Industry News

Industry News
How much does your procurement really cost?
May 31, 2016

In today's tough economic climate, resort owners and operators have little choice but to look for additional strategies to cut costs. Strategic Sourcing understands this critical need and has negotiated programs that deliver higher-quality products and services at lower price points. 

While these programs allow for immediate cost savings, they also have been structured to deliver a lower total cost of ownership (TCO) over time, which is an important measure of overall operational success.

Rather than simply taking into account the purchase price of a product or service, TCO calculates the complete cost associated with your purchases—from initial investment to disposal—thus giving you a more realistic view of the cost for a particular product or service.

Inside the selection process

The Strategic Sourcing vendor selection process ensures all associated product and service costs are thoroughly evaluated with TCO in mind. Getting a lower price on a lower quality product won't save you money if it needs to be replaced or repaired often. The rigorous product testing and assessment that’s built into our selection process ensures you have access to the highest quality products at the lowest possible prices.

“The Strategic Sourcing testing process is grueling and extremely thorough,” said Steve Tipton, senior vice president, Innvision Hospitality, Inc. “The end result is contracts that deliver upgraded products at prices typically associated with lower quality options. Strategic Sourcing drives ‘value’ into the

Preserving choice and standards

While leveraging economies of scale to negotiate the most competitive pricing from sole-source suppliers, we also understand the importance of choice. Our “GOOD, BETTER, BEST” initiatives deliver highly leveraged deals, while allowing you to tailor your purchases to meet your specific business needs, property location, market competition and, most importantly, budget.

Selected suppliers are also required to meet minimum quality standards and have hospitality designed testing programs of their own.

“All of our products are tested for durability by an independent lab,” said Judy Dannan, vice president, Corporate Sales at Sobel Westex. “We deliver affordable, well-constructed high-performing products. Costco is not going to take products back if they don’t hold up to repeated washing and wear or provide the level of service a property demands. But as a Strategic Sourcing supplier, we will.”

Smarter sourcing

The bottom line? TCO matters. And the supplier you choose to do business with can greatly impact your ability to achieve a lower TCO and prosper even in the most challenging economic times. Leveraging the industry leading programs negotiated by Strategic Sourcing will help you save money, enhance your guest experience and run a better, more efficient business. It’s that simple.

RCI® Strategic Sourcing provides RCI® affiliated resorts with the opportunity to leverage our combined purchasing power to save on a wide range of everyday purchases of goods and services. You can learn more about the program and access our Online Marketplace  here .