Contracted Supplier Programs

The heart of the Seva Procurement solution is the portfolio of supplier programs that lower the total cost of goods and services by as much as 20% for our members, while respecting the diversity of product needs among our properties.  Seva understands that products and suppliers right for one property may be wrong for another and unlike a group purchasing organization (GPO) that services customers from all business segments–both hospitality and non-hospitality, the Seva solution is designed specifically for the elite hospitality operator.  After all, it is very unlikely that a GPO that accepts fast food restaurants, hospitals, prisons and schools as customers will have the underlying purchasing solutions and supplier programs that consistently and comprehensively meet the unique needs and high standards of the elite hospitality operator–different businesses require different solutions.   Because the independent, luxury, boutique and resort hospitality segment represents Seva’s primary membership base, the underlying managed product mix and aggregate volume used by our contracting teams when negotiating contracts results in supplier programs designed specifically for this segment, with most new members discovering that our solutions meet or exceed standards on the majority of their purchasing needs right out of the gate.  Specifically, we find that 65-75% of new member property spend fits easily into our existing programs, either because a member’s current suppliers are contracted by Seva or because the comparable Seva supplier is considered an acceptable alternative by the new member and their departmental personnel.  While this 65-75% of spend provides significant savings, with minimal change or resource investment, Seva is not satisfied until at least 90% of spend is brought under supplier contracts, in keeping with best practices for procurement and supply chain management.  To bridge this gap Seva will begin attacking the remaining 15-25% of spend in one of two ways:

  1. Working with property personnel to identify whether there are any existing
  2. Seva programs that will address the remaining non-contracted spend.  This process typically involves supplier meetings with property personnel, as well as product samples or cuttings.

For the remaining spend that is not addressed by existing Seva programs, our contracting team will engage property personnel and suitable suppliers to develop custom contracts to the exact requirements and specifications of the member.

All of this means that by the end of the first year of membership, a typical member finds that 90% of managed category spend is flowing through contracts that have been negotiated following supply chain best practices and that is subject to routine price and contract audits, quality assurance and indemnification clauses.  In short, this means a reduction in costs of up to 20% on about 90% of your managed category spend!

 

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