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By: Diane Cudworth A great challenge for project managers in hospitality purchasing is to relay the importance of their role in a successful hotel project – a role that has changed drastically over the years. Formerly, the role of “the buyer” was one of an in-house processor of the information, and timely delivery of the product. Today, as developers and owners are focused on their core competencies, they are outsourcing non-core functions to experts in a particular field. The result is a group of independent hospitality FF&E procurement firms, consisting of hospitality and purchasing professionals with a broad range of expertise, who command an expanded role in the new construction and renovation processes. Expertise of a Purchasing Project Manager Purchasing project managers do more than simply buy what is specified. They are hired to create interior solutions, which includes using our relationships, technical knowledge, and experience to anticipate and resolve potential issues. Professional and experienced purchasing project managers work more effectively and efficiently with architects, interior designers, general contractors, and other professionals involved in the project. Single Resource for Multiple Responsibilities Having fewer firms involved in the overall project is extremely beneficial to a client. Now, more hospitality professionals offer multiple services through strategic alliances and partnerships, such as architecture, interior design, purchasing project management, installation supervision, and project accounting management. Accounting Management More and more, purchasing project managers’ role in cash flow projections and negotiations are a critical element to the client. As the managers go through the bid/quote process and vendor analysis, they can create tremendous savings through the negotiation of vendor payment terms. Accounting management allows the purchasing firm to assist in establishing a separate bank account for the project and issue the checks for client signature. The client no longer needs their staff’s time managing the payment process in such great detail. Delivery Coordination and Installation Supervision Purchasing project managers are generally involved in the last “step” in the project process before the “grand opening” (or re-opening). Supervision of not only the product manufacturing process, but of the delivery and installation coordination is imperative for a successful opening or re-opening of the property. Installation supervision allows purchasing project managers to initiate the contract with the FF&E installer and directly supervise the installation process. Knowing the Client and the Project: Specific Client Needs and Trends Purchasers, and the interior designers with whom they work in tandem, are continually learning about and providing information on current product and design trends. This knowledge varies depending on client desires for aesthetics, product availability, custom capabilities to achieve the desired aesthetics, and the needs for the property’s specific location and market trends. To insure the project’s success, it is critical that the client and the purchasing project manager have a clear understanding of each other’s needs. Purchasers provide expertise in helping define project needs and goals, and offer additional services and ideas, while always considering design aesthetics and communicating with the designer and client when proposing alternatives. Vendor Relations One of the most important elements of a purchasing project manager’s success is their long-term vendor relationships. With so many changes in manufacturing (ownership, mergers, and buyouts), knowing the best, most reliable vendors and maintaining these relationships is a true value provided by purchasing project managers. Because purchasers are the mediators and managers of the process and do not actually produce the products, vendor relationships and communications are extremely critical. Resolving Issues, not Just Communication There is no such thing as a perfect project. However, the last call (preferably NOT e-mail) a client wants is one telling them that their hotel rooms cannot be opened due to a product delay. Purchasing project managers must be able to provide expedient, thoughtful resolutions to problems that may arise, whether it is finding alternate/temporary bedspreads so rooms can be rented, or loaner furniture so a lobby can open. The late opening of a hotel can be financially and perceptively damaging to a client. A successful project is always the goal. “Agent Only”: What the Client and Purchaser Gain Purchasing project managers must look at the process as if it were their own hotel and funds, and find the Agent Only model to bring the best overall results for the client. The client is looking for a purchasing project manager acting in their best interest, not taking kickbacks and rebates, which are sometimes encountered in mark-up or “dealer” models. Acting as Agent Only, the purchasing project manager has a fiduciary responsibility to act in the client’s best interest. As the Agent, the purchaser can also openly discuss with the client the project costs and the payment terms negotiations. In the past, many purchasers operated on a mark-up basis. Now, the Agent structure is either based on a flat fee or a percentage of the established budget, with net costs incurred by the client, eliminating animosity about kickbacks and excessive mark-ups. International Society of Hotel Purchasers Over time there have been many professional groups formed to strengthen and streamline business practices. The International Society of Hotel Purchasers (ISHP) has done just that for the industry. ISHP continues to raise the bar, resulting in higher and more consistent standards; greater expectations from vendors, designers and purchasers; and appropriate product for the industry’s needs. The more that purchasing project managers can educate clients and vendors and demonstrate the benefits of our expertise in the industry, the more clients that will have smoother, more timely hotel renovations and openings!
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Ms. Cudworth has brought many years of experience in project set-up and scheduling, bidding and sourcing, project management, product specification knowledge, computer program skills, client and vendor relations, and team management. Her experience and knowledge are now used in all facets of our company: Design, Purchasing, Accounting, Support, and Sales. Ms. Cudworth will be working with the International Society of Hospitality Purchasers (ISHP) and the Educational Institute of the AH&LA in co-authoring a textbook on hospitality purchasing. She is also working on the ISHP's fabric committee, which will establish the specification standards for all fabric used in the hospitality industry. In addition to involvement in different hotel projects, her present focus with the company is the development and implementation of a new software package, and company-wide training on procedures and technical knowledge.
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