This client retained TBI to assist them in their first efforts in strategic sourcing, seeking to leverage the size of the organization and overall spend to achieve cost savings in their purchasing of non-core services. TBI is engaged in guiding the entire outsourcing life cycle, assisting in its management, and transferring knowledge to the company’s indirect purchasing personnel.
In the North American Print, Copy and Binding Service Outsourcing project, TBI began by guiding corporate personnel in establishing an outsourcing evaluation team who could provide information and insight into company service requirements, current work volume and cost across 38 locations, including two subsidiaries operating in an almost fully decentralized structure.
Base Case, SOW and SLA Development
Establishing the total spend on in-scope services required accumulation of budget data, consideration of impending expenses if the services were retained internally, review of purchasing records through multiple accounts payable system records, and manual review of company purchase card records to identify payments to printers, binders and copy centers.
TBI also worked with corporate personnel to identify various work categories (e.g., printed product manuals, business stationery, brochures, color and black and white copy work, etc.) and the specifications and service level requirements (e.g., speed and quality standards) for work in these categories in order to accumulate estimates of work volume in a manner that could be included in a vendor request for proposal. Simultaneously, to speed the process, TBI began the process of qualifying vendors for participation in a formal procurement action. The client needed to accomplish this outsourcing action in two months, to avoid investment in new equipment and labor relations complications.
Vendor Qualification Process
The client provided TBI with the names of current vendors who were their largest providers of in-scope services, among the many whom occasionally or regularly did print, copy and/or binding work for them. TBI also conducted research to identify additional vendors who might have the capability to provide managed services. A structured telephone interview requesting vendor information was the first step used in this process. The capability to provide managed print, copy and binding services on a large scale, across a wide geographic territory is a relatively new industry development.
Further, the company needed to include vendors who were certified Minority Business Enterprises, and vendors with whom there were satisfactory current contractual relationships for providing specialized services. This required consideration of outsourcing solutions where one Prime Vendor would be selected, and required to subcontract services to other vendors and to coordinate with others in order to provide consolidated management information.
Thus, this research involved a relatively complicated discovery process, including following leads provided by potential vendors as to their competitors. The structured telephone interview RFI process provided the quickest path to identifying potentially qualified vendors. Through this process, twelve vendors were eventually selected and asked to develop and formally present proposals and price quotes for all or part of the in-scope services.
With TBI’s assistance, the client was able to achieve its objective of strategic outsourcing of target services throughout North America and gaining more control over total spending in this area, while at the same time reducing cost. Through a process recommended by TBI, the company addressed the priority service areas (those where they were facing immediate new investment and labor relations pressures) first, and slightly delayed others. This allowed them to execute a contract with a qualified vendor to provide the priority services 9 weeks from the start of the project, and to put in effect a plan to transition total service delivery to selected vendors within 12 weeks time from the project start.
Expected first year cost savings for services were approximately 15%. An additional major benefit was the restructuring of service delivery in a manner that will provide a better understanding of the company’s total print and copy business requirements, which should yield opportunities to reduce costs even more over time.