Purchasing is one of the most customer-facing responsibilities managed by the school's business operations. The purchasing department must balance the diverse educational needs of the institution while maintaining clear communication with stakeholders, navigating financial constraints, and addressing logistical complexities. Ensuring that all necessary materials and services are acquired efficiently and cost-effectively is the core of the work involved, however, in this article our Senior Consultant Hans-Peter Naef looks more closely at those aspects which are sometimes neglected.
Though the terms "purchasing" and "procurement" are often used interchangeably, they refer to distinct functions. Purchasing is the transactional process of acquiring goods and services, involving activities such as processing requisitions, placing orders, and receiving items. Procurement, on the other hand, encompasses broader aspects, including supplier selection and management, negotiation, and contract management. While purchasing focuses on the immediate act of buying, procurement involves planning, sourcing, and managing relationships with suppliers. While purchasing may be managed in the business office, the procurement function may be de-centralized across the whole school.
Get your process right!
Establishing clear purchasing policies and procedures, particularly through a well-structured purchase-to-pay (P2P) process, is essential for the efficient operations. A properly implemented P2P system ensures that all stages—from purchase requisition to payment—are streamlined, minimizing delays and reducing the risk of errors. Setting the right approval levels is key so that smaller, routine purchases can be processed quickly, while larger or more complex transactions receive the appropriate scrutiny. This ensures that critical resources are secured without unnecessary bottlenecks and the "schoolwide customers" are kept happy.
Within the P2P procedure is very important to specify which types of purchases are excluded from the policy and should follow a separate approval process. By clearly defining these exceptions, and how they are dealt with, the school can speed up the purchasing process without compromising financial controls.
Share the load in supplier management
Supplier management is a critical aspect of procurement. It is important to coordinate which departments lead specific relationships. Facilities or IT teams may select and manage certain suppliers. The procurement function within the business office works closely with these teams to ensure that the suppliers managed consistently schoolwide. It is unrealistic to expect that staff in purchasing should lead a multitude of supplier relationships with products or services that they do not understand, they can however help ensure that the relationships are managed and evaluated within the broader policies of the school.
Staff for success
In many international schools, the purchasing department is often staffed by administrative team members with little or no formal training or experience in purchasing and procurement. While they may be familiar with the school’s internal processes, they frequently lack the specialized knowledge required to effectively manage the complexities of acquiring materials and services, particularly in a school context. To address this, schools should invest in the professional development of their administrative teams, recruiting good quality staff and providing formal training in procurement best practices, contract negotiation, supplier management, and contract management. An efficient, customer focused purchasing function goes a long way to supporting the daily running of a school.
Automate where you can
Many schools rely on manual procurement processes or outdated systems, which can lead to inefficiencies, delays, and errors. Automating procurement processes through dedicated procurement workflows can greatly improve accuracy and reduce the administrative burden.
Do away with the Bureaucracy
Often a school's approval levels have remained constant as a school has grown in size. Organizations create proxy signatures to decentralize approvals from leadership and the Board. If the approval levels are not reviewed then schools may suffer from overly bureaucratic approval processes, where every purchase—regardless of its value or complexity—goes through multiple levels of approval. This can slow down procurement and lead to bottlenecks. Instead, schools should adopt a more flexible approach, where only high-value or high-risk purchases require multiple approvals, while routine purchases can be processed more quickly with less scrutiny needed.
Right Size your competitive bidding levels
Setting competitive bidding levels too low can result in an overly bureaucratic process, causing unnecessary delays for routine purchases. When low-value items require the same bidding process as high-cost goods, it means that time and resources are wasted on gathering multiple bids for items that do not significantly impact the budget. This can slow down procurement, hinder the timely acquisition of necessary materials, and frustrate your purchasing team until they leave. Additionally, setting low bidding thresholds can damage relationships with trusted suppliers by creating excessive hurdles for small transactions, ultimately affecting the school’s operational efficiency and ability to secure quality services and materials in a timely manner.
Defend your supplier database
Various departments within the school play a crucial role in maintaining clean and up-to-date data in the school’s computer systems. For instance, the admissions team is responsible for student data, while the HR department manages employee records. Similarly, the business office oversees the database of suppliers. However, unlike in commercial organizations where strict controls govern supplier selection, a school community is notorious for selecting suppliers outside the usual channels. Manage these rogue orders strategically and be creative in avoiding setting up another supplier in your systems which you may never use again.
Don't lose sight of your exchange rate exposure
Sourcing materials from different countries can expose your schools to exchange rate risks through currency fluctuations, which could adversely affect budgets.
Changes in exchange rates can make the cost of materials unpredictable and can cause budget overruns. If you can estimate your purchasing exposure to a currency, consider hedging to minimize exchange rate risks. If possible, find local alternatives for some materials or enter into contracts with suppliers in your host country currency to avoid price fluctuations.
Cooperate with other International Schools
Depending on the circumstances and location of other international school, the possibilities of co-operative purchasing and procurement could be explored. Groups of schools in the same location could combine to purchase items to obtain logistical savings and quantity discounts. Although this step does come with it's own challenges the savings may make it worthwhile.
One goal of any school's purchasing function is to provide real-time insights to divisions and departments regarding their spending in relation to the budget. Achieving this can be challenging for various reasons, but by implementing some or all of the strategies outlined in this article, schools can significantly enhance the effectiveness of their procurement and purchasing operations. This improvement not only elevates the quality of the services provided but also positively influences how these functions are perceived by their stakeholders.
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