Demand Management

Introduction

To maximise opportunities for more sustainable procurement, the issue of sustainability should be considered right at the start of any procurement process. A fundamental step in the purchasing process is assessing the actual demand (or requirement) for the supplies, services or works which are intended to be procured. Perhaps the biggest opportunity for more sustainable procurement is to robustly assess whether the purchase should be made at all – too often the decision as to whether or not the purchase in question is necessary is not fully explored or understood.

Demand management strategies

Individual or service area needs are normally the driving forces behind procurement activity and it is therefore easy to consider these in isolation. However, taken in a collaborative procurement context, many of these requirements will be shared with other individuals, departments or organisations. If a purchase can be avoided, or reduced in scope, due to taking advantage of resources that already exist elsewhere within the organisation (or within other organisations) then this avoids unnecessary environmental or social impacts and, also, has financial benefits for the procurer.

There are three main strategies within demand management which should be taken into account whenever a new purchase is being considered. By undertaking a review of this nature, the most financially efficient and sustainable procurement solution can be identified:

• Eliminate – is the requirement really needed?
• Replace – can we use more effective alternatives?
• Reduce – can we use less?

To help assess the situation in more detail it is useful to consider these questions:

Is there a genuine need for this purchase?
 
There may be other resources already in place within the organisation, or partner organisations, that are available for you to take advantage of – if so, is this purchase still necessary? Producing a business case can help clarify this in more complex procurements and may highlight opportunities you may not have initially considered.
 
Is this a ‘need’ or a ‘want’?
Is there a genuine ‘need’ for this purchase? An honest distinction should be made by procurers between ‘necessary’ and ‘desirable’ requirements.

Do you need the specified amount of the product/service you are purchasing?
By keeping the amount ordered to the minimum actually required you can reduce the amount of potential waste. This is especially relevant if the items you are purchasing may go ‘out of date’ or become obsolete.
 
Is there an opportunity to collaborate with similar work groups to yours?
Does another individual, service area or organisation have similar requirements? If so, could you borrow their existing resources or could you agree to pool your resources to avoid duplicate purchases of the same nature?
 
Is there an alternative product/service which may last longer?
By considering re-useable alternatives you could remove the need for disposal and overall waste. You may also be able to reduce the burden of maintenance and disposal by hiring the product rather than an outright purchase, this would be especially appropriate when the product is used irregularly.
 
Do you need the exact specification you have chosen?
Are all the features you desire necessary? By focusing on only delivering the essential requirements of the purchase this can drive down costs as well as limiting any harmful social or environmental impacts.

Can existing resources be modified or refurbished?
It may be possible to avoid a new purchase by extending the useful life span of current equipment.

An example of demand management

Many of the partner authorities now lease multi-functional devices (MFD’s) for their printing requirements and these have replaced large numbers of desktop printers which previously existed. This can be considered as a good example of both demand management and sustainable procurement in action given that such projects  involve addressing the actual needs of users (i.e. printed documents, rather than a desktop printer), the sharing of resources across departments and energy efficient solutions. The introductions of MFD’s have come about from questioning the demand for individual desktop printers and seeking more sustainable solutions.

Summary

By using demand management techniques, procurers can undertake a more sustainable approach to their procurement activities. The concept of managing demand is particularly relevant to Procurement Lincolnshire and its partner authorities as it supports the stated procurement objectives of collaboration, sustainable procurement and delivering value for money.