The Nuts and Bolts of Government Contracts
This approach is tailor-made for ordering custom goods and services, such as print. Custom goods and services must be specification defined when ordered. They are not off-the-shelf and cannot be ordered from a warehouse.
For instance, a transportation/freight services provider procures print for a wide variety of internal and external applications. These include direct mail, marketing and promotional material, manuals, forms and labels and internal publications. Over a period of several months, using AVS Technology, a recommended set of best procurement practices, and a robust communications and workflow management system, the company ordered 54 print jobs for which the average value of each job was $6,288. Bids from printers for the projects ranged from $168 to $154,975. The market savings achieved for this body of work was 37 percent, comparing the cost using the new procurement approach with what the cost would have been if the buyer had used traditional methods that rely upon negotiated prices with a limited number of vendors.
The average savings for all organizations licensing the patented automated vendor selection procedure is 42 percent.
AVS Technology by itself does not deliver the 25 percent to 50 percent cost reductions. This only occurs when the new technology is used with a series of procurement best practices and a robust communications and workflow system. The buyer also gains total transparency, strengthened quality controls, full reporting and accountability and complete documentation and archiving of every action from planning through production to on-time delivery and invoicing.
Historically, regardless of the industry involved, every procurement or supply chain solution sought to attract business customers that wanted to achieve the purchasing trifecta of "good, fast and cheap." That was impossible because the buyer could only achieve two of these three goals at any one time, not all three simultaneously. Now they can. The benefits are obvious. Buying products and services at a low cost, with top quality results and on-time delivery, should be a business priority for all organizations in 2011.￼