Scientific Supply Purchases Strategic Sourcing Initiative Huron Consulting Services was engaged to evaluate cost savings opportunities with our major scientific supply distributors (Fisher Scientific and VWR). Initiative activities included: Gathering and analyzing spend data Estimating savings opportunities Developing and presenting the business case

Initiative Objectives Analyze and understand our scientific supply spend. Review our contract terms and conditions, including pricing, relative to benchmark institutions. Develop a strategic methodology for contracting with our major scientific supply distributors. Implement the strategy to reduce product pricing without sacrificing quality or limiting choice.

Recommendations Combine spend of like items to a Preferred Scientific Supply Distributor. Establish a “hot list” of high volume items and negotiate improved pricing. Negotiate better discounts for general product category items. Move the Preferred Distributor to SAP’s SRM system. Also, move the other supplier to SRM but with limited catalog product offerings. Communicate advantages of individual quote/sourcing for high dollar equipment and products.

Estimated Savings- Supply Distributors ($’s in 000s) Annual Spend % Savings Opportunity $ Savings Opportunity Pricing Improvements (“hot list” items, general category discounts) $9,4907% - 11%$700 - $1,040 Financial Incentives (rebates, prompt payment discounts) 5% - 10%$485 - $920 Total First Year Savings12% - 21% $1,185 – $1,960