Ohio’s state agencies will process purchase orders 77% faster on commodity purchases
IN BRIEF: Throughout state government, agencies were using their own approaches for purchasing commodities. There was room for improvement across the board -- and a need to think enterprise wide. So a Kaizen team was formed, bringing together people from six state agencies. They analyzed the individual approaches, identified best practices, and created a single streamlined process that makes the most of OAKS and automation.
STREAMLINING: With the new process, the time from submitting a requisition to receiving a purchase order will be reduced from 30 days to 7 days on average.
REWORK REMOVED: The streamlined process will free up an estimated 171,000 staff hours for value-added work.
SMART USE OF TIME: Participating agencies will save at least $67,000 in reduced office costs and paper expense.
These very different images tell the story, with the future state showing just how much the process has been simplified.
Over the years, the purchasing of commodities in state government had become an agency-specific undertaking -- to the point where each agency was doing things a bit differently. The level of efficiency varied significantly. No one was gaining the benefits of a single streamlined approach.
So a Kaizen team was formed, bringing together people from six state agencies (OBM/OSS, DAS, ODH, OhioMHAS, DPS, DRC) along with two people from the City of Gahanna (to provide an outsider perspective). They focused on the procurement process for commodities purchased through Ohio Marketplace -- from the identification of a need all the way to the dispatch of a purchase order. The aim: to come up with a streamlined process available to all state agencies.
The team began by analyzing the various processes currently in use to purchase commodities. With purchasing staff from different agencies in the room -- some of them meeting for the first time -- they were able to uncover strengths and improvement opportunities in their individual approaches.
A subgroup discusses a potential redesign of the current process.
One general discovery had to do with the Ohio Administrative Knowledge System (OAKS) and the level of purchasing-related automation. It was found that agencies enter requisitions in OAKS and create purchase orders through the OAKS workflow -- but that manual, paper-based processes surround these automated steps, causing process-slowing waits and feedback loops.
The team went to work standardizing and streamlining the process. They removed layers of approvals, eliminated the need to enter redundant purchase information in multiple systems, and reduced the number of touches required for processing.
With an eye toward having single-system entry, they developed a way for purchasing information that is entered into OAKS to be automatically uploaded to e-Controlling Board, e-OIT and Procure.Ohio. This change alone will save considerable time.
When it's fully in place, the new process will have just 19 steps. That's a 79% reduction over the typical way of doing things before. The team's analysis uncovered 98 points of inefficiency in the purchasing process -- all of which will be eliminated with the new approach.
According to team calculations, the streamlined process will take an average of 7 days -- from submitting a requisition to receiving a purchase order. That's 77% faster than the estimated 30 days with the old process.
Money will be saved too. With more of the process being done online, participating agencies will save more than $67,000 in reduced office costs and paper expense.