Why should you move forward in unbundling the purchasing responsibility from the Building Service Contractor (BSC)?
There are several factors at play when evaluating whether to bundle the consumable product purchasing into a service contract with a BSC.
The three factors that speak the loudest when making this evaluation are TRANSPARENCY, CONTROL AND COST SAVINGS.
Our distribution partners have resources to support this by establishing a program that allows for the BSC to continue to purchase the supplies via CBRE, but purchase them through our distribution partners’ account on the FM's behalf.
This 'unbundled' approach accounts for several outcomes listed below:
- Transparency:
- Site-level visibility - the unbundled program will allow for complete visibility into what is being purchased down to the individual property level. This level of visibility is best-practice as it enables product rationalisation and detailed spend analysis, whilst also ensuring that the BSC is purchasing in a responsible manner
- BSC case price - without transparency, CBRE will not be able to ascertain the BSC case price, that is often hidden
- Control:
- Site-level spend analysis - with products being ordered for a specific ship-to-address under the account, we will have the ability to produce property-specific spend reports. This control eliminates the possibility of the BSC ordering product to their warehouse and distributing product on their own to a non-managed location
- Commercial control - with CBRE having contractual oversight we are able to eliminate the back-side rebate BSC's often receive
- Shrinkage minimisation - is also achieved through proper inventory management
- Cost Savings - the CBRE unbundled program should afford the most competitive total cost solution:
- Leverage of CBRE’s global purchasing power. We have negotiated global programs with the major manufacturers that leverage our volumes
- Elimination of BSC mark-up / rebate – as a general rule of thumb, CBRE will conservatively save 5-10% on the cost of supplies by unbundling the purchasing responsibility from the BSC
- In a bundled contract, the purchasing of supplies is often a profit centre for the BSC. In this instance, the BSC assumes an additional layer of responsibility that leads to an inherent cost that they are able to hide by providing spend per sq. ft. or other “fixed” monthly consumable estimates
- If this bundled approach is eliminated, we can realise full visibility of cost from the manufacturer and cost from the distributor on a unit cost basis. We are able to assume full understanding of the mark-up structure in order to negotiate the best deal for supplies
MRO-013 Ver 1.1 (April 23)
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