The procurement playbook: 6 areas where you may be leaving money on the table
Are you missing out on hidden savings opportunities?
Today, procurement means more than simply sourcing goods and services.
Hospitality-driven businesses are using procurement to unlock deeper savings, adapt to shifting supply chains and streamline operations — all for the long term.
The secret to maximizing that procurement potential: partnering with the right group purchasing organization, or GPO.
Today’s GPOs use the combined purchasing power of their clients to get better pricing and contracts than any one business could get on its own.
While short-term savings might be the typical entry point, businesses are working closely with their GPO partners to stack up major repeatable wins.
The results are significant — and sometimes, surprising.
When businesses encounter supply chain disruptions, best-in-class GPOs have the relationships with major manufacturers and distributors to source top-quality ingredients at can’t-beat prices. GPOs can also empower multi-unit operators to boost brand consistency across hundreds of locations. Modern GPOs even have culinary experts to help businesses revamp their menus, attracting new customers while maximizing cost savings.
We’ll cover those opportunities and more in this guide. Across six key areas, we’ll examine all the ways a smart procurement strategy can help you pinpoint and maximize savings for your business.
Massive savings opportunities are calling. Let’s dive in.
# 1 Only getting off-invoice savings? You could be saving on so much more.
With the right GPO, off-invoice discounts are just the starting point.
When considering GPO partners, be sure to ask about all the ways they can help you save — like exclusive offers and allowances specific to your business and industry. GPOs’ supplier connections often unlock more substantial, longer-term benefits to strengthen your bottom line.
Those savings start with a GPO’s total purchasing power. By leveraging the combined buying volume of many organizations, a GPO can negotiate better pricing and terms with suppliers on your behalf.
The more purchasing power your GPO partner has, the better pricing you can expect. For example, Entegra is the world’s largest food GPO, with over $42 billion in annual purchasing power. Our size goes a long way in unlocking lower prices, exclusive promotions and preferential contracts with suppliers.
Some GPOs also provide exclusive supplier limited-time offers on specific items. These deals are typically special promotions or monthly savings tied to certain suppliers.
It’s also worth looking into a GPO’s upfront invoice discounts. Unlike off-invoice discounts, they deliver immediate, predictable savings you can plan your yearly budget around.
Entegra uses its $42 billion in global purchasing power to go beyond traditional GPO services. We become our clients’ business performance improvement company. We assist clients in saving money, working smarter and delivering better experiences for the people they serve.
In short, off-invoice discounts are important, but they’re just one piece of the larger puzzle. Make sure to ask your GPO how it uses its purchasing power and relationships to secure both short- and long-term savings for your business. Helping businesses save big: Entegra by the numbers $42 billion
Jeff Porterfield Entegra Vice President, Client Services and Chief Customer Officer
2,500+ suppliers
300,000+ sites
0 membership fees TO JOIN
# 2 Stuck with a small supplier network?
That could cost you during the next supply chain disruption.
The best GPOs do more than just connect you to suppliers. They actively manage relationships, mitigating purchasing risks by helping you navigate the impact of fluctuating prices.
In a time of supply chain disruptions and economic volatility, those connections matter. Thanks to proactive, locked-in pricing, GPOs provide a greater financial cushion to protect businesses from pricing volatility. And with access to a wider supplier network, GPOs can guide clients to suppliers offering comparable products they need at prices that fit their budget.
Consider eggs. If your business relies on a single egg supplier, then a new tariff, labor strike, shortage or even bad weather could disrupt your supply, sending prices soaring overnight. Without options, you’re forced to pay more.
A GPO with longstanding supply chain and manufacturing relationships can provide an extra layer of protection. At Entegra, our industry experts monitor current and future market trends to predict market changes before they happen. That way, you would already have an established contract for eggs, protecting you from rapid changes. And if one supplier were to falter, our experts could connect you to others, ensuring you get the quality you need at the price you want.
Entegra, as a division of Sodexo, has deep expertise in supply chain management and hospitality-driven businesses. We currently operate the most complex, comprehensive, resilient and highest-performing food and beverage supply chain in the world.
That’s why it’s important to ask potential GPO partners about their supplier networks. Entegra offers a variety of options, including the Entegra Local and Direct Savings Program spanning local and specialty foods, services and Direct Store Delivery (DSD). It’s part of a resilient global supply network, strengthened through our position as a Sodexo company.
Coupled with our vetting of supplier compliance and reliability, you can rest easy knowing you’ll always get the products you need, regardless of whatever the market throws your way.
Once
a business decides to become an Entegra client, we really pour all our expertise into helping them as much as they need. Our goal is to help sustain your success.
Chef John Csukor Entegra Vice President of Culinary
Stay protected from product shortages
In this short video, David Kourie — Chief Procurement Officer of Entegra North America — describes how Entegra’s team of 250 supply chain professionals keep businesses ahead of sudden market changes. Watch the video
# 3 If you’re only getting GPO discounts on food and beverages, you’re missing out
Some businesses rely on their GPO partners for food and beverages, then call it a day. The truth is that more robust GPOs offer discounts on a much broader variety of products, goods and services specific to your industry and business, from FF&E (furniture, fixtures and equipment) to MRO (maintenance, repair and operations).
Senior living facilities can save on:
• Infection control apparel
• Bedding
• Floral selections
Golf courses can save on products including:
• Groundskeeping supplies
• Turf equipment
• Golf cart GPS systems
Hotels can save on the following products and more:
• Bed linens
• Concierge stations
• Safes
Entegra also provides products for businesses in the restaurant, leisure, faith-based, education, acute care and camp markets. We take a highly consultative approach, leveraging our experts’ deep industry knowledge to address business-specific pain points.
You can even save on sustainable items like eco-friendly packaging, food waste-tracking solutions and meat alternatives — so you can protect the planet while boosting your bottom line.
It’s not just about products. Modern GPOs connect you to costsavings services too. Entegra’s contracted energy solutions have helped clients save up to 20% per month in energy consumption in their first two months of service.
The bottom line: Before making a niche purchase, big or small, check with your GPO. The savings may surprise you.
CASE STUDY
Success in senior living: “Entegra points me in the right direction”
When Kendal, a not-for-profit serving older adults, began searching for options to curb their procurement spend, they were impressed by Entegra’s “enormous savings.”
“I could reach out to [my rep] and say, ‘I need this kind of product; I need this kind of service,’ and he’d point me in the right direction,” says Dan Rock, Kendal’s procurement director.
“[Entegra] set us up for success in a lot of ways… It showed our nine communities: Look what Entegra is willing to do for us.”
