Pergamon

Library Acquisitions: Practice & Theory, Vol. 18, No. I, pp. 51-56, 1994 Copyright 0 1994 Elsevier Science Ltd Printed in the USA. All rights reserved

0364.6408/94 $6.00 + .OO

SPECIAL AUSTRALIAN SECTION SUPPLIER PERFORMANCE AND EVALUATION

WHY BOTHER WITH EVALUATION?

ANITA CROTTY

University of Western Sydney, Nepean

PO Box 10

Kingswood NSW 2750, Australia

Abstract - This paper puts supplier evaluation into the context of the changing environment in which library acquisitions are carried out. A number of “forces of change”are identified, and the relevance of supplier evaluation to these forces is reinforced throughout the article. Some practical suggestions for making time for evaluation and making evaluation work for your institution conclude the article.

Keywords-Suppliers, Evaluation, Strategies, Cost-benefits, Australia.

When first asked whether I would put together a few thoughts about supplier performance evaluation, I considered the wisdom of making my private thoughts about this issue quite pub- lic. What I am going to say does not necessarily represent the views of my library manage- ment, or former library management. It comes from my experience in dealing with acquisitions in the ever changing environment of tertiary education. I have been through two amalgam- ations, and fate being what it is, no doubt there will be further changes in the structure of ter- tiary education, given that politics changes all the time. So this is a very broad overview of the environment in which I have found myself and which led me to believe that it is worth bothering with supplier performance evaluation.

This can be rather a dry subject, so allow me to change the context-think of it from the point of view of “supermarket evaluation-why bother ?” Have you ever wondered why peo- ple choose one supermarket over others, or why people change their preference for supermar- kets from time to time? What are some of the factors involved in this sort of choice? How much time is available for shopping, what time of the week is preferable or available, how much money is available, how do you prefer to pay (will the supermarket accept a cheque?), what sort of food is required-“no-name” or gourmet? How many people are in the house-

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hold, what sort of transport is available (do you want home delivery, or do you own a sta- tion wagon), how often is shopping necessary, how far away is the supermarket? All these factors from within a shopper’s personal context are taken into consideration in choosing the most appropriate supermarket. When personal needs change - e.g., the household grows or contracts; you move and your usual supermarket is no longer geographically convenient; your funds become limited-then you reconsider your choice of supermarket. You evaluate your choice of supermarket based on factors in your changing personal context.

Now let us return to the library context; you evaluate your supplier within the changing con- text of your library-for example, how much money you have, how quickly you want things delivered, how convenient are the extra services a supplier offers- how well the supplier fits your library context. Your library context over the last five years, whether you are in public libraries, school libraries, or academic libraries, has changed. If you have not evaluated your suppliers (your “supermarket”), you have not been looking at which supplier you need to be using now in response to those changes. Are you still paying for “home delivery” when you now own a station wagon? Are you still shopping on busy Thursday nights when you have Tuesday morning free?

What is the library context? There are various forces of change in that context, that “big picture” within which we are all managing libraries. First, there is the changed nature of library funding, and specifically for academic libraries. There is no more bottomless pit of money of the 1960s and 1970s. You cannot put your hand out now and expect an institution freely to grant the library endless funds without increased accountability on your part. When you put your hands out for public money, particularly federal government money, you need to account for what you do with it. Witness the jargon in the current literature-performance appraisal, strategic planning, program budgeting-there is an increased focus on reporting what you do and what outcomes are achieved with the dollars you receive. Special project funds are a major source of funding for academic libraries (Department of Employment, Education and Train- ing Reserve funds; Cooperative Research Centres funds; Australian Research Council funds). You do not receive those funds unless you are prepared to describe very clearly the predicted outcomes of expenditure.

Another contextual change to consider is the increasing costs of publications and of over- heads such as freight and exchange rate fluctuations. Figures supplied by Monash University show that in the last ten years, for academic libraries, prices doubled for resources but the value of the Australian dollar overseas went down 40% [l]. In the last year alone, prices for resources have risen 770, and the value of the Australian dollar overseas has decreased 7%. That is less value you are getting for your dollar than you did only one year ago.

The industrial environment also affects the library context. The changes in the nature of work and industrial relations, and the demands for higher productivity, are affecting public institutions as much as private companies. Everyone is being asked to “do more with less.” We are being asked to produce more significant outputs for the same inputs, with the empha- sis on “significant.” In effect, we are being asked to manage our inputs better. In our busi- ness of managing information, in many cases, we have to add extra value to what we are already doing, in order to meet those demands for higher productivity. One way we attempt to increase productivity, to add extra value to our services, is to develop innovative strategies not unlike those of commercial operations-better to market, package, and deliver our ser- vices. Those strategies are often applied to specific functions and operations, procedures and processes, right down to the task level within the operating environment of the library. Sup- plier performance evaluation is simply a strategy for adding value to acquisitions services. You are still in the business of acquiring appropriate resources, but you use the strategy of sup-

Why Bother With Evaluation? 53

plier performance evaluation to add value to what you are already doing-to make the out- comes of your work worth more to you and to your library users.

Some of the factors operating within the library’s institutional context might be strategic planning, competition for funding and the devolution of budget control. Many organizations, and not necessarily only the larger ones, are treading the path to designing and implement- ing strategic plans-that is, a process of establishing the direction of the library followed by the development of relevant goals and objectives for library services and operations. The achievement of those goals and objectives can rest on a strategy such as supplier performance evaluation. Suppliers chosen for their relevance to your library’s needs can help you achieve the goals you spent so much time in developing.

Within your institution, you might be faced with competition for funds. Academic librar- ies are certainly becoming aware of the computer centers as budgetary rivals. Public librari- ans are no doubt aware of funds competition with other community service divisions within the council. You can be sure your competitors are checking their suppliers’ ability to deliver. If their suppliers deliver, it helps them to deliver and they look good to the people with the purse strings. If your competitors for that pot of money are evaluating their suppliers as a “success” strategy and gaining benefits for their effort, then why not you too?

Another change factor in your own environment might be a devolution of budget control- the oneline budget. This type of budgeting gives libraries flexibility in balancing expenditure in the face of constantly changing priorities. However, with that flexibility comes a respon- sibility to manage a “pool” of funds for the best outcomes. Evaluating suppliers is one way of cost effectively managing funds. If you are allocated the funds and you do not learn how to manage them for the greatest and most useful effect, you can be sure forces within your institution will attempt to redirect the money to other uses.

This all sounds like a nightmare of demands and pressures. However, it does not have to be so awful-do not transfer to reference services yet! I often think of the psychotherapy self- help book by Susan Jeffers, Feel the Fear and Do It Anyway. Sometimes you have to say that to yourself, particularly if you are about to embark on something that you have not attempted before, that may not initially be popular with your staff or have unconditional management support. It may sometimes be a case of not just making claims but actually doing something - like supplier performance evaluation- to prove (or at least test) its benefit in your library context.

The best way to turn the concept of supplier performance evaluation into a manageable pro- cess is to start with your library’s operating environment. You may have six staff or 60 staff, one small library or a central library with ten branches-look at your own context. Whatever it is, whatever environment, whatever size budget you are managing, just ask, “What are the library’s priorities?” The answer will give you the questions to ask about your suppliers’ per- formance. Now there should be plenty of clues in your organization about the library’s pri- orities; you don’t necessarily need a fully fledged strategic plan. It is great if you do (even if you have exhausted yourself in the process!). Does your council have a business plan? Is the library mentioned in it? Does your university have long-range plans for course development? What are the marketing and research directions of your company? Any clues will do: reports, promotional material, surveys, and the good old grapevine. Get some clues about your orga- nization’s established priorities (or what they appear to be!).

Next, identify the library’s philosophy of service. Public libraries may have a different phi- losophy of service from that of academic libraries, which may be different again from a cor- porate library. After all, they are looking after information needs driven by different cultures. The philosophy of service may just be sitting in the back of the chief librarian’s brain. Ask

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her or him to share it. Find out how the philosophy is being directed and if there are any plans for redirection. Does the library have any collection development policies and are they writ- ten? If they are not, ask the people who are guiding your collection development at least to talk to you about them.

Last, but most important, what are your clients’ needs? Do you know what your clients really want and what they expect to get (not always the same thing)? You could go and talk to them-sometimes it is the simplest way of finding out. You can use all these clues from within your own library environment to guide you in how best to evaluate supplier perfor- mance and to draft criteria to use in that evaluation.

Funding is not just a cost analysis exercise when you are evaluating supplier performance; it is a cost-benefit analysis. You should look not only at the cost of an item but also at the related services that a supplier might offer that fit in with your environment and add value to your services. Let me illustrate: a large discount is of no benefit if you have to put on extra staff to decipher the invoices; free airfreight from the United States is of little benefit if your collection development strategy has a deadline to build your Australian literature collection and your major supplier does not give you very fast delivery of Australian imprints. It is of little benefit if your supplier has a wonderful electronic invoicing system (where you get your invoices by electronic mail) but there is no interface to your in-house automated system and you have someone rekeying the invoice data. To you, it is a disservice-one that you do to yourself.

Consider also the impact of supplier services on other technical services the library under- takes. For example, you may order MARC records at the same time orders are placed, so you need a supplier who will not deliver variant imprints. How well do your supplier’s reporting mechanisms fit the needs of your clients. They may not want to know if something’s avail- able only in paperback, but they may want to know if something is going to take 12 weeks instead of the normal six weeks to deliver, especially if they are involved in preparing teach- ing materials for a new course. It is not only a matter of focusing the supplier’s services on your acquisitions processes but also looking at how they affect the whole chain of process- ing, till that item leaves technical services and goes to the shelves. Sometimes the implications for how your reader services operate can begin with your selection of supplier. It is vital to think about the impact of your acquisitions services on the rest of the library. You cannot

afford to operate in isolation. It is also important to consider making time for supplier evaluation. A basic rule is to get

management support for the concept and the practice. How do you persuade management to let you make time? The answer lies in avoiding any process that will create a bureaucratic and statistical nightmare. The first principle is: keep it simple and beware of analysis paralysis. There is never going to be a time when you will find the single right method of evaluation, the right questions for every situation and the definitive correct answers, because there is never going to be the single right supplier for every situation and every order. You cannot procras- tinate when you have a budget to expend, when you have deadlines for collection develop- ment, when you have strategic plans to work towards, just because you have not yet developed, piloted, tested, and written a paper on the magic evaluative formula. Given that, I am asking you to take some risks. I suggest that a lot of librarians need to trust their own

professional judgment a little more. They need to believe that the hunches they get about a supplier are worth following up, in a business-like manner. It is because there are no univer- sal “right” answers that you cannot consider the supplier to be the enemy in this environment. The supplier has expert advice that you can call upon. As an example of very simple but effec- tive evaluation, you want fast delivery of a U.S. imprint to meet a particular collection devel-

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opment strategy. You define “fast” as two weeks from date of order. You tell the supplier your definition of fast (crucial communication), and the supplier agrees to it. You evaluate perfor- mance by simply taking a sample of orders (say 10% of the total batch). You note the order numbers and the date you despatch the orders. When the titles arrive, you note the receipt date. If the average delivery turn-round is two weeks, you can relax for a while and feel con- fident about the supplier’s ability to meet your needs. But if the average of the sample is creep- ing up to three or four weeks, then you get back to the supplier and put some time into saying this is not good enough. So your hunches can be very simply checked. You don’t have to invest days and days of statistical analysis to check out a hunch or keep track of performance upon which your deadlines depend. Of course, there are times when more complex evaluation is jus- tified - where long-term and comprehensive analysis and reporting are needed for major deci- sion making. That’s when a major investment in both time and skills is appropriate.

Second, you develop very clear expectations about what you want from the supplier, based on what you need and do not need. Once you have clear expectations, it is much easier to eval- uate the performance. Third, you manage your own time effectively. The idea is to keep the investment in the evaluation method in proportion to the scale of the impact of supplier per- formance on your library. The time you choose to invest in evaluating supplier performance really relates to the importance of what you need to know-that is what will guide you as to what evaluative method is best in any situation. What you need to know comes from how crit- ically the supplier’s performance in a given situation affects your performance, and, in turn, how your performance affects the library’s performance. You find out what you need to know from those clues mentioned earlier-the philosophy of service, the strategic plan, the budget plan, your library users.

Finally, try asking yourself the question, “What will our acquisitions services be judged on?” What criteria will be used by people outside the acquisitions workroom? What factors will indicate that you are successful-whether you stamp the book on one, two, or three sides with an ownership stamp or how you reformatted the order stationery? Probably not-you are going to be judged on your contribution to making information resources available for use, irrespective of your type of library environment. Asking that question will help you select your suppliers. Answering that question will help you evaluate your supplier’s performance. You will be clear about supplier performance requirements, and the indicators of that perfor- mance-speed of delivery, cost, overheads, responsiveness, flexibility, reliability, etc. When you are clear about the critical measures of your own success, then you’ll know how much time to invest in any acquisitions process, not just supplier performance evaluation. For example, if having a Lego kit on the shelf in the curriculum resources collection within two weeks is what you are going to be judged on, then you’ll know how much time to invest in making sure the supplier delivers within that time frame and how much time to invest in making sure the bucket really does contain exactly 454 pieces of Lego.

In conclusion, there is one overriding recommendation: communicate with your suppliers. There is one situation where it is not worth bothering with supplier performance- when you have not communicated with the supplier about what you want. You may think that sounds like so much common sense but there are a lot of libraries that identify their needs and then forget to tell the suppliers, or they tell the suppliers only half the story. You might be clear about your needs, but if the supplier is not, it is really not going to be a fair test of their per- formance. It is not really in your interests to demand specific services from a supplier with- out giving them some insight into the problems you are trying to solve or the objectives you are trying to achieve. It is because they are out there in the private sector, with profit and eco- nomic survival motives, that they make it their business to know about libraries. By bring-

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ing them into 99% of your confidence about your situation, you can use their knowledge for your own profit and survival.

If you are going to evaluate suppliers, tell them your criteria. Some librarians keep suppli- ers in the dark, pitching them against each other. I think you have to ask whether, in the cur- rent funding environment, that would be in your best interests. Does keeping suppliers in the dark really have more beneficial outcomes for your library than giving them the full, possi- bly sorry, story and taking advantage of their expertise? How many times have we, as librar- ians, wished that nonlibrarians would stop telling us how to manage libraries? I wonder how many suppliers have wished that librarians would stop telling them how to run the book trade. Certainly we have plenty of advice to offer, but let’s only give as much as we are prepared to take. That’s not to say that you cannot do a lot of hard business with suppliers, but it will be better business if it is approached on equal terms. There are also reasonable benefits to be gained by finding out what suppliers do to be successful.

So that’s the “why” of supplier performance evaluation. I’ve sketched a very broad picture with just a little detail about how to go about it. I hope that I have given you some reasons for bothering-for feeling the fear but doing it anyway.

NOTE

1. Monash University Library. Average Cost Movement Indexes, April 1976December 1990. Clayton, Vie.: The

Library, 8 March 1991.