Restructuring saves $5.6 mil. in Purchasing, but cuts half of jobs

Administrative restructuring has saved the University's Purchasing Department $5.6 million, but the same efforts have cut more than half of the department's employees. The program has involved a close examination of processes and policies within the department in order to improve efficiency. Officials in the department -- recently renamed the Department of Acquisition Services -- had initially reported savings of $4.5 million, but a recount yesterday showed an extra $1.1 million in savings. The department has lost 12 of its 22 employees since restructuring began. Although six staff members were fired, six other positions were eliminated after employees left voluntarily. Acquisition Services Director Bob Michel said five of the terminated workers have been given new jobs elsewhere in the University. Several of the remaining staffers confirmed that the downsizing has increased their individual workloads. "There is additional work naturally," Purchasing Agent Thomas Leary said. "I personally have had to take on extra work, and I know some of my colleagues have had to as well. I'm having a difficult time keeping pace now." But Vice President for Finance Steve Golding maintained that basing tuition increases on inflation necessitates "a smaller work force on this campus." "That's not John Fry giving us this mandate, that's not the president of the University of Pennsylvania giving us that mandate. That's parents, students, Trustees -- that's Time magazine, that's the marketplace out there," he added. But despite the staff cuts, Michel explained that the department's restructuring efforts didn't begin as a downsizing attempt. Rather, new technology implemented last year made certain positions unnecessary. In 1993, a department review sought ways to streamline the purchasing process. The review produced a three-step program including a definition of the department's responsibilities, some short-term tinkering to fix problems and long-term planning to meet future goals. One such plan included implementing the new Financial Management Information System system last summer. FinMIS allows for computerized approval of low-level funding requests and automatic filing of more expensive requests with the proper administrators. Under FinMIS, a purchasing request process that used to take 14 days now only requires two hours, according to Golding. The new system eliminated the need for employees hired to file requests and handle paperwork, Michel said. Golding acknowledged that the firings produced morale problems in the department. But he said employees across the University suffered from the inefficient acquisition process. Officials insisted that the main focus of acquisition restructuring has been cost-cutting, not downsizing. Beyond FinMIS, other facets of the purchasing shakeup have aimed to improve processes within the department, leading to further savings. In an efficiency-boosting effort begun over a year ago, the department formed commodity teams to examine how the University can consolidate its purchasing contracts with outside companies, and then use buying leverage to cut costs on certain goods and services. A review of temporary employee services is expected to save $800,000 annually, without lowering salaries. And the annual travel expense budget --Ewhich now totals $24 million --will be reduced by efforts to increase usage of University rates on USAir and various hotels, according to Susan Storb, an administrator in the office of the comptroller who oversees travel services.