Institute for Supply Management - Publications - NAPM InfoEdge - Lights, Camera, Action: Your Role in the Utility Purchase

NAPM InfoEdge
May 1999, Vol. 4 No. 9

Lights, Camera, Action: Your Role in the Utility Purchase

How important is the utility buy? A 1995 study of 116 firms by the Center for Advanced Purchasing Studies (CAPS), a program jointly sponsored by NAPM and Arizona State University, reported that those organizations spent $6 million for utilities. "Purchasing of Nontraditional Goods and Services," by Harold E. Fearon, Ph.D., C.P.M., and William A. Bales, C.P.M., also reported, however, that the purchasing department is frequently not involved in the procurement of utility services. In fact, only 21 percent of these firms' utility dollars went through the purchasing department. (See the box on page 9 for more statistics on this topic.) Organizations may have a facilities manager, operations manager, or engineer responsible for these functions. The worst case scenario is that nobody is responsible. This means that when an invoice is received, a check is cut without any thought to what can be done to decrease this cost. What can you do in your role as a purchasing and supply manager to decrease your organization's utility costs?

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