and understand this and bid accordingly. This allows you to take advantage of the cumulative leverage now ready for when current Agreements expire.
- “They have different processes.” Everything they do is complicated and will slow us down. All individual needs & requirements are laid out in the tender documents with all KPIs, and SLAs included in the specifications. No single party’s processes take precedence over another’s, and the collaborative process would be facilitated and run by ProVantage Procurement to the parameters and timescales agreed by the group
- “We don’t want to share Contracts”. There is no ‘sharing’ of Contracts – each affiliate will contract directly with the supplier in the same way as if you had tendered alone but with the advantage of having used the bigger pot of business as leverage
- “We don’t have time for that.” I’m already overworked, why would I take this extra work on? If it’s done properly it will result in less work than you currently need to do. Absolutely no control over processes or decision-making is lost but the legwork involved is done by ProVantage and the results brought back to the participants at agreed gateways for decisions and agreement before the next step
- “They only mind their own interest.” We’re custodians of our union’s best interests, as much as they are so we’d end up having to accept their specifications. Again, because there is no ‘sharing’ of Contracts each affiliate contracting with the supplier will have their own best interests at the heart of their own Agreements in exactly the same way as had they contracted directly themselves
To get past these perceived hurdles there is considerable value in using a third party to facilitate and administer the process. Partly so no one union has to pick up the resources required for this and partly as the third party have no axe to grind in terms of affiliations to any one of the participating bodies – so mitigating any ideas that any outcomes would be more in favour of one union than the others.
ProVantage Procurement have been engaged by the TUC to facilitate and support the specification writing, market sourcing, tendering, shortlisting, negotiating, and contracting with you, ensuring you get the Best Value you need to demonstrate for your money – whilst taking away the drain on resources that fulfilling your requirements demands
What are the key benefits of collaborating?
- Buying Power
Partnering with other unions on goods or services you all need will save you time and money. Not only are you offering a larger pot of business to suppliers, but you represent a larger slice of the market for them, giving you more leverage for negotiation. By collaborating with others, your increasing leverage and achieving benefits from economies of scale that could not be enjoyed alone - Negotiate Better Terms & Conditions It is not just about the unit prices – having greater leverage means you can better negotiate payment terms, delivery charges, upgrades, support, replacements and so on – anything that would normally carry a cost to your union in one form or another
- Savings for the Suppliers
Alongside the benefits for your organisation, there are benefits for the market too. When organisations collaborate, instead of having to tender five times for the same amount of business, suppliers only have to complete one set of documents and go through one single process. Less work involved in winning business means fewer resources are needed – generating savings for them that are passed on to you! - Process Efficiencies
Most organisations recognise that competitive procurement processes are necessary to ensure compliance and achieve Value for Money. So, why not save time and resources by doing these together? As well as avoiding the duplication of separate tenders for the same goods or services, collaborating will help reduce the risk of non-compliance and reduce Risk - Sharing Best Practice
Probably the simplest benefit – by working with your peers we can all utilise their expertise, gain innovative ideas for your own organisations, and build your knowledge and capabilities
Making It Work in Practice with ProVantage Facilitating
If there were three or more unions looking to trial a no-obligation Tender(s) using their combined spending powers, ProVantage Procurement will help manage the process by:
- Agreeing participants
- Carrying out a (free) detailed spend analysis for each to identify common areas of spend and current contractual supply basis
- Agree areas to review & agree timescales/priorities with participants
- Agree on a small set of KPIs – objectives, savings, efficiencies, processes etc
- Determine tender list with the affiliates group, raise & run an agreed tender process, liaise with suppliers, collate all the responses then bring results back to the group for discussion for next steps, if any
- If proceeding to Contract, ProVantage will also help negotiate the cost submissions and all T&Cs to ensure that each individual Agreement is in your favour
If you would be interested in ProVantage Procurement working with you on a free granular spend review with other Affiliates to see where we could suggest areas to reduce your direct and indirect costs, please contact Peter Roberts on 07827 014303 or at peter.roberts@provantageprocurement.co.uk or Tom Brown at the TUC on 020 7467 1311 or at tbrown@tuc.org.uk