A Non-Profit Cuts Purchasing Costs in Half Using Tradogram
“In our case, it saved the lives of countless individuals who depend on us to survive. I would highly recommend it to anyone working in sourcing, purchasing, and procurement.”
Logistics and Purchasing Manager
- Industry: Non-Profit
- Employees: 200+
- Location: San Diego, California
Founded in San Diego in 1950, Father Joe’s Villages has served the homeless and those living in poverty for over 70 years. Since then, it grew into a significant force in the fight against poverty in San Diego.
The organization champions its mission to prevent and end homelessness, one life at a time. It embodies the values it stands for, which are the foundation of its work and its “CREED.” Those are compassion, respect, empathy, empowerment, and dignity.
CHALLENGES FACED BY NONPROFITS USING TRADITIONAL PROCUREMENT PROCESSES:
As a nonprofit organization, Father Joe’s spends 86% of its donation-generated income on its social relief programs. This leaves little to spend on purchasing and procuring the goods it needs to drive its programs’ success.
Over time, with this ever-looming lack of operating capital, it became increasingly difficult for Father Joe’s to maintain the level of support it had always provided to the community.
“On average, it took us two to three business days to process a single purchase order,” said Francisco Ortega, Logistics and Purchasing Manager at Father Joe’s.
Funding scarcity is a typical problem nonprofits face. However, this was amplified in the case of Father Joe’s Villages.
Why? The homeless population in California grew by a startling 16% between 2018 and 2019. Father Joe’s found it increasingly difficult to meet the demand for its services. It became obvious that something had to change.
Logistics and Purchasing Manager
OBJECTIVES OF A PROCUREMENT SYSTEM:
Eventually, the costs involved in procuring the materials and goods needed to properly run the organization became unsustainable. That’s when Francisco and his team began searching for a procurement automation solution.
Francisco shared his inside perspective of the uphill battle his organization faced:
“We were manually tracking physical paper trails. We couldn’t facilitate effective communication with teammates and suppliers. Plus, we struggled to manage supplier negotiations as well as purchasing contracts and agreements.
“It was a growing challenge to report on our spending levels and identify cost-saving opportunities. Essentially, we faced obstacles at every stage of the supply chain. We knew we needed a new procurement system.”
Including approval routing, requisition and purchase order creation forms, and automated 3-way match documentation for invoices and deliveries.
Supplier Management Tools
Profiles for tracking supplier evaluations, and identifying which suppliers are receiving the highest spend allocation to identify cost saving opportunities.
Father Joe’s Offers Behavioral Health Services
The following challenges were identified as objectives for improving Father Joe’s Villages’ operations. Traceable KPIs were established to determine whether Tradogram was successful as a solution:
- Automate purchasing management and inventory tracking.
- Replace all manual, paper-based processes with digital tracking and management.
- Remove bottlenecks in their approval process with automated workflows.
- Improve decision making with the use of accurate metrics, analysis, and reporting.
- Implement an end-to-end supply chain management process, from requisition to delivery.
RESULTING BENEFITS FROM IMPLEMENTING TRADOGRAM’S E-PROCUREMENT SYSTEM:
After implementing Tradogram, Francisco reported the following “before and after” findings from a mix of statistics provided by the system, as well as observable changes to employee workflows:
|Before Implementing Tradogram||After Implementing Tradogram|
Purchase Order Processing Time
Including Creation, Approval, and Forwarding to Supplier
|2-3 business days||A few minutes|
Cost Savings Realized and Attained
Through Detailed Custom Spend Report Generation
|Limited spend visibility and capacity to pull detailed information.||Father Joe’s reported a reduction in the total cost of their purchasing efforts by more than 50%.|
|Purchase Order Processing Method||Sending Paper Orders via Snail Mail||Routing Electronic Orders via the Tradogram Platform|
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CLOSING REMARKS FROM FRANCISCO
With Tradogram in place, everything is automated, the team has more time and money to spend on the population it serves, and Father Joe’s is alive and thriving. Francisco and his team were able to reduce the total cost of their purchasing efforts by more than 50%. That money is now spent serving the needy.
Father Joe’s Villages now leverages the system to track their efforts at every stage of the supply chain. All tasks are completed through their Tradogram system. Their efforts are more effective, their data is more accurate, and they can make smarter decisions with comprehensive reporting.
Francisco also had this to share about his experience with Tradogram:
“Tradogram is a great, user-friendly system, any organization engaged in purchasing and requisitions would benefit from. The system gives us end-to-end tracking capabilities and full visibility into every stage of the supply chain.
Ultimately, the solution cuts many unnecessary steps out of our previously-manual process and gives back the extra time to our purchasing staff. It’s a great system and I’m excited to see what the future holds for it. In our case, it saved the lives of countless individuals who depend on us to survive. I would highly recommend it to anyone working in sourcing, purchasing, and procurement.