Molly Gray / Lantern designer
Ohio State officials say they don’t know how the university’s resource-squandering bureaucracy grew to include more than three times the number of vendors OSU President E. Gordon Gee said would suffice.
As of October, OSU worked with 35,000 businesses per year, a number Gee said should be below 10,000 in his address to faculty Oct. 13.
“This is one of those things that just happened to happen over a number of years,” said Brendan Foley, vice president of Financial Planning and Analysis at OSU.
Gee said OSU needs to centralize its business to save money.
“This university has a horrendous bureaucracy,” Gee told The Lantern editorial board Jan. 12. “We’re going to have to move in a number of these areas to a more centralized system.”
OSU spends $1.3 billion per year on goods and services, and Foley said the university should save millions of dollars after trimming the fat.
Since Gee’s October address, the university consolidated its business in two areas as part of what Gee dubbed OSU’s “de-bureaucratization process.” In November, the university signed contracts with United Parcel Service Inc. and OfficeMax Inc. for overnight shipping and office supplies, respectively, which will save OSU an estimated $500,000 per year.
“We have a really attractive contract with UPS that’s much cheaper than FedEx,” OSU chief financial officer Geoff Chatas told The Lantern on Nov. 29. “But the biggie was office supplies. We had people buying things from corner shops.”
In fiscal year 2010, OSU had five shipping providers and purchased office supplies from more than 50 companies, Chatas said Tuesday in an e-mail to The Lantern.
“We will focus on ‘skilled trades,’ like plumbing and HVAC next,” Chatas said, “followed by travel and then janitorial supplies.”
Chatas said OSU bought janitorial supplies from more than 200 companies last year.
Foley, who oversees OSU’s purchasing group, which is working on the project, said the university must take a few more steps before cutting back in other areas.
“At this point, we’re making sure we understand where we’re spending our money,” he said. “We’ve got to get a much better understanding of it to go out to vendors and do bid proposals.”
Gee said OSU has 400 vendors for pens.
“That’s stupid,” he told The Lantern. “We don’t need to have 400 vendors for pens. We can get away with one or two.”
But once the university cuts back the number of businesses it deals with, Foley said, there is no plan to keep that number down.
“We’re working on the plan to cut back, and then we’ll work on getting them not to come back,” he said. “Once the university understands the cost-saving benefits that are realized by doing it differently, my guess is that the university won’t go back to the old ways.”
With budget cuts and tuition increase on the horizon for OSU, Gee said, the university must do more with less. Though officials say they don’t know exactly how many of the university’s 35,000 vendors have been eliminated so far, they say they’re confident OSU is making progress.
In October, Foley called the plan an “aspirational goal,” but he now says he expects the university to see results within the next couple of years.
Gee said consolidating the university’s business is necessary to save money.
“We’re going to have to get a hold of this because it’s costly,” he told The Lantern. “It’s inefficient and ineffective.”