Procurement Best Practices for Multi-family Properties and Facilities
February 25, 2021 - 6 MIN. READ
For most property managers and building owners, the bottom line matters. The financial performance of your portfolio is a driving indicator of the overall health of your assets.
We all want to maximize cash flow and profit and are constantly tasked to do what is necessary to increase revenue and NOI. Typically, creating new streams of income and growing current revenue sources are the main focuses, but there is an excellent opportunity to save costs by optimizing routine MRO supply purchases for your company.
MRO supply procurement
Maintenance repair and operations (MRO) purchases are routine necessities for multi-family properties and facilities. From tools to PPE, from equipment to general office supplies, these are the items that keep the business moving. Delaying or neglecting problems will lead to more issues down the road, so prudent property managers understand that addressing items upfront and being proactive is always the best approach.
Avoiding purchasing problems can also lead to excess MRO spending and inefficient sourcing of products. When your team knows that they have a green light to order supplies or tools for a project, they typically do not think about the cost. They just want to get the job done as quickly as possible.
This is when you can find yourself over budget and hurting your bottom line because many deals or savings are missed by not optimizing your procurement program.
But by optimizing them, you will gain a competitive advantage in your industry and help lift up your struggling facilities that need to increase NOI. By getting a handle on the procurement of MRO supply, cost savings and operating efficiency will be evident in the short- and long-term.
Best practices for optimizing your purchases
Designate a centralized internal buyer
By selecting one or two individuals to be in charge of all purchasing for your company, you will streamline the process and have more visibility into purchasing practices and methods.
With a centralized MRO supply procurement process, you can expect a few benefits:
Less rogue spending - Random team members will not order supplies from unauthorized sources.
Bulk discounts from preferred suppliers - By negotiating with a select supplier base, you will save money.
Improved efficiencies - Using Raiven's online platform will save time and ensure the best pricing.
Easier management of suppliers and vendors - Fewer suppliers means less time and hassle for your team to manage them.
Recruit and train team members to optimize your MRO supply procurement practices to ensure compliance. This will enable transparency, efficiency and cost savings. Only allow vetted and approved suppliers and vendors to be in your group and negotiate the best deals available.
Reduce buying friction with technology
The power of technology and the internet have revolutionized the procurement sector. Raiven has embraced technology and created smooth and efficient platforms designed for the busy property manager.
Historically, MRO supply procurement has been clunky - remember sifting through catalogs or dealing with pushy salespeople showing up to take inventory and submit orders on your behalf? Things are different now.
From anywhere with internet access, your designated buyer(s) can log on and make routine orders with ease through Raiven's Best Value Finder App. Buyers can order in minutes from multiple vendors with the guaranteed best pricing.
Your designated buyers will appreciate the ease and simplicity of purchasing MRO supplies, and it will not become a daunting or tedious task. Having a select group of the top national brands in your bullpen instills confidence and ensures that your company is getting the best product at the best price - on a smooth, digital platform.
Leveraging analytics to optimize purchases
Data is gold for businesses. It allows you to make educated decisions based on thorough analysis and empirical evidence.
It also improves operating results and ultimately creates a better experience for your team and customers. Ignoring data and analytics will cost you more money, waste your time, and frustrate you and your employees.
Analytics is the answer. Property and maintenance managers always look to identify trends before they happen. If you can anticipate needs and costs proactively, you can then use this data to make better purchasing choices.
For example, are you noticing that your HVAC filters are not lasting as long as usual? Is there a reduction in efficiency from these air moving units? Use this information to your benefit.
Can you find a better, cheaper filter that will last longer? If so, this improves the efficiency and life expectancy of your HVAC units, which will save you time and money.
Analytics also creates a more transparent and efficient supply chain. When you digitize and optimize MRO supply purchases, it is easier to spot areas for improvement and efficiency. Thus, it enables decisions to be made faster and with greater accuracy and results.
MRO supply procurement may not be pretty, but it is an opportunity that is often overlooked when building managers try to cut costs and save money. Fortunately, there are several methods that can achieve cost savings that will have a direct impact on your bottom line.
Negotiate better contracts - This is key for property and procurement managers to understand. Use strategic sourcing to help bolster your purchasing power and analyze the spending within your business.
Reduce the number of suppliers - Make sure your selected vendors and suppliers perform for you; if they do not, replace them. There is no need to have hundreds of suppliers to manage, so filter them so only the best are in your program. Fewer suppliers means easier management and fewer headaches.
Eliminate rogue spending - Rogue or maverick spending can add up to hurt your NOI. Empower your employees to use Raiven's system so they are abiding by company policy and getting the best available pricing.
When you can find hidden opportunities to cut expenses and improve the financial health of your facilities, it is a boon for your organization and will please your stakeholders. Analyzing spend and using technology to assist in decision-making will inevitably increase productivity, operating performance and NOI.
Implement changes today
As a property manager, you need to evolve with the times and embrace technologies that can elevate your NOI, reduce your costs and improve efficiencies. Raiven's innovative technologies make it easy to optimize MRO supply purchases to help cut expenses.
Gain a competitive edge, take the stress and hassle out of the procurement process, and let Raiven's systems assist you seamlessly in the background as your team makes their routine purchases. The cost savings on purchases will be apparent in real time, and you will spend less time dealing with and managing suppliers and vendors. As a result, it will free up your valuable time to focus on other areas of your business that are in need of optimization.
Property and facilities managers cannot overlook areas in their business that are in need of reform. Fortunately, implementing Raiven's solution is simple. Dig into your procurement program process, analyze the data, encourage cross-departmental communication and implement Raiven's software.
If you want to receive immediate savings quickly, reach out to Raiven today for a consultation and demo. We will be pleased to answer any questions and show you how our solutions can help you improve your net operating income fast.