Operating Supplies & Equipment (OS&E) refers to the day-to-day products that both staff and hotel guests use. It represents a large range of items that hotels require to operate, much of which is consumable, and therefore requires monthly or bimonthly reordering.
Products that Fall Into the OS&E Category
All hotels require the following OS&E:
- Disposables: gloves, trash liners, tissue, and toilet paper.
- Cleaning Supplies: brooms, mops, dustpans, wiping cloths, dusters, and chemicals.
- Maintenance & Repair Operations: light bulbs, batteries, paint, and equipment repair parts.
- Guestroom Amenities: soaps, shampoos, sheets, towels, hairdryers, irons, and hangers.
- Staff Supplies: Uniforms.
Full-Service Hotels—those with restaurants and bars—require additional OS&E such as pots, pans, spatulas, squeeze bottles, food containers, cutting boards, dinnerware, flatware, glassware, and shakers.
Needless to say, the extensive amount of various operating supplies and equipment required for the many different departments in a hotel can, if not controlled, play havoc with one’s budget.
The first step in OS&E procurement entails an assessment and selection of products as well as their specifications and suggested par levels. Once established, pricing and delivery are considered, and a controlled budget is created.
Cost Control for OS&E
Hotels often purchase these items through a distributor or directly from the vendor. Vendors of OS&E are competing with an ever-increasing number of suppliers, making the field extremely competitive. The fine line is finding reduced pricing that also aligns with timely delivery and products that meet your specifications. Freight and shipping also need to be considered when conducting price comparisons.
Although startups may offer reduced pricing in an attempt to get your business, stability plays a key role in a secure supply chain. Established suppliers have a long-term track record and have survived past economic downturns. It’s important to remember that inventory shortages, in any number of departments, can significantly affect and have an impact on the quality of customer care.
In our current environment, with COVID-19 still creating supply chain issues, it’s best to have two weeks’ worth of operational supplies and equipment on-hand. Of course, this leads us to yet another almost universal inventory and supply issue—the space to house the OS&E and the ability to organize it in such a way that makes it easily accessible for both restocking and inventory analysis.
Most large chains have whole procurement teams and order OS&E in amounts that allow for consistent savings and supplies. These teams vet and work with dozens of suppliers, taking advantage of both contracts and rebates. Unfortunately, smaller companies do not always have the resources to create this type of in-depth procurement system.
How can small and mid-sized hotel brands compete with the larger brands? The answer to that question lies in the ability to find the vendors that offer the best service and product at the lowest price. Enter the world of GPOs.
Group Purchasing Organizations (GPOs)
Consider the power of one to the power of hundreds, if not thousands. In a GPO, the power lies in the number of hotels and restaurants that have joined the organization. By making high-volume purchases, GPOs are able to obtain pricing similar to large corporations.
The trick is finding the right GPO, the one that works with the suppliers that carry the products you need. If you choose well, the task of procurement will be reduced from sourcing dozens of suppliers to just one. In much the same way you conduct your search for the appropriate suppliers, consider the same important elements when choosing a GPO. What is their track record? Are they reliable? What can they offer in terms of pricing and delivery?
Source1 Purchasing offers a “one-stop shop” experience so that you can access suppliers and get you better pricing on supplies you already purchase for your operation. What began with a promise of substantial cost savings from our buying group model has evolved into a solid bond of trust with our network of suppliers such as: HD Supply, Georgia Pacific, Ed Don, Home Depot, Batteries Plus Bulbs, A1 Textiles, Welspun, World Amenities, Cintas, Aramark and Chef Works.
Source1 Purchasing was established in 1997. In 2018, they joined forces with other Group Purchasing Organizations to form the Buyers Edge Platform, raising their purchasing power to $12 billion and becoming the leading GPO in hospitality. They have contractual relationships with more than 165,000 rebated line items and over 1,000 suppliers. Source1 Purchasing partners with some of the most recognizable and established suppliers and distributors including American Hotel Register Company, Granger, WA World Amenities, Office Depot, and Sherwin-Williams, to name just a few.
And just as important as the cost and time savings, is the partnership that develops. Source1 Purchasing offers you direct access to account and procurement managers that are dedicated to increasing your profitability as well as purchasing analytics that result in real-time, data-driven business decisions leading to measurable results.
A good GPO becomes a partner in your business and is dedicated to decreasing your costs while increasing your value. Contact us today to learn more about our services.