Situation:  Research center had a large volume of very small dollar and unique purchases, often difficult to find and to very technical and specific standards.  The traditional procurement process required a number of steps mostly built for control purposes on these spends.

Finding:  When the process value stream was analyzed, it was found that there was a high level of work in process, frequent exchanges and call backs to answer questions between suppliers and requisitioners.  The hassle factor was high throughout the process and tremendous human energy was wasted on non-value added work.  Purchases of materials costing less than $50 were costing hundreds of dollars to process, and the dynamics of the research teams’ efforts were being slowed, and purchasing personnel were tied down in information gathering.

Solution:  Project established a procurement card process that allowed R&D associates to make small value purchases in a more efficient manner and with less back office wrangling for information, returns, receipts, and time.  R&D development team dynamics were improved, the procurement organization was freed to work on higher value opportunities, and cost of procurement was significantly reduced.

Result:  The SVI analysis shows that although the actual benefits to R&D cannot be easily measured, the results are positive and support the value creation effort of the enterprise and reduce the cost of procurement from hundreds of dollars per transaction to cents, which makes sense.