THE OAKLAND SCHOOL DISTRICT

BUSINESS PURCHASING 104-170

MARCH 6, 2012

OVERVIEW In reviewing an analysis of his school district’s paper buying habits, supply manager Gene Smith uncovered some interesting statistics regarding the Oakland School District’s supply ordering habits. Through the growth of the school district, purchase orders for supplies had risen to astronomical levels. Over the course of the previous year, purchase orders (including original orders and change orders) had grown to an astounding 36,842, or nearly 3,100 orders per month. These orders came from one or more of approximately 1,300 suppliers. Even more astonishing was the low average value of each of these orders. 35 percent of the orders placed were
Space issues can vary from building to building based on their amount of free space for storage of stock items and/or the physical size or volume of the products allotted to that school for the quarter or semester. The accounting issues encountered may not be of the, “How much did it cost?” variety, but more of the vein of, “What was it used for? Who used it? When was it used?” These issues could be solved using a product log. The person requiring the equipment would need to complete the log prior to obtaining the product. Each quarter, or more frequently if necessary, the log could be faxed or emailed to the accounting personnel. The issue of employees taking advantage of the stocked supply for personal use is not an issue that is unique to any company. The best way to circumvent this practice is to know what supplies are going where per whom. This could be avoided by utilizing the same log system described in the accounting issues section. The third recommendation is to reduce the number of orders placed per month by centralizing the ordering process. When supplies are needed now, a purchase order system is utilized by the requestor. These orders can be placed by anyone in the district and often result in multiple, tiny orders being placed with suppliers on a daily basis. Through the centralization of the ordering process, the number of orders placed per day could be reduced as could the number of