Harnessing University Procurement Power for Social Good

A few decades ago, the role of a university procurement officer was fairly straightforward: Buy the right products, get the best possible price, and track spending. Job done.

Now, social missions have been layered into that role. These can include supporting local businesses, seeking out minority-owned companies, and minimizing harmful environmental impact, including climate change. Sustainable procurement has complexified: what used to mean just buying recycled copy paper is now one of the largest levers institutions can pull to meet their environmental and social goals.

“Universities are on the front edge of our work in the United States to make the supply chain and business operations more sustainable,” says Antwaun Griffin, Head of Socially Responsible Purchasing for Amazon Business. “Procurement is one of the easiest ways to be more impactful in terms of environmentally conscious behavior.”

There is clear evidence of the rising support for socially responsible purchasing. In a survey of its members, the National Association of Educational Procurement found last year that two of its members’ top ten priorities for higher-education procurement for the future are sustainability & diversity and equity & inclusion.

Universities have been turning to Amazon Business to meet their goals, Griffin says, because they, like many other organizations, have been struggling with finding and keeping qualified employees. Amazon Business can reduce the reliance on staff, he says, by boosting efficiency and providing services.

Create Spend Visibility

The desire to buy from smaller and more diverse sellers, for instance, can result in the need to find and vet small businesses. Griffin says Amazon Business makes it easy to find thousands of small, qualified third-part sellers, and helps universities track purchases—even when they are in relatively small amounts and across a wide variety of departments. The Spend Visibility dashboards that Amazon Business provides can help universities track spending in real time, avoiding audit lag.

The dashboards can monitor fine-grained detail of purchases, including those made by individuals within the institution using purchase cards. “It's always been a challenge for universities to have a good sense of who they're doing business with,” he says.

Richard D. Elmore, Chief Procurement Officer at Pennsylvania State University, said that he was able to use Amazon Business Analytics credentials report to find the baseline for the institution’s socially responsibly purchasing. “I was able to quickly see how much we have been spending with diverse suppliers,” Elmore said, “and also see how much we have spent with small businesses through Amazon Business.”

Building on that baseline, Elmore was able to build preferences for registered small businesses and diverse companies into Penn State’s purchasing procedures. As a result, over 16 percent of Penn State’s Amazon Business spend now goes to such suppliers.

The university’s next focus is to create purchasing preferences for local suppliers not only near the university’s main campus, but also in communities surrounding its 19 related “commonwealth campuses” throughout the state.

Balancing Procurement and Sustainability

North Carolina State is another large public university spread out over its state. The university has 12 colleges, 150 departments, 2,200 faculty and 6,500 staff members. Even with 36 staff members dedicated to procurement, their missions of strategic sourcing, supplier relationship management, corporate cards, and warehouse operations are a challenge. Like other large research institutions, NC State must support some centralization in procurement—for instance, all purchases related to government-funded research have to be compliant with federal rules. But the university must also facilitate decentralized demands, since it believes that faculty and staff know best what they need.

When it comes to protecting the environment, NC State is bound by both an executive order issued by the governor and a state law with environmental requirements, such as using products with recycled content. To strike a balance in guiding purchasers toward environmentally friendly products without too much interference, the university requires purchases of over $5,000 to be made according to university guidelines, while providing a list of environmentally oriented questions to consider for purchases under $5,000.

The university turned to Amazon Business to manage the university compliance requirements while giving purchasers maximum freedom and maintaining institutional spend visibility. The NC State procurement team has Amazon Business do more of the work of monitoring transactions, so the university can focus on larger strategic efforts.
The university noticed early on that many purchasers preferred Amazon for its prices, variety, and speed of shipping. The university integrated its eProcurement system with Amazon Business; as a result, university procurement staff was able to see its purchasing data in more detail.

“With our integration with Amazon Business, we now have all of our colleges and individual academic departments buying in one place, which is a great thing since they understand their needs better than the central administrative office,” said Sharon Loosman, director of procurement and business services at NC State.

Buyers using Amazon Business are aided by certification programs that support their institution’s social goals. Johns Hopkins University, for instance, uses Amazon Business’s Diversity Certifications program to meet its commitment to increase contracts with minority and women-owned businesses. The university’s procurement team can filter search results by seller certifications to make sure they hit spending goals. Given that the university spends $1 billion annually on procurement, its supplier diversity program has a strong impact.

Amazon also has a Climate Pledge Friendly program to make it easier for purchasers to find sustainable products and those that help preserve the natural world. As socially responsible purchasing looks to the future, Griffin says that he sees growth among universities in “buy local” programs and in the desire to seek out smaller and more diverse sellers.

“Universities are fantastic economic development engines in their communities,” he says. “So diversifying and strengthening the small business seller base that is local to them is one of the key ways we're enabling our university partners.”

Originally published on The Chronicle of Higher Education