The case for procurement
Procuring your way to better FF&E and OS&E
By Geoff van Wijk
One of the many decisions facing hotel owners and developers is how to get hotel furniture and operating equipment (FF&E and OS&E) ordered and delivered. What comes next is often a realisation of the true scope of that endeavour, and more questions: How? What? Who? Turnkey or procure?
In the interests of better quality, I want to make the case for hospitality procurement, and the special role it plays for hotel owners, designers and operators – good procurement companies act in the interests of all three parties in equal measure. It is a precarious balancing act, but when done well will result in durable, quality products.
So what are some of the benefits of hospitality FF&E and OS&E procurement?
Early involvement = time & cost savings
The earlier a procurement agent is involved, the more money they will save you. Our company, FURNISH, advocates the use of our advisory services at the early design stage, to review product specifications with the designers and assist in product sourcing.
Establishing early relations and procedures with the project team, reviewing operator requirements and establishing the scope of FF&E and OS&E avoids expensive oversights later in the project. Early dialogue between designers and procurement agents translates directly into time and cost savings, and sets the tone for pragmatic buying practices.
By carefully reviewing design specifications, layouts, global sourcing, budget management and project scheduling, we protect the interests of the project paymaster, as well as operator and designer. The objective of a good procurement agent must be to honour the design integrity of the hotel, source contract-quality goods, honour proprietary products and manage the owner’s budget.
Well-managed procedures allow us to spend more time knowing our vendors, sourcing suitable suppliers and negotiating with specified vendors, whilst upholding the brand standards of the hotel. Durable, high-quality FF&E and OS&E results in happy operators and increased productivity. Nowhere does the adage ‘penny-wise, pound-foolish’ ring truer than in the process of furnishing and equipping a hotel.
For owners looking for the most transparent process in which to acquire FF&E and OS&E, the only option is an independent procurement agent working on a service fee. The transparency of the process, when managed up until the handover of a comprehensive asset register, promotes honest buying practices.
Cheaper than turnkey
Actually, there is no contest here. Contrary to popular belief, procurement is not more expensive than the turnkey approach but is in fact as expensive or inexpensive as you want it to be (within reason). Together with the employer, suitable budgets for FF&E and OS&E are set and the procurement agent will purchase accordingly. The difference is in the cost of the service: procurement service fees are substantially lower than turnkey margins, where proprietary goods are often reproduced in order to extend those margins. With procurement you’re getting better value for money whilst honouring the design process to the best of the budget’s abilities.
What about the OS&E?
Operating supplies and equipment for a five-star resort hotel can exceed 7,000 unique line items and cannot be bought turnkey. There is no standard product list or non-variation bill of quantity for OS&E.
The sheer quantity of OS&E and the nature of the items dictate a need for flexibility and choice. Each project has unique features, a new pre-opening team, various F&B outlets, and a list of preferred equipment.
To uphold the brand standards of a property, the process of purchasing OS&E is crucial to operational success.
More than just furniture and equipment
Experienced procurement agents will get the best out of your budget, from global sources of specified and contract-quality hospitality suppliers.
A hotel without FF&E and OS&E is just an empty building. FF&E and OS&E are the soul and character of a property. It’s the heavenly bed, the sumptuous chandeliers, the exquisite fabrics and the finest furniture.
It’s the fine crystal, the silver candelabras and the softest linen.
It’s the best night’s sleep, the perfect cocktail and that unforgettable meal. Ultimately, it’s the guests’ very first impression and most indelible memory. Don’t leave it to chance!
Geoff van Wijk (email@example.com) is a partner at FURNISH.