The COVID-19 pandemic impacted nearly every aspect of our lives over the past year and a half, including the U.S. economy and supply chain. Over the past 16 months, supply chain issues have directly affected consumers everywhere and dominated the headlines. From household goods such as hand sanitizer, face masks and toilet paper to flour, yeast and ketchup in the grocery aisle, shortages and delivery delays have been a direct result of disruptions in the supply chain caused by the global pandemic.
A perfect storm has been brewing since the first lockdowns began last year. As the Wall Street Journal reported, “Suppliers and logistics providers say distributors are facing shortages of everyday products compounded by labor shortages, supply constraints and high freight costs.” From securing deliveries from distributors to manufacturers procuring raw materials for production, every link in the supply chain is at risk of breaking during times of crisis.
With no foreseeable quick fix for the many supply chain obstacles, it is imperative that companies have a partner who can help them navigate these uncertain times.
Working with a hospitality vendor with a sophisticated procurement services infrastructure or group purchasing organization (GPO) affiliation can help you identify risks ahead of time and keep your supply chain stable.
Here’s how:
Scope of supplier relationships
Companies with a robust procurement services group or GPO have category managers constantly working to get products you need to run your business, plan and anticipate challenges. By building long-term relationships with manufacturer and distributor partners, they also work hard to mitigate pricing fluctuations that result from crises. Because of the scale a procurement organization offers, they can work strategically with suppliers to improve the continuity of the supply chain.
Breadth of portfolio
When supply chains break down, there is an increased likelihood that the products you normally purchase will not be available. Distributors will work to get you to substitute items, but these substitutes may not be contracted and will carry a higher net price. By aggregating buying power from many businesses, GPOs have purchasing programs with a wide range of manufacturers, making it more likely that a contracted substitute is available. This will limit an unexpected financial hit from product substitution during upheavals in the process.
Sourcing new products
Dire global situations like 2020’s pandemic brought the need for operators and facility managers to purchase new products; face masks, disposable gloves and plastic partitions were suddenly needed across many industries due to COVID-19, creating high demand. A procurement services company will have the purchasing scale and partnerships to secure these new products in a competitive marketplace.
Compass Group, through Foodbuy, our GPO, helps our clients traverse supply chain issues and adjust as needed to ensure that we are able to deliver in both food and facility services solutions.
Foodbuy is the largest foodservice procurement organization in North America with 600-plus supply chain professionals dedicated to delivering pricing efficiencies and economies of scale that are simply unmatched. Leveraging the sheer size of the world’s largest foodservice and hospitality provider along with a GPO customer base of over 80,000 clients, Foodbuy processes more than 35 million transactions per month.
Disruptions are inevitable as our world continues to recover, but with solid supplier relationships, an expanded portfolio of suppliers and flexibility in purchasing options, business continuity is possible. Let us show you how we can create a more sustainable program for your dining and facility services.
Interested? Let’s talk about it.
Compass Notes 