When their regular c-store distributor went belly-up late last year, Miami University (Ohio) and Ohio University found a way not only to replace the service but to improve it by pooling the contract and sharing the savings generated by the increased volume. The two schools, joined by the University of Akron, broadcast a collective RFP that was won by grocery distributor H.T. Hackney Co. of Knoxville, TN.
The three participants purchases the same products, giving them volume leverage, and they also work with Hackney to maximize rebates for suppliers. The contract began on July 1st and has been a success so far, says Rich Neumann, director of residential dining at Ohio U.
“Our fill rates are up and our costs are down,” he says. “We anticipate a 4.5% annual savings and a total savings of $267,000 over the three-year life of the contract.” Neumann says he is looking at a similar arrangement for the dining end of the operation as well.
Melanie Glassmire, procurement & supply manager at Ohio U., says the arrangement was a product both of circumstance and a willingness to look outside the box.
“We and Miami had been using the same provisioner for supplying our stores, and when they went out of business we were both looking for a solution. So we asked ourselves, ‘What if we did this together?' We had been working with the procurement services of the Inter-University Council of Ohio [a voluntary association of the state's public universities] so we put a message out to the other members to see if anyone else wanted to join us. Well, most of the other schools had contracts they couldn't break, except for Akron. So it ended up as the three of us.”