Most of us have experienced that heart-sinking feeling when you hear your car’s death rattle. Why? Aside from the obvious hassle of being without a car, you’ll need to buy another one—and there are few things people dread more than the car-buying process.
In most multifamily and commercial properties, procurement spend is thought of as a necessary evil—and then often not thought about much at all. After all, most of the legacy systems in place are quite effective when looking at the “big costs.” But since maintenance, repair, and operation (MRO) parts and materials are usually not a large portion of the overall budget, the smaller costs are often overlooked. While building owners would love to reduce that spending as well, their procurement departments are usually already stretched to the limit.
What do the healthcare and the multifamily housing industries have in common? While this might sound like the beginning of a not-so-hilarious riddle, it’s a serious question that could result in significant savings for building owners.
While the US currently has a booming economy and the unfortunate memories of the 2008 recession are in the rearview mirror, there’s been a lot of debate about whether we’re in a late cycle (aka pre-recession) economy.
Guest blog by: Scott Hollis, former Sr Vice President for Strategic Contracting, Marriott
If you’ve shopped for groceries at big warehouse stores, like Sam’s Club or Costco, you have witnessed firsthand the power of collective purchasing and volume discounts.
Many building owners believe the value of an optimized procurement program is reducing costs—and while that’s very true, it’s only part of a bigger picture. Realized savings on every purchase can actually help you increase the value of your property.
That’s why we wanted to share five ways that you can maximize your cost savings and your property value:
Business owners often have to walk a tightrope. On the one hand, they need to constantly try and find ways to cut back on spending to achieve their organization's profitable goals, but they also have to do it in a way that doesn’t affect services levels and performance. While quite a few methods of cost-cutting are available, procurement savings are one of the easiest ways to slash operating costs. A well-thought-out procurement plan can save hundreds of thousands of dollars annually for a mid-sized organization, improve supplier terms, and bring long-term cost stability.
How can your business reduce costs associated with building maintenance?
One of the most important factors in skillful contract negotiation is obtaining the biggest discounts possible. If you’re a building owner, this not only reduces your expenses, it also increases your building’s market value. If you’re a property manager, these savings will not only make the building owner happy but some of these cost savings might be passed along to tenants or residents.
You may have heard about the new increased trade tariffs being imposed on Chinese goods, but if you’re like most people, you’ve been waiting to see what materializes before paying attention to all the details.
While things are still in flux, this week will be pivotal in determining whether the current 10% tariff on Chinese goods, which took effect in September 2018, will be raised to 25%. Regardless, we’re already starting to see the effects of the earlier tariffs, which have been placed on billions of dollars worth of imports. So, what does that mean for American business owners and, particularly, for supply chain and procurement execs maintaining their building portfolios? More than you’d think.
Do you want to realize a 10-25% savings on your building maintenance spend?
No problem—you just need to verify your employees or service providers performing your MRO (maintenance, repair, and operations) are in compliance with your procurement goals and objectives.