Overview
The Cornell Cost Reduction (CCR) program is a systematic approach to evaluating the advantages and opportunities to Cornell University of reducing the total cost of acquiring goods and services.  The program aims to maintain or improve the quality, service, and other attributes of goods and services to end users. The CCR program is administered by the Office for Purchasing Services under the authority of the Division of Financial Affairs. 

Total Acquisition Cost
Total Acquisition Cost is the total cost to Cornell University for acquiring a product or service.  This total cost includes such direct cash categories as freight and early payment discount terms.  However, there are other quality and service costs that may be part of the determination.  These  costs include those for spare and replacement parts and replacement over the product's lifetime; downtime for repairs, processing quality complaints and lead time (e.g., safety stock); and disposal costs, etc. 

Intangible savings can include business process improvements that reduce the estimated time to perform a task.  Intangible costs can include risk factors estimated with the project's potential success or the estimated adoption rate of a preferred supplier agreement or contract supplier.

Costs to implement the program should be subtracted from the total savings, e.g., supplier assessment costs, testing and validation, tooling, and disposal of existing equipment or contracts. 

What's Included:

• Improved discounts and prices from existing suppliers for existing goods and services, utilizing a combination of competitive bidding, strategic sourcing, benchmarking tools, and intellectual information
  
• Savings from new suppliers for equivalent goods and services, analyzed using the strategic sourcing process, and identified as an approved alternative supplier
  
• Changes in product or service specifications recommended that will yield equivalent or improved customer functionality, which reduce the cost without sacrificing quality, service, or lead time (no adverse customer impact)

What's Not Included:

• Changes in ordering patterns (e.g., grouping orders monthly instead of individual releases as needed)
  
• Savings from Cornell RFP's received prior to 10/13/03, but not yet implemented
  
• Savings associated with specification changes, which may reduce invoice costs, but also increase other costs (quality, service, lead time, delivery)
  
• Increased use of existing preferred supplier agreements or Cornell contracts
  
• Reduction in "process costs," e.g., reduction in numbers of purchase orders, numbers of quality complaints, or time necessary to process an order, etc.
  
• Reduction in head count and associated personnel costs

Cornell Cost Reduction Results

Date	Team	Category	Annual Savings Amount	Total Savings  Amount1
5/2/05	Graphics Printing	Printing	$6,101	$6,101
4/28/05	Lab & Sci Equip	Scientific Chemicals	$70,000	$210,000
4/28/05	Lab & Sci Equip	Scientific Chemicals	$77,818	$233,454
4/28/05	Lab & Sci Equip	Scientific Chemicals	$7,800	$23,400
3/25/05	MRO	Furniture	$15,000	$45,000
3/25/05	MRO	Furniture	$15,000	$45,000
3/25/05	MRO	Furniture	$10,000	$30,000
3/25/05	MRO	Furniture	$35,000	$105,000
3/22/05	Graphics Printing	Printing	$100,000	$100,000
3/14/05	MRO	Uniforms	$787	$3,936
3/4/05	Graphics Printing	Printing	$16,000	$16,000
2/25/05	MRO	Building Maintenance	$346,674	$4,039,736
2/25/05	MRO	Building Maintenance	$324,139	$4,863,084
2/24/05	Lab & Sci Equip	Scientific Supplies	$34,000	$102,000
2/24/05	Lab & Sci Equip	Scientific Supplies	$13,000	$39,000
2/24/05	Lab & Sci Equip	Scientific Supplies	$44,000	$132,000
2/24/05	Lab & Sci Equip	Scientific Supplies	$183,068	$539,204
1/5/05	MRO	Laundry Services	$11,466	$57,330
12/6/04	Lab & Sci Equip	Scientific Supplies	$109,000	$327,000
11/22/04	Lab & Sci Equip	Scientific Equipment	$62,000	$186,000
11/18/04	Lab & Sci Equip	Scientific Equipment	$31,000	$93,600
11/16/04	Lab & Sci Equip	Scientific Equipment	$30,000	$90,000
11/8/04	Lab & Sci Equip	Scientific Equipment	$14,000	$42,000
11/4/04	Lab & Sci Equip	Customs	$5,616	$5,616
11/2/04	MRO	Furniture	$3,612	$3,612
10/29/04	Technology	Office Supplies	$486,000	$2,288,000
10/29/04	Technology	Audio Video	$280,000	$1,317,000
10/29/04	Technology	Copier Equipment	$264,000	$692,000
10/19/04	Lab & Sci Equip	Equipment	$8,790	$26,370
8/18/04	MRO	Music Equip.	$5,001	$5,001
6/16/04	Lab & Sci Equip	Sci. Equip.	$5,498	$5,498
5/21/04	MRO	Food	$162,450	$812,250
5/14/04	Lab & Sci Equip	Gases	$81,278	$406,390
4/21/04	Lab & Sci Equip	Vehicles	$18,700	$18,700
4/5/04	Graphics Printing	Paper	$14,467	$14,467
3/12/04	MRO	Furniture	$50,948	$50,948
3/12/04	MRO	Bldg Maint	$164,232	$164,232
3/2/04	Graphics Printing	Printing	$4,941	$4,941
Totals			$3,111,586	$17,143,870

1.  May involve multiple-year savings during the contract.