Municipal Customer Spotlight: City of Thunder Bay

Sitting on the north shore of Lake Superior and nestled below the Cascades, the City of Thunder Bay, Ontario is known as the sunniest city in Eastern Canada. Rich in resources and a population of 109,140, Thunder Bay is the most populous municipality in Northwestern Ontario and the 6th most culturally diverse city of its size in North America. The City of Thunder Bay provides a balance of services focused on improving quality of life and supporting the economy in a responsible manner. From parks and recreation to transportation, clean drinking water or waste management, Thunder Bay is always working to live up to their motto, Superior By Nature. An OECM customer since 2013, the municipality of Thunder Bay is currently active on four of OECM’s agreements – End-User Computing Devices and Services, Fine Copy Paper, Office Supplies, and Purchasing Card Program. We sat down for a one-on-one chat with Thunder Bay’s Manager of Supply Management, Dan Munshaw, to hear his take on his city’s relationship with OECM, opportunities for growth and change, and how collaborative sourcing and working with group purchasing organizations can make a real difference.

OECM: Dan, firstly, thank you for joining us today. We know that OECM and the City of Thunder Bay have enjoyed a long-standing relationship when it comes to collaborative sourcing. From a sector perspective, can you elaborate on your experience working with OECM and the benefits that can come from collaborating with a group purchasing organization (GPO)?

Munshaw: We were part of the original conversations about how to standardize and leverage public spend, so have been aware of the concept and growth of OECM from cradle to where you stand today. Speaking on behalf of municipalities or pretty much any government entity, we first step back and build a strategic supply chain. Within that strategic supply chain, we have a number of different procurement tools and procurement venues that we can draw on that make the best business sense while balancing a number of needs.

Certainly, within the City of Thunder Bay and essentially all public entities, the use of a group purchasing organization or GPOs is a wonderful strategy. Standardizing, aggregating, and leveraging public spend is absolutely the right thing to do. Of course, there are some things that municipalities buy that are one-offs, such as, buying a road or a bridge, something that perhaps the use of a GPO won’t make sense but for example, your software and computer IT hardware agreements can leverage discounts that I as a standalone entity could never attain on my own.

So [therein lies] that strategic balance, selecting the right procurement tool for the right procurement need.

There is always a very strong need for the large-scale agreements that OECM sets up.

OECM: That’s right, OECM’s goal is to ensure that our customers not only have access to great savings and efficiencies, but also equitable choice and excellent levels of customer service. Are there any other advantages (quantitative or qualitative) and benefits that you would attribute to working with OECM as a purchasing partner?

Munshaw: We [the City of Thunder Bay] have both anecdotal and statistical stories to share; and we turn to you because it makes common sense in a number of areas. For example, if you look at our BMO Mastercard program, we were one of the early adopters of a P-card program over 25 years ago. We were one of the first to have an agreement with BMO Financial Group, however with our spend in the range of $3-5 million, we weren’t big enough to access their cash rebate program. But, when OECM launched their Purchasing Card Program agreement, we did the analysis on our existing agreement versus participating through OECM and you know it was quite clear that the responsible decision was to move and migrate our P-card program into your program.

There are multiple tiers of benefits to participating with OECM – and other GPOs in general – apart from direct cost savings. For instance, to have my team prepare a formal tender or a formal request for a proposal or RFP, there’s a substantial amount of time and cost that’s associated with that process. Another element that comes into play is that in municipal government we are truly “a jack of all trades” when it comes to public procurement. We are buying horses to body armour to ammunition to baby swimming diapers to roads and bridges. We are very good generalists, but because of the vast array of products, we often lack the internal [bandwidth and] technical competencies to do a deeper dive. I will use software as a primary example because procurement of software and core knowledge of that area has become a specialty in the market. We just don’t have that strength of knowledge, so turning to an organization like OECM who has made that investment and brought on the right people to do those jobs, we recognize and appreciate that. Knowledge, the cost of administering the process, the hard-cost savings, these are the core considerations when making the strategic decision to using OECM or GPOs.

OECM: Those are all great examples of what we bring to the table. Of course, we’re also always interested in hearing about how we can work to better align our business offering with the needs of our customers in the municipal sector. What, in your opinion, are some opportunities for OECM to consider as we move forward?

Munshaw: What launched your organization was the education marketplace, and through our own Lakehead Purchasing Consortium (LPC), we are very familiar with that market and know that OECM has done a really great job in that area. The Municipal sector shares a lot of commonalities to elements of the education sector but there are also elements that are quite a bit different, and that’s in the scope and width of what our procurement needs cover. When you talk about the services, we [municipalities] are responsible for such as EMS operations, Police operations, and transit operations, these in themselves are specialty areas, and that’s an opportunity that’s out there.

We believe that there is great opportunity for OECM to expand into the municipal market, there is no question about it, but I think GPOs should do appropriate research so that when an organization approaches a municipality, they come prepared to demonstrate that they know their [the municipalities’] environment and what their issues are, and that they are bringing solutions for those issues and can work within their systems.

OECM: Invaluable insights for our teams – as strategic sourcing partners, engaging our customers using deep dives and research is key. OECM’s customer-centric approach continually emphasizes our customers’ goals. Does your municipality have specific goals for joint purchasing/collaborative sourcing going forward? How can OECM help?

Munshaw: The goals for the City of Thunder Bay are very similar to other municipalities across Canada. GPOs do a wonderful job at consolidating, standardizing, and leveraging spend and the biggest benefit is cost reduction. However, most municipalities to varying degrees are bringing in substantially new value judgments and value decisions that go way beyond the simple issue of price. Specifically, now written right into Thunder Bay’s RFPs, 5% of the decision criterion is based on diversity, inclusion, and social justice and 5% of our decision making is based on sustainability and environmental elements. Ten per cent of our decision criterion is based on these elements and we’re looking to expand those. And so, tell me what you’re doing on that [to drive change] – have you included social justice, are you aware of abuses within Canada’s supply chain, are you incorporating these other elements? If your organization is doing it then bring it forward, move beyond price, tell us amazing stories, and show us how decision-making is incorporating these other values.

In closing, we want to say thank you to each one of you and your team, you bring a lot of value to frontline tactical procurement areas. Whenever we have a procurement need, we look at appropriate GPOs, we do an assessment, and if it fits, we align the business with that organization. Part of our fit is looking at elements beyond cost and if it does fit, we are there – and I believe, our spend with OECM is a testament to that.

*This interview has been edited for length and clarity.