Cost-per-copy office machine contract initiative in Ohio wins Cronin Bronze Award
The winner of the 2010 George Cronin Bronze Award for Procurement Excellence is a young procurement manager who developed an initiative that saved Ohio more than $182,000 in the first year of a pilot project to replace 438 existing office machines (fax machines, copiers and printers) with 289 multifunction machines capable of processing the same annual volume. The National Association of State Procurement Officials (NASPO) presented the award to Thomas Linley, procurement manager, Ohio Office of Procurement Services, on August 24 during NASPO’s 2010 annual conference in Washington, D.C.
Thomas Linley joined the Ohio state purchasing office from private industry in 2009. He began his career in 2003 in NCR’s procurement office as a strategic sourcing analyst. Soon after beginning his employment with the Ohio Office of Procurement Services, Linley assumed responsibility for the state’s cost-per-copy office copier contract.
To better understand the per-copy contract, Linley visited his clients and discovered that many had numerous machines sitting in the office suite: a fax, a copier, a printer. In some cases, the equipment was located near similar equipment in other offices. The variety of machines posed a user training challenge, and a few clients expressed frustration about having to have multiple maintenance contracts. “The agency is the customer; we are the consultants,” said Linley. “The customers really helped identify the opportunity for improvement.”
Linley went to the clients’ offices and witnessed first-hand the way machines were used, analyzed the effect on client agencies and saw an opportunity for improvement.
He reaffirmed what he learned with market research conducted in his office. Vendors promoted multifunction machine consolidation, but their plans were expensive, and Linley had no budget. He used market research to look at “best-in-class” practices while utilizing the expertise of vendors.
Linley next discussed the opportunity with management in the Office of Procurement Services and the Chief Procurement Officer. They decided to test consolidation of office machines in their own department and one political subdivision. Linley managed the project and supplemented the office’s resources with interns. The accompanying table summarizes Linley’s assessment presentation identifying the expected annual cost savings in lease, maintenance and operating costs for a single agency.
“The involvement of my management in helping define and promote the consolidation goals was critical,” said Linley. “It couldn’t have been done without them.” The project now has been embraced by almost all agencies. Future consolidation will save an estimated $5.3 million annually statewide.
Email Thomas Linley at Tommy.Linley@das.state.oh.us.
|Summary Of Cost Savings|
|CURRENT ENVIRONMENT||PROPOSED ENVIRONMENT|
|49 total devices – 1,907,990 annual copies||12 total devices – 1,907,990 annual copies|
|– 16 copiers
– 11 fax machines
– 16 networked printers (4 color)
– 6 desktop printers (0 color)
|– 2 network printers (1 color)
– 10 CPC machines (1 color)
|Current Cost-Per-Copy = 0.054020 (includes Equipment, Maintenance, Supplies)||Proposed CPC = 0.017581 (includes Equipment, Maintenance, and Supplies)|
|Current Monthly Cost=$8,589.06||Proposed Monthly Cost=$2,856.10|
|Current Annual Cost=$103,068.68||Proposed Annual Cost=$36,885.96|
|Annual Savings=$66,182.72 or 64 percent|
About the author
Jack T. Pitzer, Ph.D., CPPO, is a NASPO past president, a life member of both NASPO and NIGP, and an adjunct professor at Florida Atlantic University. Richard Pennington, J.D., CPPO, is a life member of NASPO and an NIGP student instructor. Both authors have participated in the evaluation of projects for the Cronin Awards.