The Oakland School District
THE OAKLAND SCHOOL DISTRICT
BUSINESS PURCHASING 104-170
MARCH 6, 2012
OVERVIEW In reviewing an analysis of his school district’s paper buying habits, supply manager Gene Smith uncovered some interesting statistics regarding the Oakland School District’s supply ordering habits. Through the growth of the school district, purchase orders for supplies had risen to astronomical levels. Over the course of the previous year, purchase orders (including original orders and change orders) had grown to an astounding 36,842, or nearly 3,100 orders per month. These orders came from one or more of approximately 1,300 suppliers. Even more astonishing was the low average value of each of these orders. 35 percent of the orders placed were valued between $30 and $100 and 23 percent of the orders were below the $30 mark. Over half of all of the orders placed were for less than $100. This business practice is cost-effective for no company involve; neither the Oakland School District nor any of their suppliers are making good use of their time and resources by continuing to fill these small orders.
PROBLEM / OPPORTUNITY The order fulfillment process is convoluted and requires streamlining to create a process that is economically sound for both the Oakland School District and its suppliers.
POSSIBLE SOLUTIONS The first recommendation being made is to streamline the purchase order process to reduce the number of small orders and the number of suppliers to create a more cohesive ordering process throughout the district. To begin this process, it is recommended that a cross-functional team of representative users from each point of the process (including but not limited to engineers, buyers, clerks, accounting clerks, controllers, the district treasurer, director of operations, and the district superintendant) meet for a one day meeting to map out the process used for each type of order. As with all attempts at procedural change, especially across multiple
BUSINESS PURCHASING 104-170
MARCH 6, 2012
OVERVIEW In reviewing an analysis of his school district’s paper buying habits, supply manager Gene Smith uncovered some interesting statistics regarding the Oakland School District’s supply ordering habits. Through the growth of the school district, purchase orders for supplies had risen to astronomical levels. Over the course of the previous year, purchase orders (including original orders and change orders) had grown to an astounding 36,842, or nearly 3,100 orders per month. These orders came from one or more of approximately 1,300 suppliers. Even more astonishing was the low average value of each of these orders. 35 percent of the orders placed were valued between $30 and $100 and 23 percent of the orders were below the $30 mark. Over half of all of the orders placed were for less than $100. This business practice is cost-effective for no company involve; neither the Oakland School District nor any of their suppliers are making good use of their time and resources by continuing to fill these small orders.
PROBLEM / OPPORTUNITY The order fulfillment process is convoluted and requires streamlining to create a process that is economically sound for both the Oakland School District and its suppliers.
POSSIBLE SOLUTIONS The first recommendation being made is to streamline the purchase order process to reduce the number of small orders and the number of suppliers to create a more cohesive ordering process throughout the district. To begin this process, it is recommended that a cross-functional team of representative users from each point of the process (including but not limited to engineers, buyers, clerks, accounting clerks, controllers, the district treasurer, director of operations, and the district superintendant) meet for a one day meeting to map out the process used for each type of order. As with all attempts at procedural change, especially across multiple
Bibliography: * Supply Management 8th Edition by Burt, Petcavage, and Pinkerton * The Oakland School District case study