GPO Strategy 101: A Corporate Guide to Centralized Food and Beverage Procurement

Operating efficiently is critical for any organization. Streamlined operations can reduce costs, improve consistency, and support lasting growth. One of many available strategies to improve efficiency is to use a Group Purchasing Organization, or GPO, to order all of the necessary food and beverage products for your business. 

GPOs have tremendous power for companies of all sizes. They are particularly useful, however, for smaller organizations that struggle to get favorable buying terms on their own. With the strength in numbers that comes from being part of a GPO, many benefits can be enjoyed, including lower prices and access to a wide range of suppliers.  

At InReach, we are proud to offer our Alliance Network to any customer hoping to implement a GPO strategy in their business. Contact us directly to learn more about the exciting possibilities that this network can unlock. 

The Basics of a Group Purchasing Organization

At the core, the purpose of a GPO is to aggregate the buying power of its members. If an individual business alone isn’t able to get much respect from vendors in terms of discounts and product offers, that same business could command far more attention as part of a GPO. 

Vendors are motivated to cooperate with GPOs precisely because of the volume of sales that could run through that organization. If a certain business is only going to order a few units per month, for example, it probably isn’t worth it for a vendor to bother paying any special attention to that customer. Multiply that order by a hundred, or a thousand, and suddenly significant amounts of money are on the line. 

GPOs are about more than cost savings, however. In addition to bringing down per-unit costs when buying as part of a GPO, there are other advantages to leverage here. Access to high-quality suppliers is another piece of the puzzle. Some suppliers only sell to buyers who reach a certain order volume. If you can’t crack that level alone, join a GPO to open up a world of new possibilities. 

You may also be able to improve the consistency of your food and beverage program with the help of a GPO. As a small buyer, you might have access to certain products sometimes, but not always. And, you might experience shipping delays if you aren’t a top priority for the vendor. Ordering as part of a GPO can push you closer to the front of the line and make it easier to stay stocked day after day. 

Why Centralize Food and Beverage Procurement?

GPO food service purchasing can change the way your organization handles this part of daily operations. If you have been feeling bogged down by procurement in this area, or if you are just getting started with food and beverage service and the experience has been a bit of a mess, there is a better way. 

Centralized procurement offers too many benefits to ignore. It starts with avoiding accidental duplication. Purchasing in a corporation can be wasteful if one office doesn’t know what the other is doing. Buying all of your food and beverage products through a single interface with your GPO will eliminate any redundancy. That means even more cost savings beyond the lower prices you are paying for each item. 

Time savings can also be enjoyed through centralization. And, of course, time is money in business, so this can be seen as just another way to improve the bottom line. Putting a single office, or a single person, in charge of purchasing eliminates the need for multiple team members to spend their valuable hours on this task. 

Start with a Needs Assessment

It’s easy to get excited about the possibilities that a GPO will open up for your corporation. Before you run headfirst into this process, however, it’s worth slowing down to assess your current position. Ask and answer these questions to guide your upcoming decisions:

• Who is currently managing food and beverage services at each office location?
• What vendors are being used across our entire food and beverage purchasing program?
• How much is being spent on food and beverage purchases each month?
• What employee complaints are we receiving about the state of the program?

Depending on how fragmented your program is right now, it may take some time and effort to gather the answers to these questions. Once you are done, you’ll have a clear picture of where improvements can be made and how a GPO stands to strengthen this part of your operation. 

Explore the Possibilities

Once you’ve joined a GPO, like the InReach Alliance Network, you’ll be able to explore the many possibilities that are now available to your corporation. What kinds of products can you purchase that used to be out of reach? What do the prices look like on some of the items you’ve been buying for years? It can be an eye-opening experience. 

As you consolidate food and beverage procurement in a single office, make sure to pay attention to any rebate or incentive programs that are offered through vendors in your GPO. You may be able to strategically purchase certain items that will put you over a rewards threshold and allow you to gain further savings. This is something that would have been hard to manage or implement under a less controlled purchasing process, but is easy to leverage in a centralized operation. 

Take Advantage of New Technologies

Simply understanding and monitoring your food and beverage program can be tricky without the right tools in place. You might not have the visibility you need on key metrics to track performance and make the right adjustments. 

An advanced, modern GPO is going to help you in this area, as well. Using metrics to keep track of what’s working and what isn’t will make it easier to adjust your purchasing patterns. Consistently utilizing high-tech tracking, along with tapping into the insights of suppliers within the GPO, will make it possible to fine-tune your program and make it more appealing to employees than ever before. 

Upgraded Food and Beverage Procurement is InReach

It would be short-sighted to think about GPO food and beverage ordering as only a way to save money. That’s part of the picture, but this is not all you’ll gain. By creating an efficient process for ordering GPO food and beverages, you’ll be saving time, reducing waste, and upgrading the whole experience for all involved. The InReach Alliance Network has already achieved these outcomes for many customers, and you can be next. 

Proudly part of Sodexo, InReach offers global reach, customized attention, and a large, growing buying network that keeps food costs low and quality high. Contact us today to learn more.