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| How Good Is Your Correctional Facility at Predicting Purchasing Needs? |
| By Leah Runge |
| Published: 07/15/2013 |
As with all economic downturns, some good has come of the recession that began in 2008. For instance, many businesses and other organizations have found they can operate well with fewer workers by streamlining operations, improving worker productivity, and eliminating redundancies.
They are also finding that by keeping better tabs on supply purchases for their facilities, they can control costs more effectively as well. In fact, it is common for large facilities—especially those that are part of a system such as a school system or correctional system—to not accurately or fully know what products they have in stock, in which facilities, and what quantities. This was brought to life in a presentation by David Frank, President of the American Institute for Cleaning Sciences (AICS), at a major professional cleaning tradeshow last year. As Frank worked with a large Colorado school system to determine its cleaning needs, the school district realized they did not always know what and how many products they stored and where they were being used. Further, some individual schools were ordering their own cleaning supplies even when the district may already have had them in stock…resulting in added costs for the entire district. In such cases, what is clearly needed is some type of analytical tool or supply chain management system that can help large facilities, especially those with several locations, keep better track of their purchasing. And schools and correctional facilities are not the only organizations interested in such a tool or management system. Private organizations could benefit as well. Bloomberg BusinessWeek Research Services recently conducted and reported on a survey in which researchers contacted more than 300 directors and managers in major companies around the world involved in purchasing for their organizations.* Through their responses it was clear that the need for information gathering systems and analytical tools—defined as advanced software programs or Web-based technologies—is expected to jump considerably by 2014. According to the study, the key reasons for wanting these information gathering systems are to be able to spend more wisely, reduce costs, improve product availability, enhance transparency and accountability, and make more prudent purchasing decisions. More Accurate Forecasting The desire to improve supply forecasting was at the top of the list of reasons for wanting these tools, according to the Bloomberg study. The executives contacted said they believe that being able to forecast their needs will help them to not only streamline ordering but control costs significantly as well. As an example, the study quoted Jim Keppler, a purchasing executive for Whirlpool. Keppler said his company was able to shift 4 percent of its fixed supply chain costs—costs that stay the same no matter how well or how poorly the business is doing—over to variable costs, which can fluctuate based on sales, for instance. Keppler indicated that over time this helped his team improve forecasting so that they made purchases only when and where needed. As an added and even unexpected benefit, it helped his organization reduce storage needs. “We have been able to consolidate warehouses and reduce total warehouse space, which in turn helped lower operating costs.” Accessing the Tools With the potential benefits clear and the need for these analytical tools growing, correctional facility managers will likely want to know how they can find these systems. Several software programs from a variety of manufacturers are now available that can help managers improve their supply purchasing. However, some due diligence is necessary. Some systems are easier to learn than others, and some companies are more willing to spend time helping their customers learn the programs. Another option is working with distributors who already have access to these systems. For instance, some janitorial distributors affiliated with a major supply chain optimization organization are now using one of the Web-based technologies mentioned earlier. This system helps their clients analyze their current purchases or suggest more cost-effective options—or in some cases more environmentally preferable options—so that they can make fact-based purchasing decisions. Working with a distributor who is familiar with these tools also means there is no learning necessary. While the recession may not have hit correctional facilities as severely as it did private businesses, their operating budgets in the past few years have come under far greater scrutiny. Most budgets have been reduced—in some cases quite significantly. Because of this, the time may have come for these analytical tools and Web-based technologies, not only in major businesses around the globe but in correctional properties as well. Corrections.com, author, Leah Runge, is Marketing Manager for AFFLINK’s eLev8® system. AFFLINK is a leading sales and marketing organization for the facility management, cleaning, healthcare, education, industrial, packaging and related industries. Runge can be contacted via her company’s Web site. *The study was conducted in 2012 and released in January 2013 |
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