1. Buyer Behaviour - VIU Purchasing at VIU Purchasing at VIU Constraints Constraints Opportunities Opportunities Value Value Relationships Relationships

2. Pareto’s Principle “80 – 20” rule “80 – 20” rule Can focus on key items Can focus on key items Spend less time on non-critical items Spend less time on non-critical items

3. How Does the Purchasing Process Work at VIU? Departments determine need for goods/services Departments determine need for goods/services Contact Purchasing Dept. to discuss Contact Purchasing Dept. to discuss  Low-dollar value, non-contract item – proceed as desired  May need to involve Facilities Services, Health and Safety, IT, etc.  May need to request formal bids, or may simply require 3 quotes Departments create requisition and obtain approval Departments create requisition and obtain approval Approved requisition comes to Purchasing Approved requisition comes to Purchasing Purchasing issues Purchase Order Purchasing issues Purchase Order

4. Dept determines need Contacts Purchasing Purchasing determines whether other depts. need to be involved, rigor in process required Involvement of other depts required? Yes Determine if policies are violated, H&S concerns? End user creates requisition Req approved by appropriate person Purchasing issues Purchase Order Appropriate authority verifies No

5. What Constraints do we Face? Time Time  Budgets are released at the start of the fiscal year, but often, spending occurs at the start or end Budgets Budgets  The budgets may be small in certain areas, so no matter how good a product looks, it may not be possible Existing Contracts Existing Contracts  We may have contracts in place that prohibit purchasing certain products from alternate sources

6. More Constraints Legislation and Trade Agreements Legislation and Trade Agreements  Agreement on Internal Trade (AIT)  Trade, Investment, and Labour Mobility Agreement (TILMA)  Carbon Neutral requirement from government  Auditing functions (CAMF) (Note that there are other trade agreements that affect other public sector bodies, but do not affect universities)

7. What Opportunities are there for Sales Reps? Low-dollar value products Low-dollar value products  Departments can “make their own deals” on low dollar value purchases, provided institutional policies or contracts are not in place One-time vs. repeat purchases One-time vs. repeat purchases P-Cards P-Cards  Individuals are able to use a VIU purchasing card (Visa) for predetermined dollar amounts

8. How Can You Create Opportunities? As a Marketer or Sales Rep:  Do your homework  Check websites, know who to contact (eg. Should you go to Purchasing Dept, or direct to end users?)  Determine if catalogues are beneficial (eg. Is there a “green” way to distribute material?)  Appropriate follow-up  Book appointments  Some sales reps will drop in at inconvenient times – this doesn’t help get them on the vendor list  Some sales reps will drop in at inconvenient times – this doesn’t help get them on the vendor list  Be ethical  Many companies, particularly public bodies, do not accept invitations for lunch, golf, etc  Don’t ask for competitor pricing!

9. Creating Opportunities Cont’d Get on vendor lists Get on vendor lists  This is beneficial for routine purchases  Can be notified directly of large bid opportunities  If we don’t know about you, we can’t buy from you Register to receive bid opportunities Register to receive bid opportunities  Websites such as BC Bid will send you opportunities directly  Company websites may post some smaller opportunities  If you don’t register, visit the websites regularly

10. What Is Viewed as Value? Value is what the University is willing to pay for (service, delivery, etc) Value is what the University is willing to pay for (service, delivery, etc) Waste is anything that does not add value Waste is anything that does not add value  Also have “necessary” – does not add value, but must be present (such as set-up or development)  “Overquality” is not necessary

11. Offer Purchase Discounts Come in a variety of forms Come in a variety of forms  Quantity Discounts (EOQ)  Early payment discounts (eg. 2/10 net 30)  Advance payment, cash discounts Are discounts worth it? Are discounts worth it?  May be cheaper to buy large quantities, but may cost more in the long run (carrying cost)

12. Expect Fair Treatment Code of ethics Code of ethics Transparent process Transparent process Encourage bidders Encourage bidders Keep your company off the front page of the paper! (eg. Gomery Commission) Keep your company off the front page of the paper! (eg. Gomery Commission)

13. Public vs. Private Public Public  Spending taxpayers’ money  Subject to scrutiny (FOI)  Must be available to everyone (AIT) Private Private  Opportunity to earn bonuses  Not subject to AIT (can exclude certain bidders)  Must still comply with contract law

14. Relationships Suppliers Suppliers  Mutually beneficial (they need to make $ to stay in business)  Treat suppliers well, they treat you well Other departments Other departments  Accounts Payable (ensure suppliers get paid), Production, Shipping, etc. Customers Customers  Must consider the end-user (whether in- house or external)

15. Questions?

16. Thank You! Chris Munro, C.P.P. Purchasing Manager, Vancouver Island University Chris.Munro@VIU.ca 250-740-6230 Chris.Munro@VIU.ca 250-740-6230 Chris.Munro@VIU.ca http://www.viu.ca/purchasing/ http://www.viu.ca/purchasing/ http://www.viu.ca/purchasing/