Smarter procurement in uncertain times: Growth levers for long-term success
Solutions for today. Strategies for what’s next.
Strategic procurement is the key to greater stability and long-term growth.
With rising prices, strained supply chains and a limited labor market, it’s no surprise that businesses are on the defensive. Economic uncertainty has hospitality-driven industries scrambling to protect their margins wherever they can.
But simply reacting isn’t enough. Operators need to take a proactive approach by looking at the bigger picture.
Today’s businesses are leveraging procurement not only to maintain stability, but to proactively lay the groundwork for future growth.
While procurement has previously been viewed as a behind-the-scenes exercise, in today’s volatile market, it’s evolved into a series of strategic levers that can be adjusted to benefit entire operations’ ongoing success. External spend can account for 80% of businesses’ cost bases, yet addressing that spend is often overlooked for other business priorities.1 The fact is, many operators miss the many opportunities smarter procurement unlocks.
This piece explores those possibilities, explaining how procurement can be used as a stabilizing force and strategic growth engine. First, we’ll look at the immediate factors squeezing hospitality-driven operations. Then, we’ll outline specific ways procurement can improve margins, boost business performance and set the stage for long-term growth.
The result will be a big-picture view of how the right procurement partner can help you overcome today’s economic uncertainties — and fuel tomorrow’s success.
PRIMARY PRESSURES
• Rising prices
• Supply chain disruptions
• Labor shortages
Let’s get started.
PROCUREMENT-DRIVEN
• Corporate strategy
• Operational efficiency
• Tech-driven insights
How procurement becomes a growth engine
With the right Group Purchasing Organization, or GPO, a strong procurement strategy opens three channels for unlocking business opportunities.
1 Corporate strategy: Driving long-term value
Today’s GPOs deliver more than cost-saving contracts for goods and services. Taking a more personalized, high-touch approach, they provide advisory services and strategic procurement from industry experts actively invested in their clients’ ongoing success.
This trend reflects GPOs’ larger shift away from transactional agreements to true partnerships, where they work alongside clients to unlock long-term value. In fact, today’s business leaders are turning to procurement experts to help shape corporate strategy, positioning their operations for growth from the top down.5
GPOs like Entegra, for instance, provide detailed analyses of businesses’ procurement programs, plus easy access to suppliers and relevant markets. Along with identifying overlooked spend areas, procurement experts provide tailored recommendations to help clients redirect their funds and achieve their goals.
5. https://www.mckinsey.com/capabilities/operations/our-insights/a-new-era-for-procurement-value-creationacross-the-supply-chain
Corporate strategy: Driving long-term value, continued
Recommendations can span everything from individual products to smarter supply management — including strategic sourcing, multiyear planning and supplier alignment — delivering longer-term margin control and value.
This robust level of support is almost mandatory in times of economic uncertainty. The right GPO can act as a business’s extended procurement team, interpreting policy changes, anticipating issues and creating contingency plans, all while explaining options and guiding smooth transitions along the way.
For example, Entegra’s team includes over 250 supply chain professionals, including 50 non-food specialists acrossNorthAmerica. By leveraging their deep commodity knowledge and supplier/ manufacturer relationships, these experts actively protect their clients, empowering businesses to pivot and plan ahead.
Easing concerns. Identifying new opportunities. Facilitating supplier collaborations. GPO-led procurement is increasingly becoming a core tactic for businesses to establish durable, scalable operations.
2 Operational efficiency: Reducing the unknowns
GPOs’ close relationships with suppliers and manufacturers provide unique perspectives on ways businesses can streamline their operations — and stay focused on higher priorities.
For instance, the right procurement partner can help simplify product and service management. Fragmented, transactional supplier arrangements may have been the norm before — but today, they create unnecessary friction.
By working with a GPO to consolidate suppliers, businesses can reduce their total number of contracts, reducing procurement costs and administrative burdens. Over time, the value of that single network of suppliers accumulates, resulting in better service consistency, more predictable pricing and stronger supplier relationships.
Today’s GPO provides strategic assistance with food costs and menu pricing. At the Entegra Performance Kitchen, operators can learn how to cut costs by adjusting portion sizes and incorporating lower-priced seasonal ingredients. Culinary experts can explain how to design costsaving menus, implementing tiered pricing that adapts to ingredient costs, customer demand and the market shifts of today and tomorrow.
Operational efficiency: Reducing the unknowns, continued
Procurement partners like Entegra also empower smarter spending by uncovering hidden costs and freeing budgets for growth. This stretches beyond savings on food and beverages: Tactical upgrades like energyefficient appliances and optimized staff scheduling often lead to surprising savings, which can be reinvested in the business.
Given the current economic climate, the key is for businesses to find a procurement partner that relieves the day-to-day operational pressures. What begins as a solution for today’s immediate pressures opens the door for client advocacy, fuller transparency and long-term margin protection.
As a result, operators win back the time to focus on core business decisions. Supplier relationships transform into long-term partnerships, reducing operational friction. And that improved efficiency creates a longer runway of time and capital, allowing businesses to grow.
3 Tech-driven insights: Guiding smarter decision-making
Operators can’t manage what they can’t see. In uncertain times, getting data visibility is the first step toward gaining control.
That’s why many businesses are seeking faster, more informed data analysis. Fortunately, the modern GPO delivers resources for market insights, leveraging data from both within the business and from the larger supply chain.
The latest digital tools extract insights from existing purchasing data, in addition to streamlining procurement processes so staff can order supplies more efficiently.
For instance, locked order guides make it easy to ensure brand consistency across locations. By limiting purchases to a defined selection of items, businesses can maximize their savings — setting the stage for consistent, scalable service delivery, ensuring satisfied customers.
Tech-driven insights: Guiding smarter decision-making, continued
Additionally, Entegra Shopping Assistant helps businesses find the best alternative products and prices while shopping distributors’ e-stores. The AI-powered browser extension shows savings opportunities in real time, regardless of whether the product is Entegra-contracted or not.
Ultimately, that data visibility equips businesses to navigate today’s volatility with clarity — and plan ahead confidently.
Paul McArdle CEO of Entegra North America
“In today’s hospitality industry, where supply chain integrity is everything, having dedicated experts working for you is a major advantage.
Entegra saves businesses time and lets them focus on their core operations, providing complete transparency, access to best-in-class pricing and critical traceability.
And when supply chain issues strike, we can anticipate challenges and navigate them on behalf of our clients. Our deep supplier relationships ensure we’re at the front of the line, even when disruptions hit.”
Our strategic advisors are standing by to help you overcome today’s obstacles — and embrace tomorrow’s opportunities.
From improving margins to scaling operations and beyond, we provide the expertise, supplier connections and actionable insights to help you grow with confidence.
Let’s talk about what that looks like for your business. Contact our team today.