Supplies on Demand
Problem: Managing office-supply inventory and purchases
Solution: A Web site that does it all
Payoff: Cost savings, fewer headaches
Even the smallest businesses can find it challenging to control variable expenses like office supplies. And at growing companies those costs can quickly veer out of control.
At Barfield, Murphy, Shank & Smith PC, a $3.5-million accounting firm in Birmingham, Ala., the task of keeping those costs in check falls to David King, the company's administrator. Among other responsibilities, King oversees the purchasing of supplies like the truckloads of paper, pencils, and three-ring binders that accountants use to prepare clients' financial statements.
King's firm, which grew from 20 to 50 employees in three years, spends upward of $35,000 annually on office products. At first King tried to monitor inventories. But more often than not, employees would fax orders for pens or staples or tape dispensers directly to an office-supply vendor -- without authorization.
"Our vendors would see that the person making the order worked here, and they'd process it," King says. "We'd get the invoice, and I'd look at it and say, 'Why did we order $500 worth of file folders? Did we look at another option?"
Then, on a plane trip last summer, a partner in King's firm sat next to an executive from a Web-based company that specializes in streamlining the supply-ordering process. The partner was so impressed with the executive's company -- called Works.com -- that he asked King to give it a try.
Works.com CEO Bo Holland cofounded the company in September 1997 based on his own supply-buying experiences at two previous jobs. Going through the typical company routine -- filling out, filing, and processing purchase orders and then waiting for delivery -- was always a hassle. "It took too long, sometimes I'd get the wrong items, and we paid too much money," Holland recalls. On the flip side, when Holland ordered supplies himself, he had to file an expense report and wait for reimbursement. So he created a Web site that automates the entire buying process, from purchasing a pencil to accounting for that pencil's cost in the company's books.
Basically, Works.com, based in Austin, Texas, sells office and business products, most available by overnight delivery. But beyond that, it enables purchasing managers to watch their budgets while allowing employees to order supplies as needed. For instance, an accountant can visit Works.com and order a particular box of pencils. The order gets E-mailed first to a purchasing manager for authorization. In King's case, if he decides the purchase fits into the firm's budget, he approves the order, and Works.com delivers it the next day. King even created a virtual supply cabinet stocked with preapproved supplies that employees can order on their own, such as pens, paper clips, and printer toner cartridges.
For King, one of Works.com's best features is its cooperative buying program, which lets his company join forces with others to get discounts. For instance, he used to spend about $25 a case for paper. In the co-op program, King agrees to spend 75% of his company's annual office-supply budget at Works.com, and he pays a $50 annual fee. In exchange he gets paper for just $19 a case. For an organization that purchases thousands of dollars' worth of paper annually, that $6-a-case savings adds up fast.
Currently, King has arranged for only a few staffers to use Works .com. But if the savings keep growing, he envisions a day when all employees will handle their own purchases. "We used to have a bookshelf of catalogs from office-supply vendors that we'd use to make our orders," King says. "Since we've gone to ordering most of our products from Works.com, I've thrown them away."
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