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The Reset Button

When supply chain issues hit your FF&E budget, maybe it’s time for a change

The Reset Button

We’ve all had to do it—when a device isn’t working correctly, we have had to push the reset button. It normally happens at the worst possible time.

You try to connect to your network to get something done, and your computer freezes. You must join a video conference, and your camera stops working. You are on a call, and the signal drops. Finally, you ask for help from an expert, and you are told to reset your system in order to restore it to the way that worked previously.

Consider this article an expert telling you to push the reset button on how you manage your project purchasing. Over the course of the global lockdown, project teams had to go to extraordinary efforts and find new ways of overcoming the challenges of a global supply chain rocked by inconsistent production, labor shortages and shipping delays.

As the industry moves past those challenges and the supply chain normalizes, it is good for casino developers and project managers to consider the lessons learned over the past two years and incorporate them into their project delivery plan in order to reset their projects to a better way forward. Three lessons from the last two years can help owners move ahead:

First, project teams should start working together earlier. By bringing together the various disciplines on a project early, owners can leverage that expertise for a better outcome. There are concerns and market-specific conditions that a contractor and purchasing agent have that an architect and interior designer may not, and vice versa. Identifying those concerns early gives more time to plan and develop a strategy to overcome those challenges.

Project teams can also use a tool, like we do at PMI, called FF&E Conceptual Budgeting to develop a sourcing strategy for their project. This helps owners mitigate their delivery risk while pointing the design team to vendors that fit the owner’s desired sourcing strategy. If the expectations are clear at the beginning, the talented designers in the gaming industry can deliver great casino design while being mindful of where the product is produced.

Assembling a project team early also helps focus on the project timeline correctly. As the owner, architect and interior designer work through the design process, the contractor and purchasing agent continually give insight into production lead times. The planning phase of a project has always been important, but the team now needs to have more players earlier.

Second, a project purchasing timeline should be indexed to the current FF&E market. Over the last two years, changes to sources and lead times caught many owners by surprise. Formerly reliable suppliers struggled to meet deadlines or quality standards. Shipping took longer and cost more than ever before. Owners had developed timelines based on a rule of thumb that no longer applied and then tried to expedite their own projects without well-defined standards for expediting.

It was as if owners were trying to change a flat tire while the truck was driving down the road. That combination of a faulty understanding of the realities of the current marketplace and poor expediting delayed their projects.

Owners should rely on project purchasing experts to build their purchasing timelines and expedite their projects. Qualified third-party purchasing companies with gaming experience can provide information early in a project to help owners and contractors develop their purchasing timeline. At PMI, we collaborate with the contractor to understand the construction critical path and then utilize our in-house expediting department to keep on that path.

Project expediting of FF&E is a unique skill that many owners do not do properly; the best purchasing companies have separate expediting departments that focus on nothing but expediting the production and delivery of product for their projects.

Third, expertise in FF&E and OS&E purchasing for casino projects is important, and that expertise was lost at many companies because of the “Great Resignation.” The loss of that project experience across the industry has impacted the ability of many companies to complete projects properly.

Many of the lessons learned by leaders in the gaming industry are not being passed down to the next generation of project professionals because those people who were at the cusp of ascending to leadership positions left the industry. The reductions of staff and a desire to maintain close control of all expenditures during the economic downturn led many owners to pull purchasing in-house. Some owners used property-level staff, often without purchasing experience, to complete projects. In the end, this ended up costing more time and money and frustrated project teams.

As the current market for casino development and renovation activity grows, casino owners should recognize that third-party purchasing companies that specialize in gaming projects are the best source for the industry’s institutional knowledge. The scope, size and speed of casino projects can easily overwhelm in-house departments or purchasing firms that are trying to learn the gaming industry. Finding the right purchasing company with gaming experience can help an owner reset their project plan and deliver their project in the new post-lockdown environment.

Just like resetting a computer has specific steps, resetting a project expectation starts with some specific steps:

  • Assemble a complete project team early. This means different types of members than in the past.
  • Create a timeline based on expert knowledge and use professional project expediting.
  • Leverage the institutional knowledge of purchasing firms that specialize in gaming.

Pushing the reset button is often the best way to get something right. Casino owners and developers should push that button now.

Carl Long is senior vice president and partner at Purchasing Management International, the leading FF&E and OS&E purchasing company in the industry.

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