Group purchasing: reduce your operating costs.The rising cost of operating a camp has forced directors and owners to look for more money-saving programs. As you prepare your annual operating budget Noun 1. operating budget - a budget for current expenses as distinct from financial transactions or permanent improvements budget items, operating cost, operating expense, overhead - the expense of maintaining property (e.g. , review variable cost centers such as food, office supplies Office supplies is the generic term that refers to all supplies regularly used in offices by businesses and other organizations, from private citizens to governments, who works with the collection, refinement, and output of information (colloquially referred to as "paper work"). , insurance, maintenance materials, and supplies. If your balance sheet indicates a deficit, you might consider these options: * adjust counselor to camper ratios * increase fee structure * delay capital improvements * reduce employee benefits * increase contract services * investigate energy-saving programs * reduce waste in food service and related departments * freeze salaries * reduce staff You might also want to consider group purchasing, a cost-saving program used by manufacturers and service industry companies for years. These companies pool their purchasing needs at the local, state, regional, or national level. Annually they issue Requests for Proposals (RFPs), establishing product specifications (volume, quality, delivery), and negotiate with major vendors to obtain lower prices. RFPs can be issued for food, cleaning supplies, paper goods, office equipment and supplies, athletic and sporting goods Noun 1. sporting goods - sports equipment sold as a commodity commodity, trade good, good - articles of commerce sports equipment - equipment needed to participate in a particular sport , medical/surgical supplies, audio-visual equipment and supplies, maintenance tools, equipment, and materials. In addition, some group purchasing programs have been able to negotiate substantial price reductions for vehicle fuel, long distance telephone services, and health, life, and dental insurance Dental insurance is insurance designed to pay the costs associated with dental care. Dental insurance pays a portion of the bills from dentists, hospitals, and other providers of dental services. . Camps save money Anthony Lockhart, a former Minnesota YMCA YMCA in full Young Men's Christian Association Nonsectarian, nonpolitical Christian lay movement that aims to develop high standards of Christian character among its members. camp director, and seven other regional "Y" camp directors established a program nearly three years ago with a food purchasing emphasis. Lockhart said that after vendor negotiations the group immediately experienced a 10 percent savings. He said the major barrier the group faced was vendor loyalty, which was driven by long-term relationships and geographic location to the camps. Figure 1 Group Purchasing Contracts
Pricing Are costs locked in for a specific period of
time?
Entry Fee Is this fee reasonable to meet your budgetary
needs? A general rule: you should recoup your
fee through cost savings within 45 to 60 days.
Minimum Order Do vendors require a dollar minimum order that
meets your needs? In addition, are there any
hidden delivery or handling charges?
Product Quality Are the vendor products comparable to your
current and projected needs? For example, is
meat of a similar, lower, or higher grade?
Payment Cycles Are the vendor payment cycles workable for you?
You may be going from a 20-day to a 15-day
cycle. Also, be aware that you may be able to
obtain additional discounts (normally 2 percent
to 5 percent) for early payment.
Rebates Some vendors offer rebates for volume purchases
or certain achieved dollar amounts. Rebates may
be given in credit, dollars, or merchandise. In
addition, rebates may go directly to the
purchaser or, in some instances, through the
group purchasing association.
The Master Source Corporation, based in Fond du Lac, Wisconsin Fond du Lac is a city in Fond du Lac County, Wisconsin, United States. The name is French for Bottom of the Lake (other translations have included Foot of the Lake [1] or Farthest End of the Lake [2] , established their group purchasing program in 1976, and now has a million dollar plus program designed for nonprofit organizations Nonprofit Organization An association that is given tax-free status. Donations to a non-profit organization are often tax deductible as well. Notes: Examples of non-profit organizations are charities, hospitals and schools. . The program has no annual membership fee and offers group purchasing power Purchasing Power 1. The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing power is important because, all else being equal, inflation decreases the amount of goods or services you'd be able to purchase. 2. for food, furnishings furnishings the extra type or quantity of hair on the head, tail, ears or legs, specified for a particular breed. For example, the feathers in setters, the beard in Bearded collies, the eyebrows in Schnauzers. , personal care items, and supplies. The 7,000-member organization helps members experience significant savings by using mislabeled mis·la·bel tr.v. mis·la·beled also mis·la·belled, mis·la·bel·ing also mis·la·bel·ling, mis·la·bels also mis·la·bels To label inaccurately. Adj. 1. or excess food products bought through Pillsbury and Green Giant. [TABULAR tab·u·lar adj. 1. Having a plane surface; flat. 2. Organized as a table or list. 3. Calculated by means of a table. tabular resembling a table. DATA FOR FIGURE 2 OMITTED] Recreation Unlimited - National Challenge Center for People with Disabilities, near Columbus, Ohio Columbus is the capital and the largest city of the American state of Ohio. Named for explorer Christopher Columbus, the city was founded in 1812 at the confluence of the Scioto and Olentangy rivers, and assumed the functions of state capital in 1816. , joined the Metropolitan Education Council, an established regional program for public and private schools, colleges, universities, and technical centers. The annual membership fee for the council is $300. Guy DeVault, Recreation Unlimited's facility superintendent, said this membership fee quickly paid for itself with the purchase of light bulbs. Charlotte Wheeler, food services food services Hospital services A 24/7 department in a hospital that provides for the nutritional needs of inpatients–eg, those needing special diets, preparing meals and transporting them to the floor and, through the cafeteria, the hospital staff and manager, said the minimum order request was very manageable and easy to comply with. Quality was not sacrificed. In addition, Recreation Unlimited has access to maintenance equipment and supplies, paint, office supplies, recreational and sporting goods, medical supplies, and related operational equipment. How to get involved with group purchasing Establishing a program is a long and difficult process. It is a good idea to contact established professionals who conduct large volume purchasing. To latch onto an existing group purchasing program, you may consider contacting the materials management Materials management is the branch of logistics that deals with the tangible components of a supply chain. Specifically, this covers the acquisition of spare parts and replacements, quality control of purchasing and ordering such parts, and the standards involved in ordering, or purchasing director at schools, hospitals, nursing homes, or government offices. These people can inform you about programs, requirements for membership, and entry fee information. In addition, they can profile how long the current contract pricing is locked in, minimum purchase requirements, rebates, and related information (see Figure 1). Jeffrey Brasie is the chief executive officer of Recreation Unlimited - National Challenge Center for People with Disabilities in Ashley (Columbus), Ohio. |
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