Improved financial analysis/review
Having centralized records of all purchases allows the company to improve financial analysis and review of pricing practices and quoting. For example, Patio Pools & Spas has some customers that have their chemicals included in their service agreement and others in which the chemicals are billed out separately. By using centralized purchasing it allows the company to evaluate what the client is being charged versus the actual cost of the chemicals.
It also provides a much more accurate cost of goods sold, making the company better at quoting and bidding on jobs, which ultimately increases profits.
This systematic approach also prevents orders from falling through the cracks. For instance, if a service technician cannot finish a job because a particular part is needed, the job automatically generates a PO to the warehouse staff as the technician leaves the project site. This immediacy of communication expedites the ability to complete the job the following day or, in some cases, the same day. There is no time delay. The work order has a list of parts, the office invoices, parts are delivered, and a minimum/maximum is triggered to replenish the stock.
Patio Pools & Spas has even created a ‘special order’ category for the company’s large number of ‘do-it-yourself’ customers. By creating this category, it gives them an easy way to help them find what they need to keep their pools and hot tubs running smoothly. This has allowed Patio Pools & Spas to gain the reputation of a company that is easy to do business with. All of these benefits contribute to being more profitable.
Teamwork
Another benefit Patio Pools & Spas has come to realize since using centralized purchasing is improved teamwork. Employing business software that allows for transparency has helped the company’s staff become more team-oriented by improving inter-company relations. For example, if a product is on the shelf, but has a tag on it saying ‘Reserved for Smith job,’ a service technician can contact the construction department and find out when they need the part or product. This way, a retailer or service technician is not taking a product that might hold up a job or the construction crew is not holding a product they do not need for another few weeks. The team works to make everyone’s job easier and, ultimately, the customer happier. In the past, there was no system that could tag an item in this manner.
New business development
Once centralized purchasing is integrated into the company’s business software, many firms are able to develop new business opportunities with the additional time gained by being efficient purchasers. This happened to Patio Pools & Spas, when they realized there was an opportunity to act as a wholesaler to smaller pool professionals. This can be a great opportunity for some companies with respect to providing high quality service to fellow industry colleagues. Patio Pools & Spas is delighted to support other service professionals because in the big-scope of things they realize the industry needs to work together to ensure consumers remain happy with their pool and hot tub purchases. The consumer should never say pools and hot tubs are: “too much work,” “too costly,” or “not worth it.”
“If we work together to keep consumers happy with pools that are clean and fully functional, it supports the long-term health of the industry,” says Ragel.
All pool businesses should take advantage of how technology can make centralized purchasing an easy reality to build directly into their business operations.
Jessica Chase is the vice-president of client services at Evosus Inc., in Vancouver, Wash., a developer of business management software designed specifically for the pool and spa industry. She has been with the company for more than eight years and previously held the position of support manager. Chase has a bachelor of science in social sciences from Portland State University. She can be reached via e-mail at jchase@evosus.com.
