Illinois airport consolidates purchasing operations
Chip Geiger had 42 years of experience in supply chain management in a variety of industries when he stepped into his current job as procurement and compliance manager at the Greater Rockford (Ill.) Airport Authority. Geiger holds the following certifications: Certified Purchasing Manager (C.P.M.), Certified in Production and Inventory Management (CPIM) and Certified in Integrated Resource Management (CIRM).
That extensive work background has helped Geiger deliver cost savings and efficiencies in his current post. He has deployed procedures and metrics at the airport that he learned in his years in the healthcare field. When he assumed his role at the airport earlier this year, Geiger consolidated purchasing operations at one desk.
Geiger says the now-centralized procurement function has helped streamline operations. “The efficiencies come in both internally and externally, by having one point of contact to direct purchasing inquiries to. I can deflect the number of cold calls our operations and maintenance personnel receive, and forward on leads for them to review at their desks at their time frames.”
He says agency spending is closely scrutinized. “Cost savings will come from what I am able to negotiate from previously budgeted amounts. Cost avoidances will also be tracked, as those are real savings that while they do not have a savings effect on our budget, they are saving us from negative variances on current budget projections.” Geiger believes that the procurement function is crucial in minimizing costs. “Purchasing departments exist to deliver cost savings that other operational departments do not have the time to explore.”
Adding value to the procurement operation is Geiger’s goal. “As I get more involved in the business, we are discovering more value I can bring to the organization, so our department’s workload increases. But that is a good problem to have. If we as a group would not be producing positive results, the need for supply chain professionals would not be as great as it is now.” Geiger says there is no doubt that procurement departments are facing more work in 2020. He adds: “But I consider that to be a testament to the output we are producing each day.”
As procurement teams’ workloads grow, they can increase their reliance on a couple of tools, Geiger tells Co-op Solutions. “Cooperative purchasing agreements can certainly save time by defining established suppliers at pre-negotiated pricing. But those prices should be verified; sometimes suppliers can offer deeper discounts if asked. Give the suppliers a chance to say yes.”
Another time-saving tool for procurement teams is an enterprise resource planning (ERP) package, Geiger says. ERP software can hold entire company databases, and other software packages can automate vendor registration, contract terms and conditions, bid packages and analysis of bids. “Any time you can put data into one database and have that translate to other documents that require consistent terms, those packages can provide more efficient use of our time,” Geiger explains.
Quality procurement professionals are very valuable these days, Geiger says. “If you are looking for experienced professionals to join your staff, they are out there, but will require a solid culture and chances to grow when moving from one organization to another.” He explains: “You can’t get them on the cheap anymore, but a good procurement person will recoup your investment in them.”
He advises procurement directors to recruit within the agency. “Interns or entry-level staffers are good if you have an environment that can teach them your business, and be patient with the results. If you choose the right person with the right motivation, they will end up performing as you have trained them.” Geiger cautions: “But you will need to constantly educate and challenge them, or they will start looking elsewhere.”
Effective procurement departments get rewarded, Geiger says. “If a department can prove they are producing positive results, and funding their own staff with their cost savings and avoidances, the case can be made to retain or increase the budget.” Geiger adds that it’s important that the procurement team publicize its successes to the wider organization.
Michael Keating is senior editor for American City & County and the GPN web site. Contact: firstname.lastname@example.org