by PJ Hoffman
Equipment is tough! Where to buy it, how to buy it, how to order it. . . yikes! We want to walk through the different kinds of procurement models so you have a better grip on the equipment beast.
What is Equipment Procurement?
Equipment procurement is the process of:
· Developing specifications for the equipment in your store development project
· Identifying viable sources of the equipment
· Soliciting quotes
· Evaluating quotes and selecting vendors
· Creating an equipment ordering/receiving schedule
· Communicating with the Design/Construction team about the specs of the equipment to be purchased and coordinating with them when the items should arrive
· Sending in purchase orders with dates of when items are needed
· Receiving and tracking acknowledgments and other notifications from vendors
· Receiving the equipment and dealing with missing or wrong items and damage
What are the Store’s costs in Equipment Procurement?
· Cost of the equipment
· Staff time it takes to do the procurement
· Mistakes or misjudgments in equipment specifications, which can cost during installation or in the life time of the units
Three Procurement Models
Before you start the procurement process for your project, think carefully about how you’ll approach it. And decide on your process before you begin.
There are three basic models for equipment procurement:
o The store researches manufacturers/sources/models and solicits a large number of quotes.
o Orders are placed directly with the manufacturer or a wide variety of dealers/resellers. The equipment may include used/reconditioned equipment.
o PROS: If the store has the knowledge and experience with equipment procurement, this can result in the lowest purchase price.
o CONS: Administrative costs and mistakes can easily overcome any price advantage.
WORK WITH DEALERS
o The store identifies viable store equipment dealers, usually local, who represent certain classes of equipment, such as refrigeration or foodservice equipment.
o The dealers work with the store on the specifications and quote the equipment.
o PROS: Local, often resulting in good in-person attention and follow up to issues.
o CONS: Prices typically higher. Significant administrative costs, but not nearly the amount in the Hands On model. Dealers may not present the variety of options.
EQUIPMENT PROCUREMENT SERVICE
o The store works with a procurement service for most of its equipment. Typically a grocery wholesaler offers this type of “equipment bill-through” program. This includes UNFI for the natural foods industry.
o The procurement service, in consultation with store, creates the equipment specifications and approaches vendors for pricing. Presents options to store for decision-making. Monitors the progress of the order and assists with problem-solving.
o PROS: Store’s administrative costs are very low and the process less stressful. Pricing is typically competitive if not advantageous.
o CONS: It is a remote service, although the procurement company may visit to go over the equipment options and details.
At seven roots, we work with Trimark as much as possible - our national buying program with them saves stores time and money!
Hopefully this helps you and if you need more information, try this document!