Q: How does your organization buy its analytical instruments?

A: Well, typically, somebody needs an instrument, or a department needs several; we put out an RFQ and pick the low-cost vendor.

That's the way it's always been done. Which is probably the best reason in the world to rethink the whole process.

For example, DuPont Agricultural Enterprise has clearly been rethinking its purchasing process. Working together with HP, they have come up with an extraordinary new way to buy analytical instruments. Clearly, a "first".

Buy them all from a preferred vendor.

Whoa, wait a minute. What about competitive bids? What about discounts? What about deals?

Here's the thinking. First, if you buy all your instruments from one vendor, you can command the highest discounts. "By combining a lot of orders and focusing on a single vendor we ended up being able to get better terms," notes Dr. Sid Goldberg, DuPont's Agricultural Enterprise Global Technology Sourcing Leader.

Jay Levine

"And a whole lot more," adds Jay Levine, HP's Global Analytical Manager for the DuPont account. "They can now consolidate their instrumentation, more easily familiarize people with its operation and, with everybody on the same equipment, communicate their analytical methodologies and technical support from location to location more conveniently."

Standardizing on specific instruments, HP Chemstations and accompanying software is particularly appealing to DuPont because of its widespread operations. "When you standardize on a line of equipment," says Dean Decker, DuPont's Corporate Sourcing Manager, "you can transfer tests and methods, run them anywhere in the world and duplicate the results."

Once you start down this path, it's hard to believe you never noticed how smooth it is. With a single instrument supplier,

• you can leverage training and reduce its cost.
• you can establish consistent procurement, delivery, configuration, and parts supply processes that function like clockwork, and
• you can insist that the vendor continually work to make those processes even better.

But what about the security of a second source? If your number one supplier drops the ball - say, by moving instrument development in a direction that's not in your interests - isn't it just safer to have a second supplier you can call on?

Jay Levine's response: "Part of the on-going process is to involve DuPont in our development efforts." That is to say, no more worries about instrument developments going off in inappropriate directions.

Don't leave home without it

There's another aspect to this new partnership - and that's what it is - between Hewlett-Packard and DuPont that is simply extraordinary: the American Express Purchasing Card service billing system.

"One of the issues we had was service," recalls Sid Goldberg. "Customarily an HP repair person would come to fix an instrument in a lab, and someone from another lab would spot him and ask him to come repair this other broken instrument. So, HP having this great relationship with their customers, he wasn't about to say no. Then the invoice would arrive, but there was no purchase order supporting it. DuPont finally said to HP, if you don't have a PO, don't do a repair, because you're not going to get paid."

Sid Goldberg

Of course, this approach caused more grief for DuPont than for HP because now the chemist who needed the repair had to first produce a requisition and get it approved before she could get service. But that cost her two to three days, diminishing laboratory productivity in the process.

It turned out, however, that DuPont was using something called the American Express Purchasing Card for a lot of services in other areas. "So our concept was, if we applied that card to this problem, everything would get speeded up," says Goldberg. "HP would get paid up front, our chemists wouldn't have to go through the purchasing system, the repair could be made immediately, and work could continue with minimal delay."

HP's Jay Levine elaborates. "Every end user now has the authority to call the HP support organization, reference their American Express Purchasing Card and access service as they need it," he says. "They are pre-approved."

American Express Purchasing Card

Just a darn minute! You have company American Express cards distributed throughout your laboratories? How do you prevent abuse?

The cards are coded specific to HP and their usability is clearly defined and specifically constrained to certain kinds of charges.

As an ancillary benefit, DuPont now gets reports from American Express unlike anything they've ever seen before. "It's giving us a better handle on our service costs," Goldberg observes. "When I get a bill, it states specifically who, what, when, and how the service was provided."

The reports have additional benefits. DuPont can now see what instrumentation is eating up a disproportionate number of service dollars and ought to be considered for replacement. They can also see which individual users may need more training.

"Now that we're working closer together, we're looking at further opportunities - in training, in networking, and in data transfer," says Dr. Goldberg.

Dean Decker

"We're pleased with the results," says Dean Decker. "We're pleased that it's worked well for us and we're looking for opportunities to expand it into other DuPont businesses."

Hmm. I better get Purchasing to have a look at this.