Procurement process HAN Heijendaal campus: overview, bottlenecks, and hub integration

Context and relevance

Sustainable procurement starts with sustainable purchasing. This is an opportunity to challenge suppliers to deliver sustainable solutions and for you to select the best. Moreover, it’s your chance to encourage your own employees not to have an order delivered daily or for every single item, but to bundle them. To be able to streamline the procurement process, you first need insights into how the process is currently organized. We asked a HAN intern to map out this process for HAN. Because bundled zero emission transports from the hub to the campus can provide potentially interesting solutions to improve sustainability and livability, this summary gives recommendations for how the procurement process should be organized if supply is bundled and delivered via a hub.

Research question

How should the procurement process for HAN Heijendaal campus be organized so that shipments can sustainably be transported via the campus and/or city hub?

Research approach

With a literature review, we mapped a typical procurement process. Subsequently, we conducted in-depth interviews with ten stakeholders (buyers, receivers and contract managers) to investigate how HAN procurement works and to what extent this accommodates a sustainable bundled supply via a hub. We developed recommendations on how HAN should adapt its procurement process to be able to implement a sustainable hub supply.

Results

General

Mapping the current HAN procurement process has shown the following:

A lack of transparency and understanding of the procurement process: stakeholders are not always aware of the actions they have to take themselves and the impact this has on the rest of the process. It was also not always clear where a shipment is located.
Substantial numbers of separate orders: not all suppliers are included in the HAN purchasing catalogue, and not all purchasers are aware of this. Thus, they each enter a separate order, resulting in more administration than when ordering via the catalogue.
A lack of storage possibilities for goods delivered to the HAN locations.

The proposed solutions:

Train users to give them insights into the entire procurement process and their roles. It is important to bring employees involved in the entire procurement process together for this. Radboud University has a training programmer for this.
Scan deliveries at the hub and HAN before receipt so that it is clear where a delivery is located.
Manage stock use at the hub, so that the limited storage possibilities on HAN do not pose a problem.
Implement changes for the suppliers by means of: a clear delivery address, renewed KPIs that consider longer delivery times via the hub, complete order labels, and the use of 3-way matching (order, receipt and invoice must match)
Centralized purchasing and ordering system for the three institutions: bundling their orders as recipients. Although effective in theory, this may not be a practical solution.

Impact on living lab objectives

Sustainability & Livability

The aim of the proposed solutions is to streamline the HAN purchase process, cooperate with the other campus institutions, and promote the hub’s use. This is expected to result in more bundled orders, which will then be further bundled at the hub, from where they will be transported to the campus with zero CO2 emissions. Together, this is expected to have a positive impact on campus sustainability and livability.

Costs

The HAN’s procurement process is currently inefficient; staff are not always aware of correct procedures (errors and extra communication) and delivery location is sometimes unclear (searches and extra communication). Tackling these inefficiencies will save costs. Costs can also be saved if the three campus institutions work together more on purchasing, for example, by means of volume discounts and bundled transports. The effect of the use of the hub on costs is still unclear.

Service level

Streamlining the procurement process and scanning before receipt at both the hub and HAN will increase the service level: fewer errors and faster processes. Keeping stock at the hub can also increase service levels as the limited HAN storage impedes processing, while the hub has large storage areas. From there, they can be brought to HAN in small quantities. However, bundling purchase orders and having them delivered via the hub may increase delivery time, reducing the service level.

Conclusions, recommendations and follow-up research

It can be concluded that, even without using a hub, streamlining the HAN purchasing processes can lead to sustainability gains and greater efficiency. We therefore recommend that HAN starts working on this. Collaboration with third parties makes goods flows and related information and communication flows more complex, so a streamlined internal process becomes even more important.

We therefore also recommend that external stakeholders (hub and suppliers) review their own processes. Only when each stakeholder has transparent and well-organized processes, can a good supply chain process be jointly established. To ensure a good process from a supply chain perspective, it may subsequently be necessary for individual organizations to readjust their own processes. This may require a certain degree of flexibility.

This study focused on the global design of the HAN’s procurement process. Further improvements to help the Purchasing Department achieve a sustainable supply chain will be examined in follow-up studies.