Purchasing systems and inventory control. They are two magic terms in the casino world, two major factors in property-wide finance and operations assessment. Their best use signifies two likely means to a lucrative end.
Casinos weigh the options of in-house or outsourced cost monitoring, even a hybrid of their methods. Traditional practice features an army of specialists in one property. Yet a significant partner outside the casino can remove the layered, department-by-department approach to internal purchasing. That well-connected ally may be especially valuable for multiple properties.
The relevance has never been higher. Even moderate streamlining moves the needle for many properties in this $250 billion industry.
Observe the seismic shift. Food and beverage revenue alone hover near $15 million annually in many moderate-sized markets. Non-gaming revenues flirt with a two-thirds to one-third majority on the Las Vegas Strip.
While the automation and outsourcing realm unfolds, the personal touch remains important. What is a patron’s favorite dish? Customize the information, have it instantly available, regardless of when that person next dines. Favorite beverage? Get it on file. Popular recipes should be preserved, their ingredients monitored and re-stocked.
A glimpse of these trends reveals tips on how much product to carry, who consumes what and which vendors have the best deals.
Soup to Nuts
Carl Long, senior vice president of Dallas-based Purchasing Management International, has a clear view of where his company fits into this discussion.
“We are the purchasing system,” he laughs.
Long says that since its founding in 1995, PMI has globally sourced, purchased and installed over $2 billion in hotel, resort and casino furnishings, operating equipment, systems and construction materials worldwide. It is the leading procurement agent in the gaming industry, he adds.
PMI can outfit a casino with the whole package. The company must be a master of minutia, handling everything from carpet and pad to wall covering, specialty lighting, beds and frames, bedspreads, fabrics, drapery, case goods and upholstered furniture.
Did we mention chandeliers, artwork and frames, ironwork, mirrors, banquet and meeting room seating, office furniture, custom furniture and other furnishings normally used in a hospitality application? Operating supplies and equipment items including china, glass, silver, linen, pots and pans, mini-bars and guest-room amenities?
The scope of work entails conceptual budgeting, global sourcing, vendor negotiations, and warehouse and installation coordination. PMI services many casinos, including an ongoing expansion with Maryland Live.
Long pitches PMI as a one-stop shop.
“The owner can easily get out of control when you are talking about thousands and thousands of individual line items,” Long says. “We know project purchasing. People don’t really see this, but it is cheaper to outsource purchasing than to maintain that expertise in house, because the expertise is expensive.
“Purchasing systems demand control and execution. We provide the execution, knowledge of the vendor, knowledge of the product—and we can connect the ownership stakeholders, contractors, designers and vendors.”
PMI utilizes the buying power of a vast vendor network, Long says. It can purchase in volume and leverage longstanding relationships. The company also connects dots faster than an internal operation, he says.
“Our buying power is more than just dollars,” Long asserts. “It is dollar volume, project volume, vendor knowledge and project management expertise. A lot of casino and hotel companies don’t have the luxury of meeting hundreds of vendors. They work on their own project, but they can’t evaluate thousands of different product options. We can. We will help an operator budget correctly, plan correctly, make sure the project is scoped well and convey who is responsible for what.”
Long observes both short- and long-term market trends. In the near run, a bullish economic sentiment will produce a secondary market this year. “There’s going to be a large push on updating lagging projects or a lagging product,” he predicts. “The dog that hasn’t been fed in a while, the casino that looks tired and worn down. I think there’s going to be a push in getting that up to date while the whole market is growing.”
Long eyes the potential ripple effect of Revel coming back online in Atlantic City, and whether that coaxes competitors like Borgata to re-invest in the market. On a larger scale, he views flexibility as a paramount customer concern.
“We’re seeing more of a desire for properties to have convertible spaces,” he says. “If you are talking food and beverage venues, if they are not booked for a fight or a concert, they still keep the juice going by shrinking the spaces so they don’t have vast empty caverns. Architects and designers are creative in the way they use the walls, seating arrangements, multiple partitions and other methods allowing for the sense of an activated space.”
Long says the industry addresses social media in terms of design. Millenials have become perennials, blooming with a different new focus each year. They remain prominent in casino design and purchasing.
“You’ve got this idea of an Instagram moment that when a guest comes, somebody is there, they have this spot (a lounge perhaps), and in the room you are seeing a less traditional lineup,” he says. “Now, instead of a desk chair and desk, you might have a chaise lounge and and ottoman that rolls, so that you can work on your tablet.
“I was in a model unit of a property, and in that room I counted 16 different places you could plug a device in. You think of the phone, computer, maybe a tablet, Bluetooth charger, possibly two people using the room (not to mention hair dryers and electric shaver outlets), and there you have a large number of outlets.”
PMI’s value may intensify when large corporations use their buying leverage to obtain discounts across several properties.
Food for Thought
A global reach with local connections.
That’s the gaming profile for Houston-based Sysco Corporation, a longtime food-product powerhouse and increasingly prominent casino partner. Sysco’s participation in the Global Gaming Expo and emerging leadership role at industry conferences underscore its rising symmetry with resorts, casinos and the restaurants they unveil to the public.
Founded in 1970, Sysco grew to become the global leader in selling, marketing and distributing food products to restaurants, health care and educational facilities, lodging establishments and casinos.
Sysco operates approximately 300 distribution facilities worldwide. It serves more than 500,000 customers in several countries, including the U.S., Canada, Mexico, France and the U.K. For fiscal 2017, the company generated sales of more than $55 billion.
That gives casinos a strong purchasing ally.
Company officials say Sysco offers a worldwide reach to leverage its buying power, access to vendors and the ability to tailor products for individual properties. Its options provide a holistic offering through broadline distribution companies, specialty produce, hotel guest-room amenities programs, equipment and supplies, custom-cut meat operations, specialty imported products and customer-facing technology solutions.
Sysco cites restaurants as key drivers in the gaming space. Because many of its associates have backgrounds in restaurants and other food-service settings, Sysco officials say they understand the challenge of managing a kitchen, retaining staff and handling the books. This helps casinos, which compete with local restaurants in the bid to draw new revenue.
A recent product rollout reflects Sysco’s ongoing gaming focus. Cutting Edge Solutions, derived from leading suppliers, provide unique experiences to the gaming customer, officials say. The development process involved distinct, relative concepts, from plant-based and sustainably raised proteins to natural ingredients in everyday favorites, free from artificial additives.
It resulted in a late-2017 fleet of new products. They include Sysco Imperial Fruit & Vegetable Juice Concentrates, Imperial Clean Cheesecakes, Fire River Farms Grass Fed Beef Patties, Beyond Meat and Beyond Burger, Coleman Organic Chicken, Ecolab, Duraloc and Premier Gold Natural Wild Caught Gulf Shrimp.
A customer-centric approach ensures the development of programs tailored to the gaming industry, Sysco maintains. Either by vendor consolidation, venue standardization or SKU consolidation, significant savings in time and money can be realized.
Sysco also boasts a strong community aspect. Officials say it introduced a new giving strategy to direct 75 percent of community donations and volunteerism toward hunger relief initiatives. In the gaming community, Sysco’s leadership supports both local and national charities, along with organizations like the Epicurean Charitable Foundation, Global Gaming Women, AGA, NIGA, the Las Vegas Business Academy, the Nevada Hotel & Lodging Association and the Nevada Restaurant Association.
A Nice Fit
Innovation reigns at Agilysys, a leading global provider of next-generation hospitality software solutions and services. The proliferation of non-gaming spend has vaulted the Alpharetta, Georgia-based company into a prominent casino-world position. Its hotel property and point-of-sale systems, along with software used in gaming-resort spas, golf courses, retail and food-service realms, have grown substantially.
The company continually spreads wings across the gaming industry. And now, it’s on to the small, important details. The company’s inventory management solutions are tailored to decrease food and labor costs while boosting efficiency. The targeted result is freeing up working capital, improving management and guest satisfaction, along with improved delivery times.
Eatec and Stratton Warren Systems are two of its recent catalysts. Eatec is a single-solution, advanced food management system that controls the quality and consistency of the operation. It integrates with many of the markets’ ancillary technologies. It can be used as a back-of-the-house system to streamline food and beverage ordering. The product can also manage multiple restaurant and food-service functions.
One of its major areas is the optimization of inventory. Eatec stores information by time, date, outlet, location and shelf. It can track spoilage and loss, leverage hand-held inventory terminals and print bar-code labels. An operator can quickly compare food costs to menu prices, gain insight on the cross-utilization of ingredients and compare theoretical and actual usages. It can also prioritize vendors.
Agilysys officials say it is used in universities, restaurants, hotels, resorts, stadiums, theme parks, supermarkets and, of course, casinos.
The Stratton Warren System sports its own brand of innovation. Agilysys recently unveiled upgrades to it. The SWS v9.2 includes key enhancements like one-click capability to receive all purchase orders that arrive fully complete, the ability to attach and retrieve supporting bid documentation and enhanced compliance capabilities.
Optional modules for SWS include bar-coding, menu and recipe analysis, retail and SWS Direct, a convenient and intuitive shopping cart experience. SWS can be deployed as either an on-premise or Software-as-a-Service (SaaS) solution.
Agilysys officials say that 25 global gaming organizations utilize SWS to streamline menu item purchasing and inventory. Although the product is a full-featured, made-for-hospitality inventory and procurement solution, it enhances the gaming footprint for Agilysys. The Casino Pauma in California signed on to it last year.
Casino Pauma, which boasts more than 35,000 square feet of gaming space, is open 24 hours a day and hosts thousands of guests each month. The property’s management team wanted a comprehensive inventory and procurement solution that would automate processes, reduce costs and boost efficiency. They also sought a subscription service model that would provide predictable IT costs, an accelerated return on investment and the latest software updates.
From varied angles, PMI, Sysco and Agilysys fit an industry niche. Providing buying leverage or enhanced internal assessment, they let operators decide how best to be lean and mean.