Cooperative joint purchasing and member service system
The co-operative collects the need for joint purchasing by members and aligns the supplier's offer. The member sees when its quantity is approved and how the delivery takes place.
Seed, fertilizer, feed, fuel, insurance, technical and consulting needs are collected by separate surveys or after the fact. The cooperative does not make use of the scale, buys at sub-optimal times and cannot offer the best conditions for members.
How the solution works
- Gathering a Preliminary Need
- Relatively appropriate conditions for joint supply
- Obtaining a binding member order
- Deliver to supplier and distribute real delivery
- Agree changes and settlement
Key challenges
- General procurement and services do not sufficiently rely on the members' demand forecast
Solution capabilities
Need and Promise
The forecast, final offer and order have separate states. The member's silence is not considered an automatic acceptance of all conditions.
Comparison of Proposals
Proper specification, delivery, quantity and total price are evaluated. A lower unit price alone does not show a better purchase.
Shortage distribution
The rule of partial delivery is agreed in advance. An alternate item or later date is passed with the member's decision required.
Member's response
Its order, delivery and account source are visible. Individual quantities of other members are not opened solely for the purpose of joint purchase.
Business context
- General procurement and services do not sufficiently rely on the members' demand forecast
- Seed, fertilizer, feed, fuel, insurance, technical and consulting needs are collected by separate surveys or after the fact. The cooperative does not make use of the scale, buys at sub-optimal times and cannot offer the best conditions for members.
- The joint purchase gives the member a clear commitment
- It is important for the farm to know when the expressed need has become an approved order and under what conditions it will be executed. Comparative bids from suppliers allow for a reasonable overall choice. The cooperative can better plan the service and coordinate the allocation of the missing quantity transparently.
Core features
- Need and Promise
- Comparison of Proposals
- Shortage distribution
- Member's response
Key integrations
- Sources of orders from members and suppliers
- Real order, delivery and account status.
Potential impact (%)
The ranges indicate an illustrative relative change in the metric under the stated assumptions. Results depend on the starting position and actual use of the solution. Percentages for different metrics must not be added together.
Co-order reconciliation work
16–42%Decreasing
This illustrative scenario assumes that 40-70% of information searches and repeated cross-checks can be addressed. That share is assumed to fall by 40-60%. Company data is needed to verify both the addressable workload and the resulting change.
Measure working hours for one overall purchase to match.
Unmatched change in quantity
5–25%Decreasing
This illustrative scenario assumes that 20-50% of missed actions can be identified through task and deadline tracking. That share is assumed to fall by 25-50%. Company data is needed to verify both the addressable share and the resulting change.
Count the changes that caused an unconfirmed difference in the member's or supplier's commitment.
Share of members re-involved in joint procurements
1–5%Increasing
Sample starting portion - 65%. Assumption: 10-25% of the remaining cases involve unclear execution of co-operative co-order; a solution would help resolve 20-40% of these cases.
Re-involved members are divided by a group of all comparable members of previous purchases. Similar seasons and the scope of member's need are compared.
Conditional calculation scenarios. The assumptions have not been validated against client measurements.
When this solution is relevant
- The cooperative organizes joint procurements of members whose needs, approvals and deliveries need to be aligned.
- The preliminary need for members is confused with the quantity ordered, and partial deliveries are distributed manually.
Implementation requirements
For the course of joint procurements, members' needs, approval of final bids and order commitments are matched. Allocation of missing quantities and vendor changes have clear rules and a feedback to members.
Further expansion
- Other categories following their revision of the specification, allocation and variation conditions.