A Savings Strategy Synnott has witnessed the impressive possibili-
ties firsthand: at his club, the implementation of an organized purchasing system has produced annual savings of approximately $100,000. During these economically precarious times, when
clubs, by and large, are “struggling to make money,” spending less and saving more is critical, insists John Atwood, the founder and managing director of The Atwood Group, a Natick, Massachusetts- based consulting firm that special- izes in assisting independent clubs. However, while facilities “are more cost-conscious than ever, that awareness doesn’t always translate into strategy, planning, and review. “Experience tells us that clubs
can usually save, at minimum, 5% of their costs when they really hone in,” he points out. “This is well worth some added attention.” Synnott couldn’t agree more. The Weymouth Club, situated on
11 acres in Weymouth, Massachu- setts, has more than 60,000 square feet of floor space, plus 40,000 square feet under bubbles that accommodate an aquatics area and its tennis courts. Its total purchas- ing budget is on the order of $9.5 million per year. When Synnott first scrutinized
the club’s numbers carefully, he was surprised by what he found. “I discovered that we could be saving up to 30% on things we’d never thought of—things that you usually think of as standard, such as oil and electricity. But these things are negotiable. If you don’t think of them that way, you’re making a big mistake.” Another missed opportunity involved deliveries. “We might order 10 items of something, but only
Carol Marks
receive eight. Such discrepancies aren’t uncom- mon; it happens, on average, 10% of the time and, as a result, can eat up quite a few dollars.”
Expense solutions John Atwood
Unfortunately, none of this is unusual, observes Carol Marks, a certified purchasing manager, accredited purchasing practitioner, and vice president of business-management systems for the Industrial Distribution Group (IDG), in Belmont, North Carolina. “Companies often don’t pay close enough attention,” she says. “When they finally do, they invariably say, ‘Wow! I didn’t even realize.’ They discover that they’re spending far more than expected or are missing out on potential savings.” IDG assists by developing supply-
chain solutions. One of the first steps that Marks
suggests clubs should take is to obtain clarity about what they’re currently doing. “Conduct an assessment to determine how much you’re spending and what you’re spending it on,” she counsels. “Then, analyze the data and look for opportunities—items that you’re buying a lot of, contracts you might need to renegotiate.” While every business starts from a different baseline, it isn’t unheard of to achieve savings of anywhere from
10% to 20%, she attests. Now, Synnott, who has final sign-off on all
purchases, relies heavily on monthly analysis meetings, as well as spreadsheets detailing every product and service purchased. “Department managers outline the products needed, the vendors,
Weymouth Club achieves savings in its locker rooms
56 Club Business Internat ional | SEPTEMBER 2011 | www.
ihrsa.org
... And in its aquatics area
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