“No, I don’t want any help or free money. I want to do it by myself, the hard way!”
Do you know anyone in your organization who thinks this way? It’s typical of managers who, set in their ways, refuse to embrace “best practices” for optimizing their businesses. One such best practice is the use of external teams to assist in buying and sourcing for your casino. These teams, or Group Purchasing Organizations (GPOs), can improve your bottom line in the first year, with little to no out-of-pocket expenses.
GPOs work through a process called Procure-to-Pay (P2P), a business process that encompasses sourcing, ordering, receiving goods and services, and processing vendor invoices through accounts payable. It involves standardizing procurement workflows and automating processes using e-procurement and AP automation software to enhance efficiency. The P2P process may include supply management, vendor selection, requisitioning, purchase orders, receiving, invoice reconciliation, and accounts payable.
A GPO using P2P leverages the collective purchase power of its members to negotiate better prices and terms with suppliers. Here are some key benefits of using a GPO, leveraging the P2P process for purchasing in your casino.
1. Cost savings
One of the most significant advantages of joining a GPO is the potential for substantial cost savings. By pooling resources with other casinos and businesses, a GPO can negotiate lower prices on a wide range of products and services — from food and beverages to C-store items, gaming equipment, and maintenance supplies. Additionally, because they contract directly with suppliers and manufacturers, GPOs can provide direct invoice savings, post-sale rebates, and coverage in chemicals and cleaning services.
2. Access to a wide range of suppliers
GPOs often have established relationships with a diverse array of suppliers, providing members with access to a broader selection of products and services. This can be particularly beneficial for casinos that require specialized items or services that may not be readily available through local vendors. With a GPO, you can tap into a network of trusted suppliers, ensuring quality and reliability in your purchasing decisions.
3. Streamlined purchasing process
Managing procurement can be a time-consuming task, especially in a bustling casino environment. GPOs simplify the purchasing process by providing members with pre-negotiated contracts and agreements. This means your purchasing team can spend less time negotiating and more time focusing on strategic initiatives that enhance the guest experience and improve operational efficiency.
4. Enhanced compliance and risk management
In the casino industry, compliance with regulations and standards is paramount. GPOs often have established protocols and guidelines that help ensure compliance with industry regulations. By utilizing a GPO, your casino can mitigate risks associated with procurement, ensuring that all purchases meet legal and regulatory requirements.
5. Improved quality and service
GPOs typically vet their suppliers thoroughly, ensuring that members receive high-quality products and services. This vetting process can lead to improved service levels, as GPOs often work with suppliers who are committed to meeting the needs of their clients. For casinos, this means better food quality, reliable gaming equipment, and superior customer service — all of which contribute to an enhanced guest experience.
6. Networking opportunities
Joining a GPO also opens the door to networking opportunities with other casino operators and industry professionals. This can lead to valuable partnerships, knowledge sharing, and best practices that can further enhance your casino’s operations. Engaging with peers in the industry can provide insights into emerging trends and innovative solutions that can keep your casino competitive.
“But…”
It’s also important to know what a GPO does not do. There are many objections as to why casinos won’t use these purchasing solutions.
- Fear: Many concerns stem from a lack of understanding or perhaps uneasiness that the purchasing agent, chef, director of F&B, C-store manager, gift shop manager, or gaming equipment purchaser will lose “control” of the end quality of the product.
- Workload: Although the process may change slightly, the workload should actually reduce and allow more time to focus on other areas of the business.
- Hidden costs: Working with a reputable GPO — one that is transparent and upfront about costs and processes — is essential. Choosing a partner committed to your success is key to minimizing costs and maximizing incentives and long-term benefits.
Anthony Nieves of ProcurLOGIC was quoted in Inside Supply Management Magazine in December 2024 regarding their process in working with a property. Paraphrasing his message, he said:
“Embrace the role of a change agent and collaborate with stakeholders, the supplier community, and end users. As you create a vibrant new environment for doing business, you’ll find that open dialogue and teamwork will lead to exciting opportunities and shared success for everyone involved.”
So, by utilizing a Group Purchasing Organization and using a procure-to-pay process for purchasing in your casino, you can yield numerous benefits — from cost savings and access to quality suppliers to streamlined processes and enhanced compliance. As the casino industry continues to evolve, leveraging the collective buying power of a GPO can be a strategic advantage that not only improves your purchasing efficiency but also contributes to the overall success of your casino.
If you have questions about which GPO is right for your casino property or would like an evaluation of your purchasing process, please contact Raving for an audit.
