The Supplier Consolidation team is working on two new ways that the community will purchase goods and services: an American Express Corporate Purchasing Card (Procard) and the MIT Electronic Catalog (ECAT). Here are some of the highlights.
Anyone who is authorized to purchase routine goods and services for MIT as part of their job responsibilities could use a Procard. The decision about which employees receive a card will ultimately be made by each account supervisor, but the team is recommending that cards be issued to all people who currently place orders.
The Procard will reduce paperwork because there will be no requisition, purchase order, or invoice. Use of the card will speed orders since no prior approvals will be needed. This will dramatically reduce the costs and work of processing small dollar purchases because MIT will pay only one monthly bill for all orders placed Institute-wide with the "partner" companies.
The team has already identified some of the partner companies, and will continue to add others in the future. The Procard will be accepted only by our supplier partners, so it can't be used to book a personal trip to Disney World. However, it will work to purchase items like scientific and office supplies, gas cylinders, and temporary clerical help services.
The dollar limit per transaction for Procards will be $500 initially. People with Procards will place orders by phone, fax, walk-in, or using the MIT Electronic Catalog, described next. The supplier will ask for the account numbers at the point of sale, and information about each Procard order will be posted to MIT's General Ledger on the next working day. Object codes will be assigned automatically.
Electronic Catalog (ECAT)
ECAT is an on-line sourcing, pricing, ordering, and payment system for purchasing from MIT's supplier partners. Customers will use the Internet and World Wide Web technology from their desktops to use this service. It provides current, complete product descriptions and illustrations plus pricing and availability. Catalog pages display the products and the reduced prices negotiated between MIT and the supplier partners.
Other features of ECAT include searching capabilities, order history for up to a year, and customized order forms for each Procard holder (with account numbers, shipping address etc.). ECAT will be hooked in to the American Express Procard system for charging purchases. For security, Procard information will always be encrypted and authenticated using Kerberos technology.
Orders can be split by percentage to as many as three MIT accounts. Another advantage is that ECAT's direct link to the fulfillment system of a supplier partner will speed delivery.
Of course there will be some purchases that cannot be made using the Procard or the Electronic Catalog. However, it's important to know that currently, 87% of MIT's total purchasing transactions are for under $500, yet those account for only 2.8% of our total expenditures. By removing the costs associated with all that paperwork, MIT can save money and also acquire what it needs more quickly.
Procard and ECAT will be rolled out to the community within the first six months of 1996. These applications are the first of many which will require computers to be connected directly to MITnet. Senior management is committed to making this happen.
A version of this article appeared in MIT Tech Talk on December 13, 1995.