NEWH - May 2003 - (Page 45)

purchasing on a dime... by: William Langmade, Purchasing Management International Casino to P (Purchasing Agent): “I need 7,000 yards of custom carpet in 4 weeks . . . . get it here. .A. P to Casino: .A. Not a problem, sir. P to Vendor: .A. Need 7,000 yards of carpet in 4 weeks. Vendor to P .A.: Are you nuts? P to Vendor: .A. No . . . how much and can you do it? Vendor: (Cash register goes off in his head) “Kaching!” Vendor to P .A.: Not a problem, sir. SO GOES THE TYPICAL WAY casinos operate when they are opening or renovating. The major difference between FF&E purchasing for a casino and a non-gaming hotel is speed. Every day a portion of a casino is down or a room is out of service equates to significant lost gaming revenue. Casino hotels under construction will run two or three construction crew shifts. If they can open 10, 20 or 30 days ahead of schedule, it can mean millions of dollars to the bottom line. For the designer and FF&E purchaser, it can be frustrating because the construction cycle is usually way ahead of the design development and purchasing process. We call it Build / Design, not Design / Build. Typically a purchasing agent must be ready to receive specifications later than normal and complete the buyout in half the normal time, all while staying within the budget. The purchasing agent must have a large enough staff and efficient reporting systems to keep up. The purchasing agent must also use a tracking system that can keep up with the accelerated schedule. And by the way, there are no excuses when dealing with the casino executives who stand to make millions if the project is ahead of schedule or lose it if the project opens late. Another unique aspect of casino purchasing is licensing. There are many government casino control jurisdictions that require a non-gaming or gaming license from the purchasing agent. This means they will require your life history and records dating back to where and when you were born, fingerprints and records on all your key employees. Most all casinos themselves do background checks on purchasing agents. Purchasing agents must also know each jurisdiction’s rules regarding vendor licensing. Generally, once a vendor hits a certain dollar volume, they too must go through the licensing process or the purchasing agent will be prohibited from paying that vendor or doing business with them. Be ready for mountains of paperwork to complete these licensing procedures as well as significant licensing fees. The purchasing agent must also pay particular attention to quality and durability without sacrificing the design intent. Since most casino hotels are running full all the time, the wear on the furnishings is at least double or triple that in a normal hotel. Any product that is not bullet proof will fail within the first year, and the purchasing agent will be getting an irate call from the facilities people to fix it. Again, any down time will cost the hotel casino significant gaming revenue. Lastly, one of the most unique aspects of gaming purchasing is competition. The biggest competition for purchasing FF&E for a casino is usually with the in-house purchasing staff of the casino. The introduction of an outsource purchasing agent is fairly new in the gaming community, within the last 10+ years. A purchasing agent must prove to the project manager they have the purchasing, expediting and payables systems to keep up as well as the personnel solely dedicated to the FF&E buyout. Meanwhile, the in-house staff usually has other responsibilities like purchasing commodities and other capital replacement that can slow them down. It is very hard to break into gaming purchasing on a steady basis, but since the gaming business is expanding far beyond Las Vegas and Atlantic City marketplaces, it is opening new markets for purchasing agents. So, before you jump in, make sure you have the systems, technical knowledge, adequate personnel, licensing and, above all, a cast iron stomach to be successful in this unique arena. For more information, please visit www.pmiconnect.com 45 http://www.pmiconnect.com

Table of Contents for the Digital Edition of NEWH - May 2003

NEWH - May 2003
Contents
Letter From the Editor
Hospitality News
Spotlight on NEWH
Tips on Specs....Chandeliers
On the Road Again
Did You Know?
Ancient Storytelling Comes to Life
Indian Gaming: Developing the Latest Gaming Trend
You Can’t Sue an Indian Tribe, Can You?
Putting the Pieces Together: The Steps It Takes to Develop a Casino
Building the Fantasy
The Icing on the Cake: The Importance of Architectural Millwork in Casino Design
Designing Today’s Casino Resort: How to Make Entertainment Memorable and Distinctive
Casino Advertising: A Sure Bet!
Understanding Code Issues Related to Riverboat Casinos
Purchasing on a Dime
Under Wraps
Small Business Advice
Working With Team Players...
In My Opinion...
Taking the Gambling Out of Specifying Gaming Furniture
Industry Partner Education
Bios

NEWH - May 2003