EMC announces first co-operative buying group for Canadian manufacturers
December 20, 2010 by Mary Del
The Excellence in Manufacturing Consortium (EMC) has launched EMC Purchasing Co-operative Ltd., the first co-operative buying group specifically for Canadian manufacturers.
The Co-operative will enable members to leverage their combined purchasing power to receive better prices and terms on the common products they buy. According to the group, benefits include a reduction of material net costs; rebates for members; pool buys and shared container purchases; and a reduction of maintenance repair and operations (MRO) costs, as well as procurement administration costs.
The EMC Purchasing Co-op is separately incorporated and owned entirely by the participating member manufacturers; it is "run democratically by the members, for the members," explained Ian Gray, the Co-operative’s executive director.
"This latest industry-driven initiative is something our members have been asking for," said Al Diggins, EMC president and general manager. "Purchasing has become more and more complex, and the Co-op is another tool to help manufacturers compete on the world stage through strategic collaboration."
Within a week of the Co-operative being incorporated, there were more than 20 inaugural members, and more than 150 companies expressed interest in joining, Diggins told Manufacturing AUTOMATION, adding that there will be no limit to the number of members allowed to join.
More members means more benefits. Gray expects that eventually there could be hundreds of millions of dollars in purchases made through the Co-operative.
In pursuing this co-operative model, EMC recognized a significant portion of the manufacturing purchases made are common with all manufacturers, with sector/plant-specific purchases comprising the balance of the opportunities for companies to work together more strategically.
"We will focus our effort on those product categories where collectively the members’ combined purchases can be leveraged to create even greater value," said Brian Chisholm, general manager of the Co-operative.
The Co-operative has begun the formation of strategic committees that focus on sector/product-specific buying needs. The product categories covered will be driven by the members. The first focus, according to Gray, will be on MRO, which includes freight, uniforms, fasteners and most of the non-core manufacturing inputs.
For each major product category, a small group of members will be chosen to participate on the negotiating team, along with a specialist from EMC Purchasing Co-operative. The preferred suppliers are then chosen based on a wide set of criteria, including pricing, rebates, terms, return policies, service levels and the product brand acceptance.
The Co-operative is in the process of bringing some preferred suppliers on board in the MRO area, and Gray expects transactions to begin as early as February.
Manufacturers interested in participating in this initiative should contact the Co-operative, as applications for the inaugural membership group are being processed now.