Hospitality Design - November 2011 - 72

perspectives

trends: purchasing

the cost of yarn, buying what he needed for the entire renovation now, even though it will be spread over 14 months. “You have to look at things differently,” he says. “We are not just buying and bidding—a lot more thought goes into it and you need to squeeze every penny out of the dollar.”

Back in the USA
“The biggest momentum shift is the amount of clients asking for everything manufactured in the U.S.,” says Bill Langmade, president of Dallas-based Purchasing Management International. “They are willing to pay a premium to not buy from Asia or Europe in order to buy from North America and get it faster.” Agrees Locke: “As the delta between North American and Asian production decreases, some clients are making the decision to purchase North American at a premium, because that premium has become less.” The good news is that more and more companies are bringing their manufacturing back to the U.S., while keeping a plant in China or elsewhere overseas for international projects. One negative, however, is that buying American coupled with tighter schedules have lowered the vendor pool. “Renovations always wait to the last minute, and that limits your options,” says Larry Carver, president of Atlanta-based Carver & Associates. “If we only have four months, we can only go to this guy or that guy, we can’t go overseas and we can’t take the time to bid this out.” The longest lead-time culprits: fabrics and lighting. “Fabrics are our biggest bottleneck,” says Carver. Adds Carroll: “Projects used to be determined by casegoods, now they are determined by the long lead time of fabrics.” If Carroll had a soapbox it would be for quality U.S.-made lighting. “There’s nothing made in the U.S. any more; it may be assembled here, but not made here. China knows how to make casegoods, but lighting has huge issues with quality—is it UL listed, has it been tested, and 16-week lead times turn out to be 24-week lead times. We have been looking at new manufacturers, some that are very good, but they are so busy that their lead times are even more drawn out.”

Above: The lobby of the Sheraton Bangalore, with purchasing by Purchasing Management International and design by DiLeonardo.

Easy Being Green?
The question remains, where does sustainability ﬁt into this new normal equation? “It’s now just the price of entry,” says Langmade. “Everyone is doing it.” Of course, the projects aiming for LEED certiﬁcation are the most interested in sustainable products, but Langmade says that vendors are trying to make the most eco-friendly offerings they can. And that doesn’t necessarily mean higher pricing. “Eventually sustainability will have a real impact in hospitality as the costs for sustainable products continue to become more competitive,” says Parker. Yet in the era of renovations, instead of just specing these products, many purchasers are also going above and beyond, concerning themselves with the plight of the used products—for example, assisting the owners, contractors, and installation companies in recycling, especially carpets and wallcoverings, by introducing them to companies that pick up their goods at the end of their lifecycle. “What starts out as being altruistic is now an economical thing as [manufacturers] are getting raw materials at a lower cost, and you are being sustainable at the same time,” Langmade says. Plus, he says, it saves the property and contractor money in disposal and landﬁll costs. But not all products have such established recycling systems, or are as easy to dispose of. Mattresses and TVs pose different problems, for instance, and each state has its own regulations. “What happens to the old is a major path of concern,” says Benjamin, saying that he and other purchasers are working with the likes of Mind Click and Good360, formerly Gifts in Kind, to ﬁnd solutions. “In some states, a bed that’s in the Ritz-Carlton on a Tuesday can’t be donated to a homeless shelter on Wednesday, as it is literally against the law. Also, there are various federal, state, and local laws regarding disposing of TVs and light bulbs, among other items.” Another cost saver: buying close to home not only lowers a product’s carbon footprint, but it also limits warehousing and handling costs. “Buying from China means full containers to maximize efﬁciency,” points out Shulman, “but since not all of it is ready to install at the same time, now you have to warehouse this stuff, which drives the costs up. [For local products], we can bring in two truckloads as opposed to two containers.” But unfortunately, many still say that unless the owner is requesting green products, those that still cost a bit more may become a line item that is cut. As Carver says, “The almighty dollar still has a loud voice.”

Background Check
Many purchasers stress that vendor due diligence is even more important today, for multiple reasons. Firstly, not all companies are out of the red. “Some vendors are ﬁnancially on the edge; some will make it and some will not,” Benjamin says. At the same time, purchasers are asking manufacturers for so much, they need to make sure they can deliver what they promise. “Vendors are under ridiculous timeframes, so we really need to ﬁnd those that can meet the dates and the needs,” says Ann Chipouras, president of Purchasing Dimensions in Somers, Connecticut. And the increasingly global nature of the economy has created new concerns. “Manufacturing is not only in China—it’s in Vietnam, Malaysia, India, and Turkey. Finding out whether the seller that we buy from actually owns the company, or if they have a daily presence in the factory, is important to determine,” adds Jennifer Ramsey, founder of San Francisco-based Ramsey Purchasing.

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